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The Fraud Reform Follies
Let's see. Who might we nominate for the greatest public display of mental acuity in Washington
this week? Perhaps it is John Magaw, the fired head of the Transportation Security Administration (TSA). He accepted
a job that mandated electronic baggage scanning devices in all TSA-supervised airports by December 31, 2002. The
date was false from the beginning and Congress knew so at the time. In recent congressional testimony, TSA officials
indicated that instead of the end of 2002, it would more likely be the end of 2005. And, by the way, the costs
of a government-run program would easily be four times that of the private sector.
Perhaps it is Congressman James Traficant (D-OH) who danced into the hearings of the House Committee on Standards
and Official Conduct to say that he should not be expelled from Congress even though he has a federal felony conviction
and is facing seven or so years in prison for bribery, tax evasion and racketeering. He danced out again having
been found guilty on nine of ten counts. The issue before the panel now is should they just be quiet until Traficant's
term is up in January or give him a forum in front of the full House by bringing him to trial for expulsion. He
has already warned them how a full hearing will go. "When I go to the floor for the final execution, "he
said, "I'll wear a denim outfit and go out like Willie Nelson. I'll be a combination of John Wayne, Will Smith,
the Men in Black and James Brown. Maybe I'll do a Michael Jackson moonwalk."
Our third nominee could be Zacarias Moussaoui, who, like Traficant, is acting as his own attorney. Having been
denied the plea of no contest last time, Moussaoui asked to plead guilty this time. U.S. District Judge Leonie
Brinkema entered a plea of not guilty on his behalf and gave him a week to think it over. Following a recent Supreme
Court ruling, the acceptance of a carefully-negotiated guilty plea would remove the death penalty as a possibility
in exchange for providing complete and accurate intelligence information.
Proving that he may not be as crazy as he seems, Moussaoui stated "I want to plead guilty today because I
want to save my life."
But the winner is … House Minority Leader Richard Gephardt (D-MO). In a private session with top Democrats, Roll
Call reports that Gephardt asserted that his party could pick up as many as 40 House seats because the issue of
corporate accountability has finally turned momentum their way. Because incumbency is the rule of the day, there
are no more than 40 seats in play at all. The other 90 percent are guaranteed by the gerrymandered districts of
both parties. So the Minority Leader is implying that Dems can win them all.
Win them all, Gephardt says, if the stock market continues to drop. He continues, if the market decline brings
on a double-dip recession due to a lack of consumer confidence. If, he hopes, another big business scandal but
not a war or terrorist attack arrives in September and if advertising and PR can keep the media focused on sowing
anxiety among investors. We are in, he concludes, if we can just keep the bad times rolling.
President Bush and the Republicans are not in danger of being burned alive by a flying dragon. They are in danger
of being pecked to death by small birds. "The United States needs an obvious victory," says Stratfor's
Global Economic Update, "…either political or military - before the steady economic growth that is already
occurring actually registers with the public as real."
By the anniversary of September 11th, some positive evidence of our resilience needs to be in place. The small
birds of lingering doubt appear to be latching onto every crumb of bad news and amplifying it way out of proportion.
The apathy of inaction colors the war effort. The Republicans are now in charge of the government and its manifest
collective foolishness is now their responsibility. While the Democrat's fate rests on private sector economic
decline and corporate failure, the Republican's fate rests on successful action by government - the equivalent
of finding Osama.
Rational behavior eventually conquers even politicians and pundits. Damaging fear and panic are almost always short-lived
unless grounded in fact. The underlying economy is on a very sound footing. Inflation is flat to non-existent.
Consumer spending on homes and cars marches on at a goodly pace. Fed Chair Greenspan has promised to keep interest
rates at their 40-year low. In point of fact, despite 9/11 the United States did not technically suffer a recession.
In the quarter after the twin towers attack, GDP grew at a rate of 1.7 percent. That rate, suggests Stratfor, tops
a lot of Europe and Japan.
Second quarter earnings reports begin now. Americans seems to continue to spend freely, corporate profits (honestly
reported) are improving and exports are booming as the dollar decline makes U.S. products cheaper. What the public
is looking for right now, the Wall Street Journal says, is a President who will stand against the panic.
Just as he stood in the wreckage of ground zero and used a bullhorn to establish himself in the hearts of the people,
President Bush needs to prove himself in the crucible of domestic capitalist/socialist political theater. He can
resist the wholesale federal regulation of corporate decision-making. He can resist the attempts by the trial lawyers
to criminalize poor judgment through the Leahy amendment. And he can fight off the attempts from the Left to go
well beyond corporate accountability to change the basic rules of the capitalist game. A vigorous and vital free
market is self-correcting and superfluous laws and regulations are not better or faster market enforcement mechanisms
than falling stock prices for a scandal-ridden company or rising Board insurance rates.
As Chairman Greenspan said this week, corporate behavior going forward has already been scrubbed clean, or will
be by August 14th. (That's when the personally signed CEO statements of the top 1000 public corporations are due.)
But the markets won't again reflect underlying growth until the government stops helping and real profits appear.
Bush needs a market rally. Gephardt needs a double dip recession.
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