Arrests, legislation help bolster economy
Friday, July 26, 2002
Wednesday's 489-point rebound in the Dow Jones Industrial Average was welcome news indeed, coming on the heels of several consecutive days of sharp losses in the stock market. Until the midweek market upturn, investor confidence hadn't been so low since the markets reopened after the Sept. 11 terrorist attacks.
While the stock-market gain was a relief, it also was shaky. Trading Thursday seesawed throughout the day. But there were signs that at least some of the confidence Americans have in the stock market and in the U.S. economy in general was being bolstered.
First came the news Wednesday that top officials of Adelphia Communications were arrested and charged with looting the bankrupt cable-TV company and using it as their "personal piggy bank." This move was attributed, at least in part, with helping the stock market's resurgence.
On Thursday, the U.S. House overwhelmingly passed compromise legislation to crack down on corporate fraud. The 423-3 vote moved the legislation closer to being signed into law by President Bush, who has indicated he will approve it.
The sweeping changes create stiff criminal penalties for corporate fraud and document shredding. In a further sign of congressional urgency, U.S. Senate majority leader Tom Daschle said the measure would likely be on the Senate floor today.
In spite of these positive moves, there are grumblings that the Bush administration --Treasury Secretary Paul O'Neill in particular -- isn't doing enough to show Americans that the White House is serious about ending the economic malaise.
But careful attention to what the president and others in his administration have been saying in this regard shows he has taken a rather hard line on the accountability of corporate America.
Perhaps it is a post-Sept. 11 reality that Americans expect more rallying action than words when it comes to a crisis. When terrorists struck, the response was to declare war on terrorism. When economic calamity struck -- at least temporarily in the minds of the thousands of workers who have been opening their 401(k) quarterly statements -- there was no executive order to send out teams of FBI agents to round up those corporate executives who have found ways to line their pockets while their mismanagement and outright corruption help destroy our confidence.
Meanwhile, there are signs that the U.S. economy is strong. The fact that the stock market isn't in sync with other economic indicators is further evidence that swift action must be taken. Congress and the White House appear to be on a fast track to deliver a stern message to corporate crooks: get ready to trade your pinstripes for prison stripes.