(Host) Commentator Madeleine Kunin reacts to George Bush s statement on corporate responsibility.
(Kunin) George Bush spoke, but Wall Street didn’t listen. As we speak the market remains jittery. Why did it not surge upwards like soda in a straw? Could it be that the old adage, “Do as I say, not as I do,” applies here?
The man has no credibility on the subject he is lecturing about. His own dealings as a director of Harken Energy of Texas remain under a cloud. How come he sold his stock shortly before the stock plummeted and filed the required papers nine months late? As for Vice President Cheney, the SEC is now investigating his practices as CEO of Haliburton.
A day after the president’s speech, the Senate endorsed a series of tough measures by unanimous votes. The sudden conversion to taking tough measures instead of a slap on the wrist is an indication of how serious the situation is, and that both parties recognize that their political future rests on how vigilant they are on corporate reform. Senator Patrick Leahy proposed an amendment which includes a ten year felony for executives who defraud their investors. Senator John McCaine has a measure that would reduce the ability of CEO’s to make a quick buck at the expense of shareholders. No CEO would be allowed to sell his stock while he is on the job.
One reason there is a surge of proposals on both sides of the aisle is that the domino effect of corporate fraud is affecting middle class Americans. Fifty percent of the population is invested in Wall Street to some degree. Each day, retirement pensions, savings plans are shrinking. People are worried about their future and how and when they will be able to retire. Consumer confidence has eroded and has to be restored. This is where presidential leadership is critical.
Bush is good at the stern lecture, but in his heart he is lecturing to his buddies, the gang he grew up with, and he can’t believe that they should be severely punished. But it is precisely his corporate campaign contributors who he has to face, head on.
I still have faith in the system. When it works, it works well. But it cannot be policed by voluntary compliance. We must recognize that the profit motive can go berserk if left unchecked. We must make sure that the ordinary citizen is protected from abuse.
The only way to accomplish that now is for the president to attach tough action to his words by endorsing a strong Senate bill. The House passed a bill that looks like mush in comparison. Compromise will have to take place between the two houses, but if the president weighs in on the Senate side, the odds increase for a strong bill. Then we can take comfort in the fact that this president not only talks a good game, he knows how to play it.
This is Madeleine May Kunin.
Madeleine Kunin is a former governor of Vermont.