Better Lucky Than Good
Comment by Mark Lacter
Another summit. Sigh.
President Bush’s answer to our persistent economic woes is to assemble a few hundred carefully selected guests, make them feel important as they hash out the same old policy muck, and finish the day extolling the supposed virtues of a pretty unhealthy economy. Explaining that the feel-good Waco gathering was a chance for him to “get a report from what I call the front lines of the American economy,” the president noted that, “We’ve got the hardest working people in the world. We’ve got the best tax policy in the world. I mean, we got a lot going for us.”
Perhaps he really believes that such a blatantly orchestrated event, so cynical in its conception and timing, will resonate beyond the halls of Baylor University. Perhaps L.A. Mayor James Hahn and California Gov. Gray Davis felt the same way when they hosted their own quickly forgotten economic summits last year.
These gatherings are dog-and-pony politics in the extreme guaranteed to attract credulous coverage from local media and almost certain to have zero impact on the shape of economic policy. When an elected official puts on one of these shows, it means he’s either new to the job or in some political trouble that requires glad-handing.
Fact is, chief executives are relatively powerless when it comes to short-term economic woes. There’s no presidential proclamation that will make it all better. Nor will legislation. Even the Federal Reserve Board, heretofore considered an economic elixir, has been unable to fire up capital spending and with it, corporate growth.
None of which is necessarily a bad thing, mind you. More often than not, bad economies are like the flu: they just have to run their course.
But for politicians, this is not acceptable treatment. There are elections to win, after all, and that requires shameless promises to make things better whether or not they’re in a position to do so. This is why Bush’s recent performances at Waco and elsewhere are so irksome. He’s pulling a page from Bill Clinton: When in doubt, deny, deny, deny. In this case, it’s that the economy is jake, a claim that not only strains credibility but is an insult to the millions of Americans who are either out of work or watching their wages stagnate.
He’s taken a similar stance on corporate governance. Rather than engage some fundamental concerns about the rights of shareholders and the inherent conflicts within Wall Street, his first instinct was to play Texas Ranger promising to weed out them bad fellers by supporting quick-draw legislation from the Democratic-controlled Senate that he earlier had opposed.
The ultimate feel-good gesture is the Securities and Exchange Commission having chief executives of major corporations certify in writing that their company’s financial results were kosher. As if on reflex, the stock market perked up last week when the Aug. 14 deadline came and went with only a few corporate miscreants in evidence. So now we know that most CEOs are not crooks. Fine, but what next? What does such reassurance do for stockholders of Home Depot, who have seen their shares fall year-to-date by 44 percent?
But give credit where credit is due Bush’s popularity, while down from the post 9/11 heights, remains in the mid-60 percent range. He keeps saying there’s nothing wrong and enough people still believe him. Heck, it’s worked for his entire political career, so why stop now?
Mark Lacter is editor of the Business Journal. He can be reached at
mlacter@labusiness journal.com.
