06/26/2002 Archived Entry: "NASDAQ: The second shoe drops; Democratic tactics; Dean should speak to these issues"

After Enron and Global Crossing, comes WorldCom/MCI. WCOM, during the 1990's techboom, was the darling of the communications industry, and probably I would rank it just behind MSFT, INTL, and CSCO in terms of the top-dogs on the NASDAQ. Look at the crap now, 84 cents.

This is the type of "external event" that I noted before that could lead an oversold mk't condition over the cliff. WorldCom Says It Hid Expenses, Inflating Cash Flow $3.8 Billion. This is a scam, pure and simple, and the DOJ about to lay down the hammer on their head is probably the only reason why they have come forward. WorldCom's auditor had been Arthur Andersen, uh-huh. The S.E.C. said in a statement released early today that the disclosures confirmed "accounting improprieties of unprecedented magnitude." Considering Enron, that's quite an accomplishment. I wonder if we will hear much from the politicians on this one. With Enron, it led them to having to give back contributions they've solicited, and no doubt, given the Telecommunications Act, WCOM has had plenty of bought-and-paid-fors there in DC, contributing over $1M to the Republican Party, as the washingtonpost.com article on the story notes:

WorldCom has deep roots in Washington. In 1998 it bought MCI Communications Corp., the Washington company that had challenged, and eventually broken, the AT&T long-distance monopoly, revolutionizing telephone service in the United States. Another acquisition was UUnet Technologies Inc., the Ashburn company that controlled a large portion of the Internet's backbone.

In The Politics of Greed, Dean goes to NY to meet with Clinton:

Gov. Howard Dean of Vermont had his recently, at Bill Clinton’s spacious offices on 125th Street. Dean told him that the voters seemed increasingly alarmed about their shrinking 401(k)s, deeply suspicious of drug companies and furious at the Enronian CEOs and inside traders they see on TV. Dean, a Yale-educated son of a stockbroker, wanted advice on how to honor such economic emotions “without sounding like a populist nut.”

By Clinton's response, we can see he too is stuck in the 90's paradigm. Gov Dean should go with his instinct here. He's the one down on the ground in Iowa and NH.

The Republicans are just going to get hammered for advocating partial privatization of SS. They respond by promising that no elderly citizen should be fearful, as they will get their checks on time for the duration of their life. I bet that really makes the baby-boomers comfortable, as it's more or less stating that they are the ones that are going to get hammered by the Republican's plans for privatization. Bush pretty much wedded the GOP to the soaring stock prices with his pitch for private investing accounts. It's easy enough to link the corporate greed with the GOP's plan of SS privatization. Alongside Bush's deficit-spending, a sluggish economy, and the declining stock market, the middle class will respond to Democratic calls for corporate responsibility. Not standing alone, but alongside calls for the gov't to be fiscally responsibile.

When a bushspeak like Fineman is praising Clinton, Dean would be wise not to listen, and cut the GOP no slack. Besides, Bush, as Fineman notes, is already playing the Clintonian-role. The voters are going to demand authenticity from Dean.

Replies: 3 comments

I am very happy that GW is the President now...and not Al Gore. Had Al Gore been the President, the GOP would have linked everything to the Clinton-Gore "mess" and would have resulted in the decimation of the Democratic Party. Now, one can only hope that on November 5 we see the reverse. The Bush Administration has no economic policy other than giving top economic jobs to its incompetent friends...Mitch "the moron" Daniels, Paul "the Senile" O'Neill and Lawrence "the Laughing Stock" Lindsey...there are well groomed conservative economists and these include Anne "the Sharp" Krueger, Robert Barro and Gary Becker...but they are not personal friends of the Bushes like the O'Neills and Lindseys. Obviously the Bush Administration cares more about its personal friends than about the American people. Otherwise these guys would have been long gone. Bush does not have an economic policy because his economic advisors do not know anything about economics, O'Neill included.

Posted by G.C. Raj @ 06/26/2002 06:39 AM PST

I agree. Though if Al Gore were President, we would not already be deficit-spending. The GOP in congress would have held his feet to the fire. They do no such thing with the big-spending Bush. In the long run, I think the election "2000 victor" will wind up being the loser.

Posted by myDD @ 06/26/2002 06:42 AM PST

It may be high noon for the Congressional GOP...now two polls are showing the Dems ahead by eight to nine points. But, still early in the game with four months to go. However, if the Dow is around this mark come October, the GOP would be toast...I really do not think that folks who lost their shirt in the recent corporated scandals would vote for the GOP...unless they are plain stupid. It is time for a change at least at the congressional level.

http://www.pollingreport.com/

Posted by G.C. Raj @ 06/26/2002 08:35 AM PST