Democrats Sounded the Warning

But No One Was Listening


How many times do we have to learn this lesson? We had the crash of the stock market, leading to the Great Depression, which came about because of the free-for-all on Wall Street. We had the S&L crisis, costing us $ trillions, which we and our grandchildren will be paying for, thanks to the Bush boys--poster boys of S&L fraud. Yet the Republicans are all pounding their fists in outrage and righteous indignation over the Enron debacle. Asking, what can we learn from this?

The Enron scandal and the politics of the GOP to kill any legislation that would have prevented it, is a clear testimony to the character of George Bush, his party, and their politics and beliefs.


1. In 1997, Senator Barbara Boxer (D-CA) proposed a bill restricting 401(k) retirement accounts that would have prevented or at least mitigated the disaster that hit Enron's innocent holders. But that would have been regulation; so free-marketeers and business lobbyists watered down the bill rendering it almost useless.

2. In the late 1990s, then-SEC Chairman Arthur Levitt, Jr., under Clinton, tried to banish the cozy connections between auditors and the companies they audited. But that would have been regulation; so the accounting lobby defeated Levitt's efforts. And the current President Bush did the lobbyists one better: He appointed the leader of the anti-Levitt effort, Andersen lawyer Harvey Pitt, as Levitt's successor at the SEC.

3. President Clinton's treasury secretary, Lawrence Summers, tried to put a stop to money- laundering and the labyrinth of offshore hideouts where Enron placed about one-third of its assets in order to conceal its losses. But that would have been regulation; so congressional Republicans beat him back. Current Treasury Secretary O'Neill has obstructed even modest efforts by intergovernmental agencies to monitor the tax-shelter scams.

4. In 1997, Clinton administration officials proposed more-exacting disclosure of energy derivatives--the obscure financial arrangements that were so new that they escaped regulation completely. But again, that would have been regulation; and so Enron, with the help of congressional Republicans led by House Financial Services Committee Chairman Jim Leach of Iowa, put a stop to the reformist nonsense.

Of course the GOP is back-peddling as usual on all of these issues, now that thousands of people have lost their life savings. The Democrats were right about Civil Rights, right about Voting Rights, Medicare, the forty-hour work week, child labor laws, and they were right about Enron all along.


Further Reading:
Enron dwarfs the momentous insider infamies of the Gilded Age and the Jazz Age. But it is also special for other historical reasons. It signals a crisis in modern conservative thinking and politics -- a crisis that has less to do with bad character than it does with scandalously bad federal policy. Enron is the belated culmination of the age of Ronald Reagan, George Bush the elder, and Newt Gingrich. It stands as a monument to the era of deregulation and laissez-faire business politics that has endured for more than 20 years.
A Scandal of Our Time