Bush's New York speech on corporate accountability was one of the weakest of his presidency. It was long on platitudes, short on structural reforms. The Dow Jones responded to his call for restored confidence in America's financial markets by plunging 189 points.
Ever since he took office, Bush's short run political strategy has been to blur differences with Democrats. He can get away with this, perhaps, on issues like prescription drug coverage, where the details are numbingly complex and few voters are paying attention. But America's corporate meltdown is real, and Bush is way behind the curve.
It's more than a little ironic that Bush's mandateless presidency was rescued by a foreign policy crisis that is now being upstaged by what could be the most serious economic threat since the Great Depression. For Bush's own rise to fame and fortune in Texas was a small-bore version of the Enron and WorldCom scandals.
There is no way that Bush can do a Nixon-to-China on this issue and get back ahead of the curve because Bush's closest cronies epitomize precisely the kind of capitalism that is imploding. While his father was President of the United States, Bush himself received 200,000 shares of stock in Harken Energy Corp, in exchange for serving on its board and doing ill-defined consulting. Harken engaged in Enron-style manipulation of its reported profits. Eight days before Harken had to restate its profits, Bush dumped the stock for more than $848,000. The SEC general counsel who gave Bush a free pass was Bush's own former lawyer.
Before the current scandals, this kind of manipulation and insider profiting was considered small potatoes. But now it is a near-perfect echo, in miniature, of everything wrong with corporate America. Bush can moderate his rhetoric as the occasion fits, but he can't escape his own history.
Bush is also far behind the curve in his proposals. His speech called for only the most minimal of accounting and corporate-governance reforms. Several leading Republicans have already embraced more far-reaching reforms than Bush's. Even worse, Bush "challenged" corporate leaders to clean up their act voluntarily. But of course, the scandal precisely reflects the failure of industry self-regulation.
The market's own behavior has refuted a whole generation of Republican ideology, whose centerpiece is the claim that markets can regulate themselves. Though Bush, in best western lawman fashion, used the rhetoric of law enforcement, even he is calling for tougher regulation (without mentioning the dreaded word).
It is a clarifying moment in American politics. The Democrats are remembering, belatedly and after much economic damage, why they don't believe in laissez-faire and why only government can establish the basic ground rules for capitalism. Corporate and Wall Street leaders are badly divided between those who are just keeping their heads down and those who genuinely fear for the system. Republicans are also divided into a dwindling band of true believers in pure free markets and pragmatists who don't want to be running for re-election in the midst of a financial collapse.
In less than a year, Bush has gone from a shallow thinker badly out of his depth, to a popular wartime commander in chief, and now back to an improbable figure to lead the nation out of a very different sort of crisis.
