- The Washington Times - Monday, December 30, 2002

What a year this has been.The global battle against terrorism. A looming war to disarm Iraq. Corporate corruption. A lackluster economy that has lost its vigor. And the stock markets struggling to regain trillions of dollars in lost retirement savings.
It's almost enough to make an optimist like me feel a tad insecure about the future. But there are a lot of silver linings in many of these dark clouds that should give us reason to hope for better times ahead.
Surely, it is evident that in the war on terrorism, the United States and its allies have kept al Qaeda on the run. Hardly a month goes by when we do not hear of terrorists being captured in Europe, Asia, the Persian Gulf and elsewhere. The FBI just announced that intelligence agents have foiled hundreds of terrorist plots over the past year.
Behind the scenes, according to intelligence sources, highly secretive CIA and special military operations have eliminated key terrorist thugs and their cohorts abroad, often in close cooperation with our allies.
While the new Department of Homeland Security is getting organized, there can be no doubt we are safer today than we were before September 11, when we had let down our guard and were wide open to attack. In most areas, we are on a much higher level of alert. Security has been improved dramatically at our airlines, ports and borders.
Of course, much more needs to be done. In an open society like ours, we still remain vulnerable. It's a battle we have to fight anew each day as we set about the task of building a new generation of technology to thwart future threats.
I still believe a war with Iraq is probable, but the administration has been saying for some time now that this standoff could end without the United States firing a shot.
While our nation builds its forces in the region and President Bush shows his resolve is not wavering, there are signs Saddam Hussein may cave in. Last week, Iraq announced it is "ready to deal" with U.S. demands to open other suspected sites to CIA agents and to interview its weapons-related scientists without Saddam's agents being present.
But Saddam isn't fooling anyone. This is the yo-yo strategy he has used before. Scientists know their families will be murdered if they reveal any secrets, even if they are interviewed out of the country.
Expect a lot more backing down from Saddam as the day of reckoning draws near. In the end, his own lieutenants may get rid of him to save their hides, or he will flee the country as the U.S. invasion begins and his regime will collapse.
Meantime, here at home, we have scrubbed and disinfected the stain of corporate corruption from our economy. Business executives have been arrested, indicted or have pleaded guilty. Others are still being investigated. Wall Street brokers and major accounting firms have cleaned up their operations. Tougher rules are in place at the Securities and Exchange Commission and on Wall Street.
The biggest fish at WorldCom and Enron are still free, but the system has ruthlessly and efficiently punished corporate misdeeds. In some cases the regulatory remedies have been excessive. But investors have returned to the markets and corporate America is healthier now than it was before the scandal broke.
And what about the economy? Economic growth soared in the first quarter, only to fall and then rise and then fall again as the year went on. GDP in the last three months may be little more than 1 to 2 percent. Not an encouraging sign.
Fed Chairman Alan Greenspan says we are going through a "soft patch," hardly a precise technical term in the dismal science of economics, but one most people understand, especially anyone in business.
Nevertheless, if the American economy showed us anything this year, it was its remarkable resilience after being flattened by the September 11 terrorist attacks, the corporate accounting scandals and the threat of another war in the Persian Gulf.
In some respects our economy has performed better than we give it credit for. Take a look at the third-quarter numbers: GDP grew 4 percent. Productivity was up by 5.1 percent. Investment in equipment and software: up by 6.6 percent. Personal consumption: up by 4.1 percent.
For the entire year, despite its ups and downs, growth should be a little better than 3 percent, an above-par growth rate though far from the 4 percent to 5 percent rates we're capable of achieving.
But don't despair. Some important things are going to occur next year that will reinvigorate this economy. There will be a tax cut bill passed that will put more liquidity into the hands of consumers and businesses. That's going to be good for jobs and for incomes. There will be some new free-trade agreements signed by the United States with our South American neighbors. That will strengthen U.S. exports and help boost the global economy.
The bottom line: This will result in much stronger corporate earnings, and that, in turn, will boost stock values. So keep the faith. All in all, 2003 is shaping up to be a much better year.

Donald Lambro is chief political correspondent for The Washington Times and is a nationally syndicated columnist.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide