- The Washington Times - Tuesday, July 16, 2002

BIRMINGHAM, Ala. President Bush yesterday blamed the recent spate of financial meltdowns by top U.S. companies on a "hangover we now have as a result of the economic binge" America went through during the Clinton era.
"There was endless profit, there was no tomorrow when it came to the stock markets and corporate profits. And now we're suffering a hangover for that binge," the president said in his second speech in a week intended to restore confidence in the floundering financial markets.
Thirty minutes after the president's speech, the Dow Jones Industrial Average had plunged 300 points and the Nasdaq Composite Index had dropped 25. By day's end, the Dow had rebounded from a loss of about 440 points, but ended down about 45 points at 8,639. The Nasdaq finished the day with a gain of nine points at 1,383.
Mr. Bush did not offer more federal government solutions, as he did on Wall Street last Tuesday, but assured Americans that recent economic indicators point to an end of the economic downturn he said began in March 2000 10 months before he took office.
"This economy is coming back, that's the fact," Mr. Bush said, drawing applause.
He said the 6 percent growth rate in productivity for the first quarter of 2002 is "a pretty good sign that the foundations for growth are there."
"I believe there is a better day right around the corner for all Americans," he said.
Yesterday's speech was the second time in six days that Mr. Bush blamed recent corporate collapses on false profits and lax standards during the Clinton administration of the 1990s.
In a speech last Tuesday from New York City's financial district, Mr. Bush said: "The 1990s was a decade of tremendous economic growth. As we're now learning, it was also a decade when the promise of rapid profits allowed the seeds of scandal to spring up.
"A lot of money was made, but too often standards were tossed aside. The lure of heady profits of the late 1990s spawned abuses and excesses," he said.
That speech, in which Mr. Bush announced the creation of a financial "SWAT team" to design solutions for the continuing accounting catastrophes, was panned by Democrats as insubstantial.
After last week's speech, the Dow dropped more than 600 points in the following days, and the Nasdaq fell to its lowest mark since 1997.
"I understand this, that the American economy is constructed on confidence: confidence to invest and build, confidence for our small-business owners to take risk, confidence that the job base will expand, confidence to produce and hire," Mr. Bush said.
He stood by his commitment to his 10-year, $1.6 trillion across-the-board tax cut and called for Congress to make the cuts, set to expire in 2010, permanent.
Mr. Bush also pushed for Congress to move forward on trade-promotion authority, a terrorism insurance bill and education policy as ways to further spur the economy. He also warned lawmakers not to bust his budget by overspending.
With his voice rising as he leaned into the podium and a scowl on his face, Mr. Bush ripped Congress for sitting on many of his top agenda items. "They're going to say, 'Well, you know, we're going to maybe play this down to the very last minute.' No. Now is not the time for games."
As for corporate ethics, Mr. Bush again called on business executives to return to past practices of full disclosure to shareholders.
"We can't pass a law that says you will be honest. We can pass laws that say, if you're not honest, we'll get you. Corporate America must make the decision each as an individual that you're going to uphold high standards, that you have a responsibility to our society, that you've got the responsibility to your shareholder and your employee to treat both with the respect they deserve," he said.
Mr. Bush did not address the continuing media buzz about his own practices 12 years ago. Democrats have assailed Mr. Bush for collecting $848,560 in 1990 for a sale of Harken Energy stock two months before bad financial projections cut the stock's value by 25 percent. The stock rebounded, however, and a few years later had doubled in value.
But Bush spokesman Ari Fleischer dismissed the criticism as politics.
"The closer it gets to the election, the more frustrated some are with a very popular president who they know the country believes in and the country trusts. And there are some who engage in the old Washington tactic of trying to politically attack the president," he said.
Several of the president's critics Sen. Joseph I. Lieberman of Connecticut and Sen. John Kerry of Massachusetts voted with Republicans in 1995 to make it harder for shareholders to file suits against chief executives.


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