All Newt's Children

July 13, 2002
By Mike McArdle

The economy was tanking. A new corporate scandal seemed to be erupting every day. High profile big shots from Ken Lay to Martha Stewart were cooking books, lining their pockets, destroying the retirement plans of ordinary people and suffering little or nothing in the way of consequences. The entire economic culture seemed to be drowning in ugly corruption. A great ballplayer died and the headlines were dominated by his sons to plan to get rich by freezing the old man's body and peddling his DNA over Ebay. All the while the average guy sat around wondering when he was going to get a layoff notice.

Politically, of course, this is a "do something, anything" situation. So the confused little man who is, at least, supposed to be in charge of it all gave a speech that was supposed to at least take the heat off for a while and restore some public confidence. Led to a podium, symbolically located on Wall Street, he mouthed a half-hearted denunciation of the kind of practices that he himself had profited mightily from in the days before he decided to donate his talents to the rest of us. The stock market responded by going into a two day tailspin from the minute the teleprompter stopped running.

The blame game is in full swing. An attempt was made by some on the far right to blame clintonspecker but since those people tend to blame everything from terrorism to tattooed teenagers on clintonspecker, that rings rather hollow. We needn't look to transcendent concepts or Bubba's crotch for the answer. As much as anyone, the person at the heart of the current scandal is a certain aggressive, chubby guy with white hair.

To most Americans, the 1994 Contract with America is largely forgotten. The high profile proposals like Term Limits and the Balanced Budget Amendment never passed and most of the other proposals were watered down in typical Washington fashion. But the Republican pseudo-revolutionaries managed to succeed in two things, making the lives of the poorest, weakest Americans just a little more difficult than they already were and giving the richest, most powerful Americans the license to steal that created the current environment.

The abrasive, overreaching Newt Gingrich, who in the heady days of early 1995 seemed to see himself as Americas legislative Bonaparte, was exiled to the Elba of Fox News by his own party after the GOP's disastrous performance in the 1998 mid-term elections, but not before he left his mark on the America of 2002.

The trashing of the poor under the guise of "welfare reform" remains Newt's proudest achievement. Its defenders herald it as a huge success based solely on the idea that there are fewer people on welfare. They don't talk about what happened to the people that were there because, frankly, the "reformers" didn't care. The poorest people in our society are largely invisible anyway and whether they left the welfare rolls for minimum wage jobs, a jail cell, or a vent on the street corner didn't matter. All that mattered was that they collected no more government money. The economic boom of the late nineties undoubtedly softened the effect of the new regulations, but although it's a matter of sacred doctrine on the right that poor people are only poor because such people have "bad character" the number of people lacking in character always increases dramatically during an economic downturn. Now as the economy is finding new depths every day there are reports that street crime, the eternal by product of poverty, is way up in the past year.

But Newt also brought us "securities reform," a proposal that passed over Clintons veto. Under the battle cry of deregulation, Newt, in effect, deregulated crime. Now, of course, we're not talking about the kind of crime that those people who lack character commit. This kind of crime is committed with a laptop and a lawyer. Newt's reform shielded law and accounting firms like the now infamous Arthur Anderson from liability for false corporate reporting, and made it a good deal more difficult for investors to bring suit when they have been deceived. In other words, this isn't the kind of deregulation that helps you do business. This deregulation helps you avoid the consequences of running a crooked business. Previously this kind of "Get out of Jail Free" card was available only to those whose father might happen to be President at the time. So it should surprise no one that there was a mad rush through the huge loophole that Newt had pried open. Nearly a thousand US companies have had to "restate" their earnings in the past five years, and they're just the ones who got caught. ("Restate" by the way appears to be a business euphemism for admitting to and correcting a lie). But the people who bought the lie and bought the stock were left with little or no recourse.

The chasm between rich and poor has widened enormously in recent years, but the guys who stick guns in your ribs to take your pay envelope and the guys who stick you with thousands of worthless shares of stock have something in common. They're all Newt's children.

-- Cherri (whatever@who.cares), July 13, 2002