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CNN Live Today

Corporate Responsibility Economic, Political Issue for Bush

Aired July 09, 2002 - 12:23   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
AARON BROWN, CNN ANCHOR: If we've been keeping one eye on the stock ticker in the aftermath of the president's speech, the other eye ought to be on the political polls, because this is a story and a situation for the president that covers both dimensions.

Bill Schneider joins us again -- Bill, the politics of this.

BILL SCHNEIDER, CNN POLITICAL ANALYST: Well, the president, I think the theme of his speech was an exhortation to character. He urged. He challenged. He even threatened business executives to show that they know the difference between right and wrong.

Let's talk about structural reform, which is one reason why some people were disappointed, possibly even the stock market. Character is this president's political strength. It's one of the big distinctions between himself and Bill Clinton. One of the major themes of his speech was shaken trust. Let's listen to what he said.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: High profile acts of deception have shaken people's trust. Too many corporations seem disconnected from the values of our country. These scandals have hurt the reputations of many good and honest companies. They have hurt the stock market, and worst of all, they are hurting millions of people who depend on the integrity of businesses for their livelihood and their retirement, for their piece of mind and their financial well-being.

(END VIDEO CLIP)

SCHNEIDER: I mentioned that character is this president's strong suit. It was not Bill Clinton's strong suit. When we asked poll questions, do you think Clinton is a man of honesty and integrity, people always had doubts. Bush's ratings have always been strong.

One thing I noticed in his speech today was that twice he referred to the period of the late 1990s, meaning the Clinton era, as a period of financial excess. He said the late 1990s spawned abuses and excesses, and later he said, the 1990s were a decade of rapid profits, when the seed of scandal were sown. So, I think there was an interesting political theme in there.

BROWN: And as Lou pointed out a little bit ago, there is some resonance among voters when we poll them to precisely that point. I forget the numbers, but essentially people believing that the problem, at least, started on someone else's watch, namely President Clinton's.

SCHNEIDER: That's right. There is a sense that these things started back in the 1990s. This is a typical business cycle throughout America's economic history. You've had good times, which have produced speculative booms in land and in real estate. Then suddenly the bubble burst. There was a panic in the stock market, and usually that quickly spilled over to the economy, mostly because the banking system got in trouble.

Now, we have a Federal Reserve to protect the banking system, but there is still a connection that threatens the economy. The connection is the stock market. That's why the president talked again and again about investor confidence.

So many Americans are now invested in the stock market that he's worried that this bear market, the low stock prices, are going to spill over to economic prosperity, and when that happens, it hasn't happened yet, but if and when that happens, if we dip back into recession, the political consequences will be enormous.

BROWN: Bill, thank you. And thank you for joining us quickly to Jeff Greenfield. Jeff, some final thoughts for you and we'll let Lou wrap it up.

JEFF GREENFIELD, CNN SENIOR ANALYST: Very quickly, when the president said there is no wealth without character, I have a feeling a lot of Americans said, What is he talking about? Because, the whole problem we're dealing with is that there's been a great deal of wealth spread out, as Lou and Patty have talked about, with no character, with people who in fact have violated the rules of character.

And, if the president can not convince the country that he really means in specifics to deal with the fact that a lot of people have grown rich by violating some fundamental principles of fair play, that I think is where the major political fallout is going to come.

And, the fact that the market, the Nasdaq is now at 1,300 instead of 5,000, means things like the president's past business behavior, which didn't matter in past elections, could come back to haunt him.

BROWN: Jeff, thank you, Jeff Greenfield. Lou.

DOBBS: Very quickly, Aaron, what the president said all but ignored, is that there are more scandals out there hidden in corporate America and they have to be rooted out. He made that statement. He's looking to unearth them, but it's a very severe warning.

Secondly, I think that we should, in the context of confidence in the markets we should remember these markets are also working very well. We still have prices that are extraordinarily high, given the earnings. A lot more has to be worked out here in terms of the intrinsics of the market, as well as the issue of character and conscience.

BROWN: Thank you for the cold water.

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