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CNN Live Today
President Bush Taking Big Business to Task
Aired July 10, 2002 - 10:21 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.
DARYN KAGAN, CNN ANCHOR: Well, we mentioned President Bush earlier. He is taking big business to task about the corporate scandals that have rocked Wall Street and left thousands of people unemployed. Mr. Bush yesterday had some strong words for business leaders. Some say, though, it is a time for stronger action. And, as we welcome in our Senior Political Analyst William Schneider, Bill Schneider to those who know him well, we're going to talk to him about that. Bill, I do just want to mention to our viewers, we are standing by. The president is expected to speak...
BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Yes.
KAGAN: ...to some federal employees, talking about homeland defense and homeland security.
SCHNEIDER: Right.
KAGAN: Which actually ties in quite well with what Kate Snow was just talking about, but you and I get to talk about what the president spoke about close to Wall Street yesterday, and that is the anger in America over these corporate scandals that we keep hearing so much about. The biggest criticism of the president's speech yesterday, strong words, but where's the action?
SCHNEIDER: That's right. The president talked tough. He denounced corporate wrongdoing. He said he would increase prosecution, increase the penalties, but the problem is, and a lot of people were pointing to this after the speech, it's very hard to prove securities fraud, corporate fraud, as an actual crime. Very few convictions have ever really come out of this.
What you have to do is change the rules, because a lot of what happened doesn't actually come under the category of crime. It comes under the category of bending the rules, taking advantage of loopholes, taking advantage of tax laws, and the president didn't really address that. He just said, I'm the sheriff. I'm getting the posse out, and people who do wrong are going to jail, and a lot of people think that's not going to make much difference.
KAGAN: Yes, in fairness to the president, he really did talk about stiffer sentences, but again the criticism is, forget stiffer sentences, even a day in jail would be scary to these executives if they actually thought there was a chance that they are going to make it easier to prosecute. SCHNEIDER: That's right. The problem is the rules, the rules under which Wall Street and the securities industry does business. He didn't talk too much about changing those rules. He just talked about stiffening the penalties.
KAGAN: What about the Democrats? This would seem to be yet another, a softball handed to this party. Why don't you take this and just run with it and really exploit the Republican image of being the big business party? And yet, it seems no matter what the Democrats are handed, they can't quite seem -- if they're in the red zone, they can't convert, to use a football term.
SCHNEIDER: The Democrats are running with this. I mean they fell all over themselves yesterday denouncing the president, too little, too late, talk loudly, did not carry a very big stick. They're going to pass a law, which the president is likely to sign, unless there are a few things in there that he strongly objects to. Most likely, he'll sign what Congress comes up with, so there's unlikely to be a serious face-off.
But you know, the real test of this new policy of the president's, isn't getting a law through Congress. It's getting the stock market up. The real political impact is going to be what happens to the economy. That's what the president's speech was aimed at, because more and more Americans are invested in the stock market. They're worried about their retirement savings.
I'll put it this way. If the stock market continues to fall and overflows to the economy and we go back into recession, then the president and the Republicans are in very serious trouble. But, if the economy continues to recover and the stock market itself recovers, I don't think the Democrats can make their case very well.
KAGAN: All right, and one more question for you, but you brought up the stock market, so I'm going to bring Joya Dass in here, so don't you go away, Bill.
(WALL STREET REPORT)
KAGAN: All right, Joya Dass on Wall Street.
So, Bill, that answered your Wall Street question for today. If that's the test for the Republicans and for President Bush, I think the test for the Democrats is the November congressional elections, and can they convert into gaining more seats in Congress.
SCHNEIDER: That's right and the president pointed two conflicting signs. He said the signs on the economy are good, and they are overall pretty good. The recovery is continuing, but, the signs of scandal, fraud, and the stock market, those are all very bad.
The question is can he insulate the economy from the bad news on the stock market, which is fed by the business scandals? If he can do that, he succeeded and that's the test, not getting a law through Congress.
KAGAN: All right, Bill Schneider in Washington, D.C. Bill, thank you so much.
SCHNEIDER: Sure.
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