Reduce government size

By Mark Alexander · Friday, July 26, 2002

A potential indicator of renewed confidence in the economy was signaled by the Dow Jones 489 point gain Wednesday, and the fact the market retained that gain Thursday, restoring the Dow above the 8,000 mark. The rally began with the news of the arrest of Adelphia executives charged with embezzlement, and accelerated on news the House and the Senate were reconciled in conference on legislation closely tracking with Demo Sen. Paul Sarbanes' (around our editorial shop we call this guy "Sour Buns") proposal to expand penalties for corporate executives who defraud investors and create a new oversight mechanism to short-circuit accounting malfeasance.

We give this legislation a mixed review: on the one hand the government is exercising its rightful authority to punish injustice; on the other hand elements of the final bill guarantee an invasive approach to managing "free markets." That notwithstanding, President George Bush promised to sign the legislation into law, and asked Congress to have a bill on his desk before its August recess.

Another date on the investor confidence calendar is the August 14th deadline for the CEOs and CFOs of the nation's 947 largest corporations to re-file certified financial statements with the SEC. Only when these firms post their sanctified, revised reports to the SEC (which will be made available to the public on the agency's Web site) can the disconnect between expanding economic indicators and declining security markets be resolved. Historically speaking, in the long run there is no contradiction between the economy and the stock market; the 10 recessions and 10 bear markets since World War II have always yielded higher share prices in economic recovery cycles.

Meanwhile, congressional Leftists, under the direction of House Minority Leader Dick Gephardt, see a windfall of political gain in the current financial market tumult. Despite the fact that the economy is showing healthy signs of renewed growth, the Left is playing security market insecurity for all it is worth in the hope of gaining a majority in the House of Representatives. Gephardt, giddy over the possibility of retaking the House via this dezinformatsia blitz, commented to his caucus in this week's closed-door Democrat strategy meeting, "If this thing plays out right, we could pick up 30 to 40 seats." Of course, "this thing" includes bunching Bush-Cheney with the corporate CEOs of Enron, WorldCom, Global Crossing, Xerox, Tyco, Adelphia, Qwest, etc.

And, Sociocrats just love recessions! After the central and state governments have been living fat and happy off the tax largess from years of capital gains from over-inflated stocks, now that the economy is receding tax increases to offset budget deficits will be the order of the day. The idea of reducing the size of government, of course, is out of the question.