Last week, speaking in Mississippi near the corporate headquarters of the now bankrupt and disgraced WorldCom, President Bush consoled fired workers with his shopworn canard that the loss of their jobs was the result of "shady corporate practices" that deeply shocked him.
This naivete, if not feigned, reflects an embarrassing stupidity about how he and his corporate buddies played the capitalism game during the last decade.
Companies like WorldCom and Enron were not a natural manifestation of the free-market capitalism celebrated by the likes of Adam Smith. The corporate manipulators of the market that we are now seeing were precisely the enemy of the "invisible hand" celebrated in Smith's economics classic, "The Wealth of Nations" -- they betrayed the solid post-Great Depression regulatory foundation designed by President Franklin D. Roosevelt to prevent large corporations from subverting the integrity of the free market.
The fervent deregulators of the last two decades were not interested in a truly free market in which profit is dictated by consumers choosing what they want to buy. On the contrary, although government interference in the economy was corporate America's most convenient scapegoat for its failures, this was also exactly what it wanted. Regulations that suited its purposes were just fine. Corporate America was very much against government action to protect the environment, consumers, the poor or even shareholders trying to read annual reports, but it had no compunction about buying legislative loopholes that the clumsiest of con artists could jump through.
Without such loopholes, snake-oil salesmen would not have been able to transform Enron -- a small energy company affected by logical legal restraints on utilities -- into the dominant manipulator of the U.S. energy market before it became a flaming wreck.
Similarly, WorldCom was only a minor player until the Telecommunications Act of 1996, pushed through Congress by Rep. Newt Gingrich and Sen. Trent Lott and signed into law with the enthusiastic support of corporation-friendly "New Democrat" President Clinton. At the behest of lobbyists for WorldCom -- based in Lott's home state of Mississippi -- the senator stuck in an amendment specifically designed to enable WorldCom to grab a huge chunk of the telephone market.
At the time, WorldCom was lagging badly behind the big three long-distance carriers. Lott's legalese, however, turned this to the company's advantage by specifying that only companies -- such as WorldCom -- with 5 percent or less of the long-distance market could enter into joint marketing agreements with local phone service suppliers.
The firm was thus free to buy MFS Communications, then the top alternative provider of local phone services, for $12.4 billion and became the first company to provide both local and long distance since deregulation forced the breakup of the Bell system.
Lott was rewarded for his efforts with major contributions from WorldCom to him and other GOP politicians who had propelled him into the top leadership position in the Senate. WorldCom also granted a cool million to help underwrite the Trent Lott Leadership Institute, which presumably will train future politicians to comply with the wishes of corporate lobbyists.
Thus was born the overreaching, out-of-control and fundamentally dishonest corporation that is now in bankruptcy after conceding false accounting of more than $7 billion. Bush condemns such irresponsibility without ever daring to examine its roots. Is he clueless, or is it that he just doesn't want to know?
Bush was in Mississippi not just to console the WorldCommers, but to help raise a quick half-million dollars for the campaign of Rep. Charles W. "Chip" Pickering, the Republican candidate for re-election who "represents" many of the fired WorldCom workers. Pickering got that job after being an aide to Lott on the very telecommunications issues that favored WorldCom, which returned the favor with $80,000 in contributions to Pickering.
When Bush said, "I met WorldCom employees who no longer have work, who are disillusioned like me and others about the corporate fraud which is taking place in our country," it might have provided comic relief if the president had turned to Pickering and Lott, and asked them whether they were now sorry for creating this monster. Or maybe not -- the risk is that they might have turned the question back on Bush, in pointed reference to his own sordid history of business shenanigans.
Shares