Remember the wailing and caterwauling over Enron? Remember how Senate Majority Leader Tom Daschle, with his merry band of carpers in tow, tried to make it a transitive verb? President Bush, we were endlessly told, was trying to "Enron America," through his proposed budgets, tax cuts, Social Security proposals, choice in neckties, whatever - just so long as Enron and Bush were in the same sentence.
Rather than dampen the hysteria of the political class, the pundits poured gasoline on it. George Will called the collapse of Enron a "systemic crisis of capitalism." Newsweek's Jonathan Alter called Enron "a cancer on capitalism." Bill Press fretted that "the human impact is staggering." Paul Krugman - once a respected economist - declared in his New York Times column that Enron would go down in history as a much bigger and more historical event than Sept. 11. As if years from now our children will ask, "Where were you when Enron filed for bankruptcy, Daddy?"
Well, this all looks pretty silly now. First of all, it's pretty clear that the Bush administration had nothing to do with Enron's collapse. While the executives of Enron (and their accountant-enablers at Arthur Anderson) still have a lot to answer for, the magnitude of their malfeasance is now being recognized as something less than the crime against humanity it was portrayed as a few months ago. For example, most Enron employees were neither "forced" to buy Enron stock nor were they inordinately compelled to hold on to it.
Regardless, Congress will surely pass new laws to "fix" the "systemic crisis of capitalism," but the truth is that capitalism has reformed itself. Companies and analysts have been forced - by the demands of the market - to get their houses in order. Firms are restating profits, clarifying their books, and Arthur Anderson probably will collapse - certainly the most punitive fine a company can receive and a clear warning to other accounting firms.
You would think that after shrieking and ululating like Arab women at a funeral over Enron, the press and the politicians would be a little more inclined to make a fuss over a real "systemic crisis of capitalism": President Bush's craven decision to raise tariffs on steel.
This decision will have a far more staggering human impact than Enron's collapse ever could. Twelve million U.S. jobs depend on cheap steel, and for every one of the ever-dwindling 160,000 steel-producing jobs saved by this steel tax, anywhere from eight to 12 steel-consuming jobs will be lost. Moreover, this will make things like cars, trucks and appliances more expensive for American consumers.
The Economist magazine, the intellectual conscience of English-speaking free traders everywhere, pronounced, "This steel-tariff plan, it is important to remember, lies well outside the ordinary run of bad economic policy: it is so wrong it makes other kinds of wealth-destroying intervention feel inadequate."
Yes, the steel industry is in real trouble in the United States, but mostly because it is bloated and inefficient and cannot compete with new "mini-mills" here in the United States. The big steel companies and their unions argue that an increase in tariffs on foreign steel will save it. Nobody else believes this. Rather, these "temporary" tariffs will simply make the process of pulling off the bandage take a lot longer.
In the meantime, our allies overseas are rightly furious contending that the leader of the free world is against economic freedom. Indeed, on the issue of trade, Bush is more of a hypocrite and less principled than Bill Clinton - and that is a painful thing to say.
Nobody - not even the Bush administration- plausibly argues that this was not political pandering to voters in vital swing states. The call was made over the objections of economists inside the administration and out. Even Alan Greenspan publicly admitted his disagreement, usually a no-no for the Fed chair.
U.S. Trade Rep Robert Zoellick - America's official proselytizer for freer trade - offered the best defense he could: "The only way we can continue to get support from the American people to open markets and trade," he said, "is to use our domestic and international laws to the fullest." Translation: We need to raise tariffs in order to win votes so we can fight for free trade.
To their credit, some of the pundits who overreacted on Enron, particularly Krugman and Will, have been tough on Bush's steel decision. But the media in general has already forgotten the steel story, largely because free-market conservatives in the GOP don't want to hassle their deservedly popular wartime leader, and because the Democrats, Daschle especially, are never going to complain about protectionism.
Enron became an "outrage" because Democrats cynically exploited the media's guilt over Bush's wartime transformation and its obsession with campaign finance "reform." But, when the president actually caves to the political pressures of special interests, to the detriment of millions of Americans, indeed a million times the total number of Enron employees, the media yawns, Democrats applaud and conservatives hold their noses. That's the real outrage.