Norman Ornstein, a political analyst at the American Enterprise Institute, says the current backlash against corporate malfeasance may mark the beginning of a larger reshaping of politics akin to the backlash against political malfeasance that cost the Democrats control of Congress in 1994.
Then, the Democrats were swept away in a wave of popular revulsion after a Congress they controlled voted itself a generous pay raise, and many politicians were later revealed to have abused their congressional banking and postal privileges.
The economic fallout of the corporate scandals - which for the moment have culminated in the collapse of WorldCom - has already touched a majority of voters. About half of US families now own stock, up from just over 30 per cent a decade ago. And more than half of the average family's financial assets are tied up in stockholding, much of that in retirement plans that were supposed to be a secure nest egg. And despite a surprisingly buoyant economy, unemployment rates are continuing to creep up as companies shaken by the current pessimism continue to shed workers.
Daniel Yergin, author of "The Commanding Heights", a historical study of the clash between free markets and government regulation, said: "The sound of WorldCom collapsing is the sound of the end of an era. The reverberations are being felt across the country, and very strongly in Washington."
Financial Times; Jul 13, 2002
The bulls hide out on Main Street
By Vincent Boland, FT, July 19 2002 19:49
This is the first bear market for the Girls With Cash investment club in New York - and they are hanging in there. The fall in share prices in the US, and around the world, is proving an education all around, says founding member Barbara Eng; and the 14 members - professional women aged between 30 and 50 - are older and a good deal wiser for the experience.
They are not the only Americans worried about their money. According to the Federal Reserve and the New York Stock Exchange, 84m Americans invest in the stock market either directly or through mutual funds or 401(k) programmes. Some 60 per cent of households are shareholders. They have seen in the past two years the steepest and most sustained slide in share prices for two generations.
Some of these Main Street investors are being forced to revise their retirement plans and a few have been wiped out. They are offended by the corruption and greed of corporations such as Enron, WorldCom and Global Crossing and would like to see some people go to jail.
But some close observers of the behaviour of these ordinary investors say there could be a longer-term impact from the collapse of the markets. They say the mix of scandal, share price falls and huge loss of wealth will see the relationship between Main Street and Wall Street, which began with the railways and peaked with the internet, undergo a change not seen since the Wall Street crash of 1929.
Kommentar RE: Sture Eskilsson kan nog intyga att jag, som svar på hans fråga vad man skulle titta på inför framtiden, vid vår angenäma lunch då han, som styrelseordförande i Timbro, meddelade mig att det inte skulle bli några mer pengar från Timbro till mig, svarade att nästa stora sak inom politiken skulle bli de ekonomiska och politiska effekterna av den kommande amerikanska börskraschen. Detta var väl typ 1997.
Klas Eklund: USA har världens starkaste ekonomi
Mats Johansson om Det Stora Språnget i väster
Det Stora Språnget i öster
More about the Great Leap Forward (in the east)
BBC about China (Highly recommended)
Den Nya Eran
More about the stock market