Democratic Underground  

Depression Watch #6: Catching the ENRON Flu
February 6, 2002
by Jerald Cumbus (JCMach1)

Just as it appeared that the economy might have bottomed out, the economy has taken and Wall Street in particular has been struck down with the ENRON flu.  Like the flu, the only way to stop it is prevention; something which Arthur Anderson neglected in their auditing practices.  Oversight of accounting practices are now plaguing such Wall Street darlings as Tyco, GE, and the de funct Global Crossing.  Investors were also spooked by the seemingly impotent testimony by SEC Chair Harvey Pitt in testimony on Monday.  The current administration seems unable and ultimately unwilling to truly oversee American Securities.  All of this undermines confidence in America's markets and eats at the hear of our economy.

Recent statistics (GDP, unemployment, consumer confidence) on the surface seem to be positive.  However, they  may turn out to be so much phlegm.  For example, it appears that the lowering of the unemployment rate to 5.6% may be only a statistical mirage: a mathematical dry cough.

With deficits for the forseeable future, President Bush's budget also served to undermine confidence on Wall Street and on Main street.  While it lavishes largesse on a few Defense contractors, there was little cheer the heart of investors in flag-wrapped tome.  ENRONomics in its purest form, Bush's budget would perpetuate the incestuous crony-Capitalism of Ken Lay and his ilk leaving the American taxpayers with a multi-billion dollar tax boondoggle that rapes social security and medicare. The flu is spreading.  You might want to cover your noses.

This weeks Depression Watch Economic Depression Indicator stands at:

60.70 (+0.31)

Stock Market woes, and some weakening in U.S. currency have caused a rise in week's EDI despite improvements in GDP and unemployment.


Printer-friendly version
Tell a friend about this article Tell a friend about this article
Discuss this article
Democratic Underground Homepage