We've been here before

Presidencies: A century ago, William McKinley dealt with a foreign crisis, but let big business dominate at home. Will George W. Bush do the same?

August 04, 2002|By Thomas Schaller | Thomas Schaller,SPECIAL TO THE SUN

As the second year of his administration takes shape, a president who responded so forcefully to a surprise attack on America boasts a dismal record on economic issues ranging from business regulation to his handling of the economy.

Consider how hollow and halting the president's inaugural words sound today. "Most of our financial laws are the outgrowth of experience and trial, and should not be amended without investigation and demonstration of the wisdom of the proposed changes," he cautioned. "We must be both sure we are right and make haste slowly."

That's not George W. Bush speaking. It's William McKinley. And this is hardly the first time those two have been compared.

It was Bush political guru Karl Rove who repeatedly compared the 2000 Bush-Al Gore election with the 1896 contest that pitted business-friendly McKinley against populist William Jennings Bryan. Rove hopes Bush's election will commence a long period of Republican dominance, as McKinley's victory did.

For all his historical analogizing during the campaign, however, Rove has been curiously quiet about comparing the policies of the two administrations. And maybe that's because Rove knows that the eerie similarities between the two presidencies paint a less-than-flattering picture of his boss.

Upon taking office, McKinley and Bush both faced trying economic circumstances. McKinley's America had just begun to emerge from a financial panic and catastrophic depression that featured higher unemployment rates than the nation would experience at the lowest ebb of the Great Depression. Bush inherited a generally healthy but cooling economy, one that has since suffered from revelations of financial "malfeance" - as the president recently called it - by corporate and accounting executives.

Both presidents were properly viewed as the favored candidates of business interests over labor. Both espoused laissez faire economic philosophies that left each in the difficult position of arguing to do less, not more, to solve the economic problems of their administrations.

But the most striking similarity between the two administrations is the unexpected shift in focus to foreign affairs in response to a surprise attack. The mysterious sinking of the American battleship Maine in the waters off Spanish-occupied Cuba in February 1898 drew McKinley into a publicly supported, congressionally declared war with Spain. The arc of Bush's administration was, of course, forever altered Sept. 11.

With the nation on war footing, both presidents proceeded to drag their feet on economic issues.

On the most vexing economic question of his day - the incestuous corporate trust-building by the Harrimans, Morgans and Rockefellers - McKinley balked. To the glee of the robber baron set, the Supreme Court in 1895 diluted the 1890 Sherman Anti-Trust Act, saying that a sugar-refining concern that controlled 98 percent of the market was not a monopoly. Rather than spend his newfound political capital on trust-busting, McKinley mostly paid lip service to the issue.

Borrowing from the same playbook, Bush's speech last month to Wall Street on the need for corporate responsibility was widely derided as long on words and short on proposed action. His tone has since become more forceful; on Tuesday, Bush signed legislation passed by Congress to strengthen corporate fraud regulations, though it included provisions he had previously opposed. The White House then turned around and quietly issued an interpretation that stripped much of the protection that bill provides corporate whistle-blowers.

With one in six Americans questioning his credibility on this issue, Bush is reacting rather than leading. His last aggressive move came a few months ago when he opposed increases for Securities and Exchange Commission oversight. That the same House Republicans who repeatedly thwarted President Bill Clinton's attempts during the 1990s to enact corporate responsibility standards are suddenly running ahead of Bush on these issues says everything about this president's paralysis.

Another major issue in the late 1890s was fiscal solvency, and "Ohio's Idol" raised import tariffs rather than increase further the already unpopular sin taxes on alcohol and tobacco. "W" cut taxes because to him tax-cutting is the solution to just about every economic problem - government surpluses, government deficits, whatever. Both men avoided administering castor oil solutions, but at least McKinley - in the days before the income tax - proposed alternative revenues to keep the country in the black, whereas Bush blithely pretends that the $1.7 trillion in lost revenues over the next decade will somehow not be missed.

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