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Wanted: Fiscal leadership
President Bush deserves some of the blame for our fiscal woes. Shannon O’Brien doesn’t. Also, a good idea from the Boston City Council.

PRESIDENT BUSH, like his father before him, doesn’t have the slightest idea of how to deal with a floundering economy. What’s worse, neither does anyone working for him. As Republican senator Chuck Hagel told the New York Times on Monday: "People knew when they listened to Clinton that there was something behind him. There was [Secretary of the Treasury] Bob Rubin, there was an economic team. I don’t think the markets see anything behind this president’s words."

Bush campaigned on a platform of ramming a big fat tax cut through Congress. He succeeded. As we all know now, the enactment of the tax cut essentially coincided with — some might say precipitated — the death plunge of the new economy. After September 11, any hopes for a recovery were put on hold — indefinitely. As much as we needed, and still need, a leader to prosecute the war on terror, we also need someone to lead us out of our lengthening fiscal nightmare. Just when you think things can’t get any worse — devastating cutbacks in human services, layoffs, tax increases — corporate America keeps the nightmare alive: Enron, ImClone, Tyco, WorldCom, Adelphia ... Martha Stewart.

Bush’s response? To tell us in his faux-folksy style to scoop up some of the great bargains on Wall Street. W. obviously doesn’t yet understand the enormity of corporate America’s flame-out and its effects, both economic and psychological, on Americans. But then, why should he? Trading on inside information — what former ImClone CEO Sam Waksal and Stewart are alleged to have done — is familiar territory for Bush, who faced a 1991 SEC investigation when, as director of Harken Energy Corp, he sold stock in the company just before share value tanked. (The investigation was inclusive; although Bush was not charged, the SEC investigator wrote a letter to Bush’s attorney saying that Bush had not been exonerated of the allegation.)

Bush does not seem to realize that investors are taking a pass on some of Wall Street’s bargains because they think today’s markdown could be tomorrow’s accounting scandal. This isn’t going to change until the president enacts meaningful reform on Wall Street. Why, for instance, is it left up to a state attorney general to take Merrill Lynch to task for rating companies like Enron, with which it had a financial relationship, more favorably than companies it was not doing business with? By making a big stink about the favoritism, New York AG Eliot Spitzer won a $100 million settlement from the brokerage firm. Why isn’t Bush leading the charge here?

Maybe it’s because he’s too busy sucking up to those business leaders who have yet to be hauled before a congressional investigative committee. As the New York Times reported, some of the heavy hitters invited to attend his economic confab in Waco, Texas, this past Tuesday are major GOP political donors: Charles Schwab of Schwab, Inc., who gave $406,000 in soft-money donations to the Republican Party in 2000; Glen Barton of Caterpillar, who gave $255,000; and Cisco CEO John T. Chambers, who gave $435,000. Which makes the Waco meeting sound less like a serious attempt to revive the economy and more like a big-money festival of schmooze. Clearly, Bush is way too cozy with big-money interests to lead us out of the mess we’re in.

LAST WEEK, the state announced $4.7 billion in losses for the Commonwealth’s $30 billion pension fund since mid 2000. Though some have tried, it’s absurd to hold State Treasurer Shannon O’Brien responsible. O’Brien doesn’t make the investment decisions. There are several insulating layers between our state treasurer and the pension fund’s money managers. This sensible arrangement was implemented in 1983 to protect the pension from political meddling.

If anything’s to blame for the pension’s poor performance, it might be its heavy investment in stocks and stock funds. Again, O’Brien isn’t the responsible party here; rather, a legislature-mandated goal of seeking an 8.25 percent return is. That may have sounded conservative during the last five years of the 1990s, when the state pension fund — riding the bull market — earned an average annualized return of 19 percent. Historically, however, an eight percent return for a pension is fairly aggressive and all but mandates heavy investment in stocks.

The blame game is a normal part of politics, particularly during a heated gubernatorial primary campaign for a party that’s been out of power for 12 years. But the climate of economic dislocation we are in now lends these attempts to place blame where it so clearly does not belong an emotional edge they would otherwise lack in more stable times. O’Brien simply does not deserve the blame political opponents are trying to pin on her. And attempts to hold her responsible miss the larger point of how the state should deal with Wall Street’s continuing implosion.

IN A RETURN to the social activism we once saw regularly from the Boston City Council, Roxbury councilor Chuck Turner has proposed a measure that would ban discrimination against transgendered people. Currently, only 41 municipalities around the country, along with the states of Rhode Island and Minnesota, have such measures in place, which ban discrimination on the basis of gender identity in housing, employment, and public accommodations. In Massachusetts, only Cambridge has a similar ordinance on the books.

Predictably, concerns have been raised about — what else? — bathrooms. South Boston councilor Jimmy Kelly told the Boston Herald that he’s worried about not giving "equal consideration" to people who might be uncomfortable with a transgendered person using public restrooms. North End councilor Paul Scapicchio told the paper he was worried that restaurants and other public places would be forced to "construct separate facilities for transgenders."

We’ve heard this sort of thing before. White segregationists worried about granting civil rights to African-Americans because they’d be forced to share public restrooms. A favorite line of the Equal Rights Amendment’s opponents was that passage of the law would lead to unisex bathrooms. (Of course, the amendment never passed.) And the military ban on gay men and lesbians seems to rest on the fear that straight men would have to share shower and bathroom facilities with gay men. Please. Let’s put the bathroom canard to rest. Transgendered people use bathrooms in the same manner and for the same reasons that Boston city councilors do. Enough said.

This ordinance is about granting some measure of protection to people who have no protection at all from discrimination that’s based on their attempts simply to live as they’re meant to be. The council should pass it, and the mayor should sign it.

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Issue Date: August 15 - 22, 2002
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