Americans whose pensions have been undermined could take out their anger on the Republican party, writes Patrick Smyth, Washington Correspondent
Only two years ago, during his presidential campaign, George Bush made much of his controversial plans to privatise elements of the state's pension system. The idea was to allow citizens to take back part of the money invested on their behalf, and to invest it themselves in the markets.
The process was supposed to make every worker a capitalist. However, the US administration has done little to put the idea into practice, and it will probably remain on the backburner.
Times have changed. Shareholder confidence has been battered by corporate scandals and the markets have gone into reverse. Many ordinary shareholders - not just those who tragically staked too much of their pensions on their own apparently thriving employers - are hurting.
In the year to June 2002, the number of over-55s in the US workforce jumped most unusually by some 8.4 per cent, or 1.6 million, while those in all other age categories declined.
It is a measure not just of the ageing American population, but of the huge numbers who have been forced to postpone retirement because their nest-eggs have evaporated, according to organisations for the elderly.
Many of them are angry, and Republican politicians are beginning to worry that they might take it out on those identified with the administration. It's an important constituency. While half of all Americans now have a stake in the stock market, Mr David Winston, a Republican pollster, estimates that as many as 71 per cent of those who voted in House elections in 2000 owned shares.
"Too many people have lost too much money to ignore all that has happened," Mr Frank Luntz, another Republican pollster, told the New York Times. "When you have a third of people in their early 50s and their early 60s saying their retirement has now been delayed because of the market, you've got an angry segment of the election. And they are voting."
The reality that made Mr Bush's pension message popular two years ago may now cost him dear as disillusionment sets in - not with capitalism as such, but with its unchecked managerial elite. Americans, they are discovering, are not living in the capitalist dreamland of Republican ideologues, a shareholder democracy. What they are coming to realise is that their country is a CEOcracy, a cross between a pure plutocracy and a kleptocracy, where the little investor truly counts for little. And, as Democrats will point out in the autumn mid-term elections, nothing better reflects that ugly reality than an administration made up of CEOs. Even President Bush was a CEO once, of the Texas oil company Spectrum 7, whose acquisition by Harken Energy would bring him the share options whose sale is now causing him so much grief.
Vice-president Cheney was CEO of Halliburton, whose accounting practices are being investigated by the Securities and Exchange Commission, and the Secretary to the Treasury and friend of Bono, Mr Paul O'Neill, did the job for the giant Alcoa.
The Secretary of Defence, Mr Donald Rumsfeld, was the CEO of both GD Serle and General Instrument; the Commerce Secretary, Mr Don Evans, of energy concern Tom Brown; and the President's Chief of Staff, Mr Andrew Card, of the Automobile Manufacturers' Association. The Labour Secretary, Ms Elaine Chao, is the former CEO of the massive charity United Way of America. It is precisely the managerial elite from which they are drawn - with their handmaidens in the accountancy profession - that is the focus of popular anger in the present crisis.
Instead of representing shareholder or employee interests, this elite, unconstrained by real accountability, has fashioned reward schemes in the form of share options and accounting practices that put short-term personal interests ahead of the long-term interests of their companies. At their greediest, such imperatives have stimulated criminal conspiracies that have driven companies like Enron and WorldCom on to the rocks.
Columnist William Buckley jnr is one of many right-wing Republicans who have lashed out at what they see as the feebleness of the Bush response to the crisis.
"Jail them," he says bluntly of offending managers. "When an official of WorldCom reports that he could see nothing wrong, let alone unusual, about classifying moneys dispensed as capitalised expenditures when in fact they were moneys spent in doing business, the question arises: Can that man see anything as wrong? And, if so, does he emerge as simply one criminal practitioner, or is he a member of a class newly acceptable in American business?"
Can the President shake off his association with this sub-species of the capitalist class? Nervous Republicans doubt it and are breaking ranks with the President in Congress, as the election campaign gets under way, to back Democrat-sponsored Bills which, months ago, they would never have considered.
These range from measures to ban boardroom loans and set accounting standards to attempts to penalise companies which move their tax bases offshore.
"To corporate CEOs, and the accounting firms that audit their companies, let me be very clear," a radicalised Representative Mike Ferguson (Rep, New Jersey) said last week. "If you violate the public trust, if you flush down the drain the retirement security of millions of Americans, you will - and you deserve to - go to jail."
And Mr Bush's woes in corporate America have been compounded by the announcement last week that the government will this year run a $165 billion deficit, a sharp about-face after four years of surpluses.
Next year is likely to be worse at some $200 billion and the Democrats will certainly remind voters that Mr Bush forced through tax cuts last year of $1.35 trillion over ten years.
They will have plenty of ammunition to argue that the administration is pushing the economy back into deficit-mode and, in doing so, jeopardising social security (pensions) and Medicare and threatening the historically low interest rate regime the country is now enjoying.
Mr Al Gore's running-mate and a likely contender next time, Senator Joe Lieberman, warns that "having re-established ourselves in the 1990s as a party of economic growth, it's very important that, as we respond to this, we don't overreact so that we become an anti-business party again".
But defending shareholder rights is scarcely akin to the class war, and the party's leadership has been dying for an issue on which to expose Bush.