Google+

Kudlow’s Money Politics

Larry Kudlow’s daily web log of matters political and financial.

The Terrorism Front



Text  



Nobody seems to believe me, but I continue to think that this terrorist sting by Canadian authorities has jolted the American stock market and reawakened the deep-seated fear about homeland security and the potential for another terrorist attack.

A couple of the would-be Canadian bombers came from Georgia. And, we know from terrorism expert Steve Emerson and others that there are a lot of terrorist cells operating in the U.S.

In fact, a new CBS report claims that a number of U.S. officials believe recent incidents point to an imminent threat, perhaps by the end of 2006.

This of course is why electronic surveillance is so incredibly important.

This is why we must give our security and law enforcement people wide latitude.

We are blessed that nearly five years have passed since 9/11 without another successful terrorist attack; several potential attacks have been thwarted. But this Canadian story brings home the ongoing danger and our vital need to remain vigilant.

Larry on Batchelor Radio Tonight



Text  



Larry will co-host with John Batchelor tonight on ABC Radio Network’s nationally syndicated “The John Batchelor Show” from 9:00pm – 1:00am EST.

Please click here for more information.
ADVERTISEMENT

Lowry on Haditha



Text  



My old National Review buddy Rich Lowry has some insightful thoughts on the growing Haditha imbroglio.

“No military in the history of the planet has ever been as observant of the rules of warfare and as discriminate in its use of force as ours. But no large organization can be utterly free of weak or evil men. In their rush to find a broader meaning in such horrible events, liberals weirdly attenuate their own ability to condemn the perpetrators.

…A combat environment presents stresses unimaginable to the civilian, and perhaps no combat is more difficult than fighting an urban insurgency. But tens of thousands of American troops have faced it without going door to door killing people in cold blood. Pointing to Haditha and saying that it means we have to leave Iraq would be a little like pointing to the New York City police officer who sodomized a suspect with a broomstick and saying that the NYC Police Department should exit New York because the stresses on its officers are too great.

If Marines in Haditha did what they are accused of, it’s a terrible crime unrepresentative of the American military. Period.”

Click here to read the whole NRO article.

The Enemy is Still Out There



Text  



This story about seventeen Canadian Muslims caught plotting an Al Qaeda terror campaign is an eye-opener.

It ought to serve as a serious wake-up call here at home.

While the evidence is still being gathered, one thing looks clear: These thwarted thugs wanted a lot of innocent blood.

These evildoers had their hands on three tons of ammonium nitrate’”three times the amount used in Oklahoma City, when the Murrah Federal Building was blown up injuring 800 people and killing almost 200.

Fortunately, officials from Canadian intelligence and law enforcement were all over them. Hats off to them for preventing what could have been a horrible loss of lives.

Back here in the states, we know that these monsters are already among us. We know their cells are growing. And, most of them arrive here legally through visas. (Terrorism expert Steve Emerson has been warning us about this for many years.) So, calls for tightening the borders isn’t going to keep us safe. We are already in danger.

What we need to do is get behind the G-Men who are charged with the enormous responsibility of protecting American lives. We need to get behind the NSA. We need to get behind the Patriot Act. We need to pay particular attention to the schools and mosques where these evil elements grow like weeds planning their terror strikes against innocents. And this includes wiretapping, and other forms of surveillance where necessary, like the Internet monitoring successfully used by the Canadian authorities to ferret out these latest terrorists.

All this lefty ACLU carping about privacy violations, government intrusion and Fourth Amendment violations is a bunch of garbage’”much ado about nothing. And the liberal mainstream media have their heads in the sand on this issue as usual.

The fact is, these anti-terror programs are precisely why we haven’t had another attack on American soil since 9/11. They have been a tremendous success.

We need to reaffirm our commitment to unearthing terrorists here in the U.S.

Mon, June 5th - 8:34 AM



Text  



“We who live in free market societies believe that growth, prosperity and ultimately human fulfillment, are created from the bottom up, not the government down. Only when the human spirit is allowed to invent and create, only when individuals are given a personal stake in deciding economic policies and benefitting from their success — only then can societies remain economically alive, dynamic, progressive, and free. Trust the people. This is the one irrefutable lesson of the entire postwar period contradicting the notion that rigid government controls are essential to economic development.”
- Ronald Reagan
ADVERTISEMENT

More Than Half Full



Text  



You can’t win with the economic pessimists.

The cult of the bear reigns supreme on Wall Street these days, as those who want to tear down the economy continue manufacturing reasons to justify their declinist philosophy. If jobs reports come in above expectations, naysayers predict inflation. If reports come in below, they predict recession.

So, today’s 75,000 increase in non-farm payrolls was greeted derisively, despite the fact that over the past 33 consecutive months, 5.3 million new jobs have been created. Over the year ending in May, 1.9 million new jobs have been created and the unemployment rate moved down to 4.6 percent, the lowest in nearly five years’”below the average jobless rate of the last 45 years.

But wait, there’s even more: the household survey, which focuses on self-employed owner-operators of new entrepreneurial businesses showed a booming May jobs report of 288,000. I have not heard a peep anywhere about this.

In fact, all this year, the entrepreneurial household sector has produced 1.2 million new jobs (including 326 thousand self-employed) compared to only 730,000 from the corporate establishment payroll survey.

Historically, when a big spread opens up between these two series, it is the payroll survey that gets revised upward, or that catches up in future months. This was particularly the case in 2003 and 2004, when Democrats who proclaimed a jobless recovery had to eat crow.

Studies done by the Labor Department acknowledge the importance of the household survey, which is where the unemployment rate is derived. Economists at the Bureau of Labor Statistics have offered a ’split the difference’ rule of thumb to reconcile the two surveys. Using that approach, you get 964,000 new jobs year-to-date, or 193,000 per month.

The economy is so strong that more and more people are still entering the labor force to get jobs. The civilian labor force has expanded by 838 thousand this year. Meanwhile, those not in the labor force but who want to work is up 400 thousand. Discouraged workers are down 128 thousand.

Right now, total employment in the U.S. stands at a record high of 144 million. This is a big number, just as 4.6 percent unemployment is a low number. In fact, the number of unemployed has dropped by 2.2 milllion since the mid-2003 peak and by 400 thousand this year.

Over the past three years alone, real GDP in the U.S. has been averaging 4 percent annually. After tax business profits, the mother’s milk of business and the stock market are at a record high. And, despite rising gas prices, consumers are still spending according to the May report or comparable same store retail sales. (‘Consumers Shop with Enthusiasm in May’ according to the AP. Here’s a second one ‘Retailers Report Solid May Sales as Department Stores Stand Out’ from the Wall Street Journal)

Consumers are spending because jobs are rising and incomes are expanding. Average hourly earnings in the May jobs report are running 3.7 percent above a year ago; while average weekly earnings are growing at 4 percent. Both are running well ahead of inflation, even including the gas spike.

Most important, the workforce is earning their salary gains through record productivity. Non-financial business output per hour is rising at 3.7 percent which means that productivity adjusted labor costs are actually falling by nearly one percent per annum.

In other words, the workforce is getting raises that do not interfere with business profitability. And, record low tax rates on capital formation point to a continuation of this highly favorable economic scenario for years to come.

You know what? The real economic truth is that it doesn’t get much better than this.

Put politics aside, leave the Bush-bashing alone for just a moment, and a thorough examination of all the economic statistics plainly shows that in fact, we’ve never had it so good. This is a long-playing story that goes back to the Reagan revolution 25 years ago which reformed resurrected and streamlined the free market entrepreneurial capitalism system in America. Nitpickers and ankle-biters will always see the economic glass as much less than half empty.

I continue to view it as much more than half-full.

Kudlow Radio



Text  



The Larry Kudlow Radio Show can be heard live this Saturday from 10:00am until 1:00pm (EST) on New York’s 770 AM radio dial. If you are located outside the greater New York area, you can tune in live to Larry’s show via the Internet at www.wabcradio.com.

Larry is also a regular guest every Friday night on Hugh Hewitt’s nationally syndicated radio show. Tune in at 7:20pm (EST) to catch Larry and Hugh discuss the latest political and financial news. (Check your local listings or listen live via Hugh’s website at www.hughhewitt.com.)

Babbin on Haditha



Text  



Jed Babbin is right on the mark with Haditha.

To My Friends on the Right



Text  



To my conservative friends on the right who don’t like the idea of American talks with Iran, let me just say this: We cannot bomb them before we talk to them.

The American body politic won’t permit it.

I am not against bombing Iran if that’s what it will ultimately take to stop these crazy theocratic thugs from making nuclear weapons. And, I would prefer tough financial and economic sanctions to precede a military response.

But the key point is that the American public will demand diplomacy. I don’t care about Western European opinions; nor do I care one wit about the so called, ‘Arab Street.’ But I do care about supporting our military here at home, and that is one reason why I am in favor of direct Iranian diplomacy.

I also believe we should attempt, in good faith, to strike a trade and investment deal, along with strict weapons restrictions and inspections. I am convinced by the arguments of my friend Tom Barnett, who is a brilliant out-of-the-box defense thinker. Barnett believes that connectivity is vitally important, even in the darkest corners of the world.

And I recall, frankly, that when Ronald Reagan started a dialogue with Mikhail Gorbachev, he was heavily criticized from many on the right. We know how that conversation ended.

Again, let me repeat: if bombing is the ultimate endgame to stop these Iranian thugs, then so be it. But we have much work left to do before we get to that point. And part of that work must be to persuade an American public, which, regrettably, has soured on Iraq for a number of reasons, some good, some not so good.

But the reality is that we need to talk to Iran first.

Shame on Harry



Text  



Harry Reid has been a Washington political insider for close to 25 years.

25 years.

You’d think that at some point during his quarter of a century in Congress, somewhere along the line, Mr. Reid would have learned at least a bare minimum of the ethics rules.

At the very least, you’d think Reid would’ve known that Senate ethics rules specifically warn against accepting gifts from individuals or groups trying to influence official action. You’d think Mr. Reid would recognize that $1400 dollar ringside seats to a boxing match, courtesy of the agency attempting to influence him on legislation, just might falls into this category.

Apparently not.

To make matters worse, on Tuesday, the day after the AP reported that he accepted these $1400 seats (while Sen. McCain paid for his tickets in full) Mr. Reid’”Senate Minority Leader, no less’”told reporters he would continue to accept such tickets and did not believe he did anything wrong.

What?

Reid’s reasoning? Well, he believed it was okay to accept the tickets because they were gifts from his home state of Nevada, and that John McCain had to pay for his because he was from Arizona. Huh?

First of all, Senate ethics rules by and large allow senators to take gifts from any state, not just their home state. And, as mentioned above, the rules specifically warn against accepting gifts if the giver may be trying to influence official action. So both of Reid’s points make absolutely no sense at all.

And, to top it off, as if Reid couldn’t dig a deeper hole for himself, he offered the lame rationale that he felt obligated to accept the tickets so he could ensure boxing was being conducted properly in Nevada.

Holy smokes.

What, is Harry Reid now moonlighting as Nevada’s boxing commissioner?

As a former Justice Department prosecutor put it, “He is no more obligated to go to boxing matches than he is to a Celine Dion concert in Vegas.”

So, the fact that Reid has finally come clean on his original ethical lapse, and his subsequent tortured bungling of the ethics rules, really doesn’t mean much.

Reid is a day late and $1400 dollars short.

(Note: On second thought, after having said all that, if in fact Harry Reid does like boxing, this could be a very good thing. Maybe we have to rethink this. The anti-war Reid should apply his love for boxing to the noble American effort to fight (yes, that’s right fight) our enemies in Iraq, Afghanistan, Iran and throughout the world.

In fact, the supreme boxer attempting to knock out their opponent right now is the United States military. So perhaps Mr. Reid can generalize from a hard-fought boxing match’”unethical as his seats may be’”to the need to fully back America’s armed forces as they fight our terrorist enemies around the world. It’s good to see liberals going to boxing matches’

Thu, June 1st - 8:22 AM



Text  



“We reject without qualification the anti-Americanism now infecting so much left-liberal thinking. The United States of America is a great country and nation. It is the home of a strong democracy with a noble tradition behind it and lasting constitutional and social achievements to its name. Its peoples have produced a vibrant culture that is the pleasure, the sourcebook and the envy of millions”.

Click here to see (surprise) who penned this paragraph.

Hang ‘Em Up



Text  



The American Spectator has an excellent article (’Hastert La Vista, Baby!’) explaining the countless reasons why it’s time for Dennis Hastert to go.

Here’s an excerpt:

’[T]he recent embarrassment of his wild over-reaction to the FBI’s search of Rep. William Jefferson’s office is merely the 100-pound load that, combined with tons of ethical dead-weight, broke the elephant’s back.

…Hastert has exhibited the arrogance of power that leaves him clueless both as to ethical concerns and as to the political damage such arrogance can cause to his own party. The House GOP’s hubristic culture, the culture that makes its members feel immune to expected mores and to any blowback from a disgusted public — the culture that, even after the Abramoff and DeLay scandals, makes them unwilling to pass serious reforms on ethics, lobbyist disclosure, and earmarks — is what has led the House overall into even-worse poll ratings than the stupendously low scores President George W. Bush has been receiving in recent months.

…If Hastert’s outburst against the Jefferson search were an isolated incident, a rare lapse in judgment, it certainly would be forgivable. Because, however, it is part of a consistent pattern of abuses of ethical norms or of simple fairness, and because Hastert’s own compromised image is helping drag down his whole party’s electoral prospects for November, this Speaker should silence himself politically.’

It’s time.

Corruption Has No Party Loyalty



Text  



Nancy Pelosi has been wagging her finger a lot lately (Harry Reid a lot less…); pointing out the ‘culture of corruption’ she claims has an exclusive grip on the GOP.

Apparently, Mrs. Pelosi has chosen to overlook a spate of Democratic malfeasance occurring right underneath her nose. To name a few:

Rep. William “How’d that cash get in my freezer?” Jefferson’s (LA) $100,000 cold hard cash bribery scandal (while the Congressman continues lying and stonewalling);

Rep. Alan Mollohan’s (WV) laundry list of financial improprieties involving nonprofit organizations receiving millions of dollars in federal funds while he was involved in real estate deals with officials from those groups. Mollohan has since stepped down from his post on the ethics committee and is now being asked to step down from his position on the appropriations committee;

And, all the way to the top, with news that Senate Democratic Leader Harry Reid accepted free ringside tickets to three boxing matches from the Nevada Athletic Commission, while the agency was trying to influence him on boxing regulation. (To make matters worse, two Republicans who attended the fights with Reid dealt with matters above deck’”Sen. John McCain insisted on paying for his tickets, while Sen. John Ensign (R-NV), recused himself from participating in Reid’s pending legislation.) All this, on top of Harry Reid’s involvement in the Jack Abramoff scandal where he swung the bat on behalf of a number of the disgraced lobbyist’s clients.

There’s no question that corruption exists in Congress. A thorough clean-up is long overdue. And Denny Hastert’s dopey rush to impugn the FBI’s handling of the William Jefferson investigation was nauseating and emblematic of this problem.

In fact, Hastert’s pathetic, meathead, numbnut, first response to defend ‘Cold Cash’ Jefferson, and attack the FBI G-Men, is just about the worst, most absurd political thing I’ve seen in ages.

When I first read Hastert’s ridiculous response, the first thought that sprung to my mind was, ’You know what? You Republicans don’t deserve to be in the majority in the House. You deserve to lose.’

Oh, and by the way, I’m still waiting for the “Great Budget Earmark Reform” to stop the corrupt lobbyist cash for legislative favors that has exploded in recent years.

You know, with a Democratic House and Senate majority, one that will undoubtedly legislate higher taxes and higher spending, George Bush will become the great ‘Veto-Man’. Maybe he’ll look a lot more like Grover Cleveland, the greatest veto man in Presidential history; and a lot less like The Great Society man LBJ.

(In fact, Grover Cleveland, who was free trader and wanted lower tariffs, stuck by the gold standard, and vetoed spending, is one of one of our most underrated presidents of all time.)

As for Nancy Pelosi; she has it all wrong–again. This corruption nonsense knows no party loyalty.

Wed, May 31st - 9:58 AM



Text  



If President Bush is a “renegade rightwing extremist,” then what does that make ALGORE?

Just wondering…

Eating His Words



Text  



“John Snow will have a replacement, and he may very well come from the corporate world. But if it’s an A-list Wall Street CEO, I’ll buy a copy of Dow 36,000 and eat the first chapter.”

- Slate.com’s Moneybox columnist, Daniel Gross, in the final paragraph of his April 7th column, “Snow’s Job: Why no Wall Street CEO wants to be the new Treasury secretary”

According to The New York Sun, it appears Mr. Gross intends to fulfill his promise in light of Goldman Sachs CEO Hank Paulson’s nomination.

Tue, May 30th - 1:22 PM



Text  



Larry will co-host with John Batchelor tonight on ABC Radio Network’s nationally syndicated “The John Batchelor Show” from 9:00pm – 1:00am EST.

Please click here for more information.

Tue, May 30th - 12:44 PM



Text  



According to the Financial Times: “The internet will this year overtake national newspapers to become the third biggest advertising medium by spend, according to authoritative forecasts.”

Paulson is a Good Choice



Text  



People tell me it’s not easy being a pro-Bush Republican in the executive suite at Goldman Sachs.

So give Treasury nominee Hank Paulson some credit for holding the line. And give Josh Bolten credit for indefatigably recruiting Paulson, his former Goldman partner, even in the face of apparent turndowns.

Mr. Paulson is a well-regarded, top-rated Wall Street exec at the powerful Goldman Sachs who will bring considerable credibility to the top Treasury job. He is a confirmed free trader who strongly supports deepening economic relations with China.

Mr. Paulson also supported Bush’s investor tax cuts, and has worried out loud about the impact of SarBox on American competitiveness.

Goldman insiders tell me that he is something of a ‘greenie,’ having been active in the Nature Conservancy, but they say he’s no Al Gore, and prefers technology advances by private enterprise to solve energy and any global warming issues.

We don’t know his specific view on the value of the U.S. dollar, but hopefully he’ll work with Ben Bernanke to strengthen the greenback and hold down inflation expectations.

Whether there’s a pro- growth tax reform agenda, or a new look at Social Security and other entitlements remains to be seen.

My guess is Mr. Paulson will command much more policy influence at the Treasury than his predecessors had. All in, Paulson looks like a good choice.

The head of arguably the world’s most prominent banking company, a Republican (who actually served in the Nixon administration 30 years ago) and stayed on board with George W. Bush, looks like a good, strong, capitalist choice.

Snow’s Replacement?



Text  



My pal Andy Roth over at The Club for Growth emailed me earlier today asking me my opinion about who ought to replace John Snow over at the Treasury — specifically, what my thoughts were on David Mulford who presently serves as the U.S. Ambassador to India.

I thought you might enjoy reading our little exchange…

—– Original Message —–
From: Andy Roth
To: Lawrence Kudlow
Sent: Friday, May 26, 2006 2:25 PM
Subject: treasury?

Larry,

What are you thoughts on who might replace Snow at Treasury? Here at the Club, we’re getting asked that question from members and the press so I thought I’d ask you.

Know anything about this Mulford guy? David Keating, our executive director, has heard good things about him. I’m skeptical of almost anybody who would take the job considering how the White House controls everything in the executive branch — no unapproved, independent thinking allowed.

ABR

Andrew Roth | Director of Government Affairs | The Club for Growth

And my response to Mr. Roth:

—– Original Message —–
From: Lawrence Kudlow
To: Andy Roth
Sent: Friday, May 26, 2006 2:44 PM
Subject: Re: treasury?

Mulford could be good. He wasn’t great under Papa Bush and Nick Brady when he was undersecretary, but he has moved away from the IMF and toward harder money over the past decade. I think he’s a low-taxer. Don’t know about tax reform.

Look, the two best would be Steve Forbes and Phil Gramm. No question. Far and away. That’s where Bush and Bolten should go. Would really send a message on tax reform and budget reform and a hard dollar. Would electrify the markets. Would energize the base.

Longer shot good candidate would be Bill Thomas.

Have a good memorial day.

(House leadership on earmarks is pathetic. Pathetic. Senate isn’t even that good.)

Best, Larry

Adam Smith’s Message



Text  



We learned a couple of hundred years ago from Adam Smith’s The Theory of the Moral Sentiments that capitalism requires a moral and ethical center if it is to function effectively to the benefit of all involved. Many have read (or pretend to read) The Wealth of Nations, but many more should read Smith’s earlier book on the moral base necessary for markets to properly operate and thrive.

Nearly thirty years ago, I came to an appreciation of this through the great Irving Kristol. Mr. Kristol’s writings often emphasized the importance of capitalism’s moral compass. Not surprisingly, his wife, (the brilliant historian Gertrude Himmelfarb), often wrote about the importance of morality in society, culture and the economy’”including her great book called, The De-Moralization of Society: From Victorian Virtues to Modern Values. Bea Himmelfarb admires the Victorians in English history as an example of a moral society.

These thoughts come to mind as I peruse the accounts in today’s papers of the convicted Enron crooks Ken Lay and Jeffrey Skilling. Of course, we all knew they were crooks, well before yesterday’s decision’”and therefore a disgrace to modern American capitalism. So, in this sense, there’s no particularly new news in the jury’s decision.

Interestingly, the stock markets rallied yesterday, as they did the day before, and as they are today (as of this posting).

On the whole, the state of American capitalism is pretty darn good.

Under assault ever since FDR’s mistaken central planning of the New Deal 1930’s, when a number of socialist type alphabet agencies attempted to control America’s industrial and farming sectors, people soon realized that the whole experiment was a dismal failure. Unemployment ran 20-25 percent up until World War II, when Roosevelt started unleashing business to produce wartime goods that ultimately resurrected the economy.

Long before, the Supreme Court had thrown out many of the counter-productive government planning as unconstitutional. But still, the American welfare state grew mightily in the 1960’s and 1970’s, as liberal Keynesians pushed for their version of socialism’”one which completely self-destructed in the 1970’s during the wealth-destroying, big government stagflation administered by LBJ, Nixon, Ford and Carter.

Providentially, Ronald Reagan changed all that with his economic revolution launched in the 1980’s. Reagan’s bold initiative fired up the U.S. economy by slashing tax rates, deregulating industries, and rescuing the dollar through disinflation.

Since then, as the forces of entrepreneurial capitalism were unleashed for the first time since the post Civil War period, the American economic system again became the envy of the world. Since the early 1980’s, over 46 million new jobs have been created, while inflation adjusted gross domestic product increased $6.2 trillion, or 120 percent.

As deregulated stock markets democratized the American financial system, a great new Investor Class grew up. Over the ensuing decades, roughly 20 million investors evolved into over 100 million share buyers, and they got rich in the process.

Since 1982, according to the Federal Reserve, stock market wealth owned by family households appreciated by over $9 trillion dollars, or nearly 900 percent. During this period, the Wilshire 5000 Index of virtually all actively traded companies, appreciated by nearly 800 percent.

This Investor Class has also become the nation’s most powerful voting block. In recent elections, nearly 2 out of every 3 voters were also stockowners (and yes, they are voting for capitalism) meaning votes for lower tax rates, limited government, greater opportunities for entrepreneurship, and a general distaste for any and all policies that smack of central planning and government economic controls.

The great failure of the Democratic Party during this entire period has been its consistent antipathy towards the Investor Class. Though I can’t prove it, I’m willing to bet that the cultural characteristics of hard work, thrift, personal responsibility and law-abiding behavior, go hand-in-hand with demand for lower tax rates and entrepreneurial activity.

George W. Bush, who calls this the ‘ownership class,’ is a lineal descendant of Reagan. The self-help virtue of ownership is held in much higher political and cultural esteem than the vice of government dependent welfarism.

And of course, the investor culture has at its core, the very same ethical foundation that Adam Smith wrote about in 1759, which includes the rule of law that was so badly violated by Messrs. Lay, Skilling and Fastow, along with some other rotten apples like Tyco’s Dennis Kozlowski, WorldCom’s Bernard Ebbers, and Adelphia’s John Rigas.

These selfish crooks disregarded morality and the law, and in so doing, temporarily demoralized the stock market and American capitalism. They’re the kind of people who would be celebrated by totalitarian socialists like a Marx, Engel, Lenin, Stalin, Mao, Castro, Saddam Hussein or Iran’s Ahmadinejad, people of that ilk’”enemies of America and our incredibly successful market based system of market capitalism.

Government prosecutors deserve three cheers for busting these anti-Americans as they work to reimpose the rule of law and remoralize our economic system.

Much more important than the misbegotten congressional regularity scheme called Sarbanes-Oxley, is the Justice Department’s excellent work to simply enforce laws already on the books. Hopefully, the thought of a 25-year jail sentence will concentrate the corporate mind with sufficient intensity to disincentivize future corporate crooks, wherever they may be.

There are approximately 5.5 million businesses in this country, according to the Commerce Department’s national accounts and tax returns administered by the IRS. So these notorious crooks on today’s front pages really do amount to a small basket of bad apples.

But the G-Men have more work to do. A new state of corporate fraud and insider self-dealing has sprung up recently in a number of technology and other companies where CEOs have engaged in the practice of backdating stock option grants and other related forms of anti-shareholder compensation chicanery. The biggest demoralizing miscreant right now appears to be William McGuire, CEO of United Health Group and McGuire’s $1.6 billion in unexercised stock options.

And in Washington, book cooking at the government company, Fanny Mae, has still not been properly punished. Clearly, there is still more work to do on the enforcement front, so necessary to plug some of the small glitches that will always be present in our huge free-market system.

But as I stated earlier, on the whole, the state of American capitalism is pretty darn good.

And, looking down from his perch in heaven, Adam Smith would be very proud.

Pages

Sign up for free NRO e-mails today:

Subscribe to National Review