Bush vows to stop fraud wrecking economy

President Bush again vowed yesterday that high-level fraud will not be allowed to tarnish America's free enterprise system. Sensing that the corporate scandals enveloping Wall Street could send the US economy back into recession - seriously damaging both his presidency and Republican hopes for the mid-term elections in November.

But even as he was coming round from anaesthetic following a routine colonoscopy, his enemies were seeking to tie the scandals to his administration, as well as the growing perception that American capitalism is a game rigged for the benefit of the few.

Senate Majority Leader Thomas A. Daschle, Bush's potential opponent in 2004, attacked Bush's record on the economy and accused him of being the most 'political' chief executive in history.

'His record on the economy is a disaster. I think his record on fiscal policy is a disaster,' Daschle said. 'He promised to change the tone in Washington, and I think he has: it's every bit as confrontational as it was.'

Despite his 70 per cent approval rating, Democrats sense that the multiple failures of Bush's administration - in the economy, in the stalled war on terrorism, and alienating foreign governments on issues from the Middle East to trade - could provide them with considerable leverage.

But Bush's opponents believe the Wall Street scandals have the most potential to hurt him. Although neither the Enron or WorldCom debacles have been criminally tied to the White House, the permissive atmosphere of corporate America is seen as Republican-sponsored.

But the attempt to focus on corrupt chief executives for all the trouble on Wall Street is far from convincing. New York's mayor Michael Bloomberg yesterday pointed out that although emerging frauds and misdirections by big business should be punished under law, the millions of individual investors who bought into the greed of the 1990s were also culpable.

'People who were buying stocks in the stock market at multiples that never made any sense should look at themselves in the mirror,' said Bloomberg, who made a fortune in financial information service. 'They're as responsible, I think, as those who actually committed the crimes of mis-stating earnings and fudging the numbers.'