The Year in Review—July

The Nation | Top news stories for July, 2002 | Bob Jones

Fraud, failure, and the free-fall

For much of July, the economy managed to push terrorism off the front page of many American newspapers. Telecom giant WorldCom filed for Chapter 11 bankruptcy, eclipsing the Enron filing of 2002 as the biggest U.S. bankruptcy case ever. On Capitol Hill, lawmakers scrambled to make sure no more big American companies would disappear as a result of "accounting irregularities." Following earlier action by the House, the Senate unanimously passed a bill stripping the accounting industry of its self-policing powers and establishing instead an independent regulatory board under the auspices of the Securities and Exchange Commission.

That did little to reassure rattled investors, however. The Dow Jones Industrial Average went into free-fall, closing below the 8000 mark for the first time in four years. With stocks shedding an estimated $8 trillion in value since 2000, Democrats talked openly of a voter backlash in November, despite continued high marks for President Bush's handling of foreign affairs.