City: Unconvinced by President Perot

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AS THE American presidential election looms, support for Ross Perot, the billionaire adventurer who has come from nowhere to take the lead in the opinion polls, shows no sign of waning. Nearly all the pundits had Mr Perot down as a phenomenon as transitory as summer snow - a one- day wonder who would melt away as rapidly as he arrived. When push comes to shove, they said, few voters will in practice put their name to a man with no policies and no party.

The pundits may still be right. For summer snow, however, Mr Perot has so far proved pretty resilient. Big business and the financial markets are being forced to sit up and take notice. According to a Wall Street Journal/ NCB poll published last week, Mr Perot continues to be favoured by 33 per cent of registered voters. That's 2 percentage points more than President George Bush and a full 5 percentage points ahead of Bill Clinton. Mr Perot is also streets ahead of his opponents in terms of voters who regard him negatively, despite the lambasting he has received in the US press over the past month. For a man said to have no credible policies, Mr Perot scores handsomely when it comes to specifics. Some 37 per cent of voters said he was the best man to handle the economy, compared with only 16 per cent for both Mr Bush and Mr Clinton.

Unfortunately for Mr Perot, Wall Street does not share this view. Nor does the traditional American business establishment. Not to put too fine a point on it, the prospect of a Perot victory scares them rigid. Fortune magazine recently conducted a survey of American chief executive officers which showed that while the vast majority thought businessmen made good presidents, they had severe doubts when it came to this particular businessman. Only one in 10 said they would vote for him. Many thought Mr Perot would be an absolute disaster. Their biggest concern remains just what Mr Perot stands for. With any politician it is rarely possible to predict with much certainty what you are going to get in practice. With Mr Perot it's at least 10 times as bad; his public face is to be all things to all men, the very worst type of political operator as far as multinational business is concerned. You just have no idea what he is going to do.

What little is known about Mr Perot's policies appears to be mainly negative for big business and Wall Street. From what one can tell he's a protectionist; he stands for fortress America, economically and in terms of foreign policy. He's also a militarist. That might provide some temporary respite for the US's hard- pressed defence industry, but it hardly squares with his stated aim of drastic cuts in the budget deficit.

Mr Perot plans to address this particular thorn through higher taxes on the super-rich - such as himself one presumes - and by making big efficiency gains in public spending. Wall Street is not convinced. Taxing the rich might look good cosmetically, but it'll be a mere drop in the ocean as far as the burgeoning deficit is concerned. The same is true of efficiency drives. In practice the massive cost-cutting gains businessmen believe are there for the taking in the public sector simply don't exist or prove virtually impossible to implement.

Mr Perot, of course, never belonged to the business establishment in the US and owes no allegiance to it. He is the self-made, authoritarian, entrepreneurial type of businessman; more akin to a Sir James Goldsmith than a Sir Denys Henderson. He lasted only a few years with General Motors, to which he sold his company, EDS. He just could not live with its federal, bureaucratic structure. And he famously wrote of American chief executives: 'These CEOs wandering around with their blow-dried hair, their dollars 3,000 suits and their 23-year-old trophy wives'. To Mr Perot, their views count for nothing. If he gets into the White House, they cannot expect much in the way of favours.

On Wall Street, Mr Perot has at least a few supporters. Alan 'Ace' Greenberg, chief executive of Bear Stearns, has known him for years and reckons he is 'brilliant'. But most regard him with extreme scepticism. As we approach the election, the Perot phenomenon is becoming a serious influence on stock prices. Like the London market in the six-month run-up to our own general election, Wall Street has become becalmed, bewitched by politics, the polls, and economic uncertainty. It's busy going nowhere.

Few pundits expect Mr Perot to win outright. But he may yet deprive Mr Bush of enough support to let Mr Clinton in by the back door. There's a strong possibility that, with no outright winner, the election would have to be resolved in the House of Representatives. That means the US would be without a president from November through to January - more drift, more uncertainty. Whichever way you come at it, the outlook for Wall Street over the next six months seems bleak.