• Choose a category
• All
• Classic-Fiction

By Root 359 0

regulation (because regulation is bad).* Energy derivatives were just then becoming one of Enron’s most profitable lines. According to Robert Bryce’s book on Enron, Pipe Dreams, this key piece of deregulation is what allowed Enron to become a giant in the derivatives business. The exemption not only prevented federal oversight, exempting the companies from the CFTC’s authority, it even exempted them if the contracts they were selling were designed to defraud or mislead buyers. Five weeks later Enron announced it was hiring Mrs. Gramm as a member of the Enron board, a job that eventually paid her about $1 million in salary, attendance fees, stock-option sales, and dividends. Senator Phil Gramm’s Banking Reform Act formally repealed the long-standing prohibition (which grew out of the stock crash of ’29) against merging banks, brokerage houses, and insurance companies. Then the IRS was emasculated by Gingrich Republicans on the grounds that collecting taxes is tantamount to fascism.

The whole dizzying array of corporate clout-wielders in Washington—powerful lobbyists who leave no fingerprints on curious little exemptions and special provisions that apply to only one company—gets larger and more brazen by the year.

George W. Bush didn’t invent any of this. His role is to pretty much embody it. He is what people mean when they speak of “crony capitalism.” His administration is what we mean by the cliché “setting the fox to guard the hen coop.” (Raccoons are actually far more dangerous to chickens—take our word for it.) Bush is not motivated by greed—he honestly believes government should be an adjunct of corporate America and that we’ll all be better off if it is. Thus his role has been to build upon, to extend, to exaggerate, to further privatize, to cheerlead for, to evangelize about all that the free-marketeers have been preaching over the years.

The odd thing about Bush at midterm is that most of the Washington press corps has yet to recognize just how extreme his ideology is. As governor of Texas he tried to privatize the state welfare system and considered privatizing the University of Texas; he fought for “voluntary compliance” with environmental regulations. With the power of large corporations in this country already grossly disproportionate because of their influence over politicians through money, government is the last effective check on corporate greed. To put a man in charge of the government who basically doesn’t believe it should play a role is folly.

The tragedy of having him in office at this time is that the man is congenitally incapable of checking the excesses of capitalism. No sooner was the Sarbanes bill passed than Bush’s man at the SEC, Harvey Pitt, busily began undermining it. Pitt’s claim to the title of biggest raccoon in the henhouse is rivaled only by the perfectly ludicrous appointment Bush made to the board assigned to implement the new McCain-Feingold campaign-finance reforms—a man vehemently opposed to campaign-finance reform. There are contenders at Interior, Labor, and EPA as well, but Pitt probably deserves the prize. Pitt wanted to appoint Judge William Webster to head the new accounting firm oversight board set up by the Sarbanes bill. Webster turned out to have corporate conflicts of interest out the wazoo, and Pitt himself was fired as a result. However, he remained on the job and by January 2003 had managed to actually weaken the rules that had been in effect before the corporate scandals broke. So many fundamental reforms have not been addressed—the failure to count stock options as a business expense, which gives CEOs an incentive to run up stock prices with tricky accounting; out-of-control hedge funds; derivatives; directors with conflicts of interest; the list goes on. Less than nothing has been done about any of it, so one can guarantee this whole corporate-fraud fiasco is going to happen again.

George W. Bush should declare himself a conscientious objector in his own war on corporate crime.

2.

Julia Jeffcoat’s Jobless Recovery

When America works, America prospers.