[Nettime-bold] NYTimes: "The current crisis in American capitalism "

[martha rosler <navva@earthlink.net>]

>Reply-To: navva@earthlink.net
>From: navva@earthlink.net
>To: navva@earthlink.net
>Subject: NYTimes.com Article: The Insider Game
>Date: Fri, 12 Jul 2002 17:20:10 -0400 (EDT)

>The Insider Game
>July 12, 2002
>By PAUL KRUGMAN
>
>The current crisis in American capitalism isn't just about
>the specific details - about tricky accounting, stock
>options, loans to executives, and so on. It's about the way
>the game has been rigged on behalf of insiders.
>
>And the Bush administration is full of such insiders.
>That's why President Bush cannot get away with merely
>rhetorical opposition to executive wrongdoers. To give the
>most extreme example (so far), how can we take his
>moralizing seriously when Thomas White - whose division of
>Enron generated $500 million in phony profits, and who sold
>$12 million in stock just before the company collapsed - is
>still secretary of the Army?
>
>Yet everything Mr. Bush has said and done lately shows that
>he doesn't get it. Asked about the Aloha Petroleum deal at
>his former company Harken Energy - in which big profits
>were recorded on a sale that was paid for by the company
>itself, a transaction that obviously had no meaning except
>as a way to inflate reported earnings - he responded,
>"There was an honest difference of opinion. . . . sometimes
>things aren't exactly black-and-white when it comes to
>accounting procedures."
>
>And he still opposes both reforms that would reduce the
>incentives for corporate scams, such as requiring companies
>to count executive stock options against profits, and
>reforms that would make it harder to carry out such scams,
>such as not allowing accountants to take consulting fees
>from the same firms they audit.
>
>The closest thing to a substantive proposal in Mr. Bush's
>tough-talking, nearly content-free speech on Tuesday was
>his call for extra punishment for executives convicted of
>fraud. But that's an empty threat. In reality, top
>executives rarely get charged with crimes; not a single
>indictment has yet been brought in the Enron affair, and
>even "Chainsaw Al" Dunlap, a serial book-cooker, faces only
>a civil suit. And they almost never get convicted.
>Accounting issues are technical enough to confuse many
>juries; expensive lawyers make the most of that confusion;
>and if all else fails, big-name executives have friends in
>high places who protect them.
>
>In this as in so much of the corporate governance issue,
>the current wave of scandal is prefigured by President
>Bush's own history.
>
>An aside: Some pundits have tried to dismiss questions
>about Mr. Bush's business career as unfair - it was long
>ago, and hence irrelevant. Yet many of these same pundits
>thought it was perfectly appropriate to spend seven years
>and $70 million investigating a failed land deal that was
>even further in Bill Clinton's past. And if they want
>something more recent, how about reporting on the story of
>Mr. Bush's extraordinarily lucrative investment in the
>Texas Rangers, which became so profitable because of a
>highly incestuous web of public policy and private deals?
>As in the case of Harken, no hard work is necessary; Joe
>Conason laid it all out in Harper's almost two years ago.
>
>But the Harken story still has more to teach us, because
>the S.E.C. investigation into Mr. Bush's stock sale is a
>perfect illustration of why his tough talk won't scare
>well-connected malefactors.
>
>Mr. Bush claims that he was "vetted" by the S.E.C. In fact,
>the agency's investigation was peculiarly perfunctory. It
>somehow decided that Mr. Bush's perfectly timed stock sale
>did not reflect inside information without interviewing
>him, or any other members of Harken's board. Maybe top
>officials at the S.E.C. felt they already knew enough about
>Mr. Bush: his father, the president, had appointed a good
>friend as S.E.C. chairman. And the general counsel, who
>would normally make decisions about legal action, had
>previously been George W. Bush's personal lawyer - he
>negotiated the purchase of the Texas Rangers. I am not
>making this up.
>
>Most corporate wrongdoers won't be quite as well connected
>as the young Mr. Bush; but like him, they will expect, and
>probably receive, kid-glove treatment. In an interesting
>parallel, today's S.E.C., which claims to be investigating
>the highly questionable accounting at Halliburton that
>turned a loss into a reported profit, has yet to interview
>the C.E.O. at the time - Dick Cheney.
>
>The bottom line is that in the last week any hopes you
>might have had that Mr. Bush would make a break from his
>past and champion desperately needed corporate reform have
>been dashed. Mr. Bush is not a real reformer; he just plays
>one on TV.
>
>http://www.nytimes.com/2002/07/12/opinion/12KRUG.html?ex=1027508810&ei=1&en=9ac
>b84172ab22526


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