Arianna Huffington: "Sloshed." ...
Does Bush Have The Willpower To Cure Our National Hangover?
Filed July 18, 2002
Sloshed. Three sheets to the wind. One too many. That?s how the president is trying to explain away the avalanche of corporate corruption -- the billion dollar restatements, the endless stacks of cooked books, the sweetheart deals for corporate insiders -- as nothing more than the predictable result of a little too much economic hooch, the inevitable hangover from a decade-long corporate binge.
As always, Bush likes to keep things simple and down home. America got a little tipsy at the big Wall Street office party, and now all it has to do is down the congressional equivalent of Pepto-Bismol -- a hearty swig of some stomach-soothing reforms -- put an ice bag on its head and sleep it off. At least until after the mid-term elections.
The hangover theme is an interesting metaphor given the president's well-publicized background as a reformed party animal. After all, he's famously recounted how, on the morning after his 40th birthday party, following a night of boisterous, boozy celebration, he awoke with a killer hangover and suddenly knew what had to be done. He had to quit drinking. And he did. And if it was good for him, it?s good for America.
But apparently America's corporate hangover isn't killer enough for the president because he has steadfastly refused to swear off the corporate hard stuff. He?s still giving his boardroom buddies ample wiggle room to keep bellying up to the corruption bar. Or maybe he?s just a believer in the ?hair of the dog that bit you? school, where the best cure for drinking too much is a few more drinks.
If Bush were serious about sobering up corporate America, he would go cold turkey. That means, for starters: supporting the Sarbanes bill just passed by the Senate; authorizing the SEC to release all documents connected to his Harken deal; demanding the resignation of Harvey Pitt and Enron-tainted Secretary of the Army Thomas White; and coming out in favor of treating stock options as an expense, strict rules prohibiting conflicts of interest among stock analysts, and the elimination of loopholes allowing offshore tax havens.
Anything less than this is just half-stepping, like a problem drinker who promises not to hit the sauce until after sundown.
According to Secretary of Commerce Don Evans, a longtime Bush buddy, Bush's biggest problem in his drinking days was his inability to moderate his intake. "Once he got started," says Evans, "he couldn't shut it off. He didn't have the discipline."
He still doesn't. And neither does our reformaphobic Congress. They all know it's time for a full-scale intervention -- time to rehabilitate American business by shipping its CEOs off to greed detox. But they just can't bring themselves to do it because they are under the influence of their own powerful addiction: their dependence on massive doses of campaign cash. They are so blinded by the intoxicating buzz of big money that they can't think straight.
It's the reason transparent accounting of stock options -- which Alan Greenspan considers the most important reform, and which is championed by John McCain, Warren Buffett, and Coke -- was mugged and dumped in a congressional back alley before it could become part of the Senate reform bill. The corporate barflies who pick up our politicians? tab were damned if they were going to tolerate an early closing.
It was a bipartisan beating. First, Senate Majority Leader Tom Daschle, fresh from getting an earful from venture capitalist and big time Democratic Party donor John Doerr, pummeled McCain's attempt to force a vote on option reform. Then Sen. Phil Gramm -- a top recipient of big business donations -- used a procedural cudgel to bash Sen. Carl Levin's backdoor attempt to reintroduce the issue.
And like all junkies, both Daschle and Gramm were filled with hollow rationalizations for why, this time, they had to do it. Daschle claimed -- get this -- that he deep-sixed the stock option vote because Congress wasn't equipped to dictate the fine points of accounting regulations, even though they clearly have no problem deciding matters related to nuclear waste disposal and space exploration.
Gramm, meanwhile, fell back on the "concern for the little guy" excuse, arguing that forcing companies to expense stock options would endanger the ability of non-CEO types "to own a piece of America." Apparently Gramm believes that the only way to achieve the American dream is through deceit. And since the average value of stock options given to senior executives is $512,000, while those given to hourly workers is worth $8,000, I can only assume that the little guys Gramm is worried about are the same little guys he worried would be hurt by Congress' failure to repeal the estate tax.
Of course, the quid pro quo between our political leaders and their corporate overlords is what got us into this mess in the first place. Back in 1994, the Financial Accounting Standards Board was on the verge of ruling that stock options should be counted as expense. But then Congress, responding to a torrent of corporate pressure, flexed its muscle and forced the board to back down.
Then-Chairman of the SEC, Arthur Levitt, who has emerged as something of a white knight in this crisis, also buckled to political demands and urged the accounting regulators to cave in -- what he now calls the "biggest mistake" of his tenure. The bullying was spearheaded by Sen. Joe Lieberman, who proudly labels himself a ?pro-business Democrat? -- Washingtonspeak for ?I get a lot of money from bankers, brokers, and accountants.? Every night, hundreds of CEOs take the 6:15 from Grand Central to Lieberman?s home state, Connecticut, where they spend millions of those ill-accounted options dollars on goods, services, and politicians.
But have the addicts in Washington learned their lesson? Are they finally ready to sober up and do the right thing? Not if the crocked comments of Sen. Mike Enzi are any indication. Enzi, an accountant by training, expressed concern that expensing stock options might force companies to restate their earnings. "Restatements," he argues, "are part of what's making the market very upset right now." In other words, don't tell me the truth when the lies feel so much better. Give that man a Breathalyzer!
So we still have a long way to go. Indeed, it?s hard to see how we will ever get rid of this corporate hangover until we cure our politicians? unslakable thirst for campaign cash and their corporate masters? ?infectious greed.? It?s time to settle up the tab.
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