Business as Usual
"
Almost all of those ex-C.E.O.'s in the administration became wealthy
thanks to the connections they had acquired in Washington; the exception
is Mr. Bush himself, who became wealthy thanks to the connections
his father had acquired in Washington.
This process continues. Senator PHIL GRAMM, who pushed through
legislation that exempted Enron's trading practices from regulation while
his WIFE sat on the company's board, is retiring and taking a new job:
he's going to UBS Warburg, the company that bought Enron's trading operation.
Somehow, crusaders against business abuse don't get similar offers."
The New York Times
October 22, 2002
By PAUL KRUGMAN
The mood among business lobbyists, according to a jubilant official
at the Heritage Foundation,
is one of "optimism, bordering on giddiness."
They expect the elections on Nov. 5 to put Republicans in control
of all three branches of government, and have their wish lists ready. "It's the
domestic equivalent of planning for postwar Iraq," says the official.
The White House also apparently expects Christmas in November.
In fact, it is so confident that it has already given business lobbyists
the gift they want most: an end to all this nonsense about corporate reform.
Back in July George W. Bush declared, "Corporate misdeeds will be found and will
be punished," touting a new law that "authorizes new funding for investigators
and technology at the Securities and Exchange Commission to
uncover wrongdoing." But that was then; don't you know there's a war on?
The first big step in undermining reform came when Harvey Pitt,
chairman of the S.E.C., backtracked on plans to appoint a strong and independent
figure to head a new accounting oversight board.
But that was only a prelude. The S.E.C. has been underfunded for years,
and most observers - including Richard Breeden, who headed the agency
when Mr. Bush's father was president - thought that even the budget Mr. Bush signed
back in July was seriously inadequate. But now the
administration wants to cancel most of the "new funding" Mr. Bush boasted about.
Administration officials claim that the S.E.C. can still do its job with a much
smaller budget. But the S.E.C. is ludicrously underfinanced: staff
lawyers and accountants are paid half what they could get in the private sector,
usually find themselves heavily outnumbered by the legal
departments of the companies they investigate, and often must
do their own typing and copying. Officials say there are investigations that they
should pursue but can't for lack of resources. And the new law expands the
S.E.C.'s responsibilities.
So what's going on? Here's a parallel. Since 1995 Congress has
systematically forced the Internal Revenue Service to shrink its operations; the
number of auditors has fallen by 28 percent. Yet it's clear that giving the I.R.S.
more money would actually reduce the federal budget deficit; the
agency estimates that it loses at least $30 billion a year in uncollected taxes,
mainly because high-income taxpayers believe they can get away
with tax evasion. So starving the I.R.S. isn't about saving money, it's about
protecting affluent tax cheats.
Similarly, top officials don't really believe that the S.E.C. can do its job
with less money; the whole point is to prevent the agency from doing its job.
In retrospect, it's hard to see why anyone believed that our current leadership
was serious about corporate reform. To an extent unprecedented in
recent history, this is a government of, by and for corporate insiders.
I'm not just talking about influence, I'm talking about personal career
experience. The Bush administration contains more former C.E.O.'s
than any previous administration, but as James Surowiecki put it in The New
Yorker, "Almost none of the C.E.O.'s on the Bush team headed competitive,
entrepreneurial businesses." Instead they come out of a world of "crony
capitalism, in which whom you know is more important than what you do and
how you do it." Why would they turn their backs on that world?
And don't forget the personal incentives. Almost all of
those ex-C.E.O.'s in the administration became wealthy thanks to the connections
they had acquired in Washington; the exception is Mr. Bush himself, who became
wealthy thanks to the connections his father had acquired in Washington.
This process continues. Senator Phil Gramm, who pushed through legislation
that exempted Enron's trading practices from regulation while his
wife sat on the company's board, is retiring and taking a new job:
he's going to UBS Warburg, the company that bought Enron's trading operation.
Somehow, crusaders against business abuse don't get similar offers.
The bottom line is that you shouldn't worry about those TV images
of men in suits doing the perp walk. That was for public consumption; now that
the public is focused on other things, it's back to business - insider business - as usual.
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