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Non-Tech : The ENRON Scandal -- Ignore unavailable to you. Want to Upgrade?


To: Skywatcher who wrote (1583)1/29/2002 10:18:23 PM
From: Mephisto  Respond to of 5185
 
But Krugman is back! Hooray!



To: Skywatcher who wrote (1583)1/29/2002 10:18:55 PM
From: Mephisto  Respond to of 5185
 
The Great Divide
The New York Times
January 29, 2002

By PAUL KRUGMAN

It was a shocking event. With
incredible speed, our
perception of the world and of
ourselves changed. It seemed that
before we had lived in a kind of
blind innocence, with no sense of
the real dangers that lurked. Now
we had experienced a rude
awakening, which changed
everything.

No, I'm not talking about Sept. 11; I'm talking about the
Enron scandal.

One of the great clichés of the last few months was that
Sept. 11 changed everything. I never believed that. An
event changes everything only if it changes the way you
see yourself. And the terrorist attack couldn't do that,
because we were victims rather than perpetrators. Sept.
11 told us a lot about Wahhabism, but not much about
Americanism.

The Enron scandal, on the other hand, clearly was about
us. It told us things about ourselves that we probably
should have known, but had managed not to see. I predict
that in the years ahead Enron, not Sept. 11, will come to
be seen as the greater turning point in U.S. society.

Quite a few people have belittled the significance of the
Enron affair - not just Treasury Secretary Paul O'Neill,
with his unfortunate remark about how "companies come
and companies go," but commentators who don't think a
failed business is that much of a story. Think of it this
way: The business of most Americans is business, and
Enron already ranks as one of the biggest business
scandals in history. There have been other big, admired
companies that failed; there have been other companies
that turned out to be largely fraudulent. But I can't think
of another case in which the most admired company
turned out to be a fraud.


So even if the story turns out just to be about Enron, it
has been an object lesson in how appearances can
deceive. And I don't think this is just a story about one
company.

Before Enron collapsed, the economic story of the last few
years seemed more of a comedy than a tragedy. Yes, many
people lost money, but they did so because they were
foolish - they bought stock because they believed New
Age economic drivel, or because they thought William
Shatner made great ads.

Now the story looks vastly darker. People didn't deceive
themselves; they were deceived.

It's true that Enron got a lot of mileage out of the same
kind of new- economy jargon that fed the dot-com bubble
- for example, former C.E.O. Jeffrey Skilling liked to say
that the company was "virtually integrated."

But despite the high-tech veneer, the structure appeared
solid: Enron wasn't a profitless dot-com, run by crazy kids.
It seemed to be a company with a proven track record. Its
executives seemed to be smart but solid, personable men.
It seemed to be a company with a great work ethos, a
sense of mutual loyalty. Then it came apart at the seems.

So now what? At the moment, demands for reform are
scattershot and confused. Some people want new rules for
401(k) plans; some want new rules for accountants; some
want campaign finance reform; some want a return to
regulation. These seem like unrelated agendas, but I
think they have a common theme: They're all about
ending an era of laxity, in which nobody asked hard
questions as long as everything looked O.K. That era is
now over.

The political speculation right now focuses on who will
take the blame for what happened. I admit it: that's a very
interesting question. But I suspect that for those who are
not directly implicated - and most politicians won't be -
what will matter is not what they did but what they do. Do
they act as if they get it - that they understand that the
old laxity is no longer acceptable?

Clearly, Dick Cheney doesn't get it: He thinks, after all
that has happened, that we should just trust his
assurance that energy companies did not distort his
energy plan. Clearly, Harvey Pitt , chairman of the
Securities and Exchange Commission, doesn't get it: I
don't pretend to understand the institutional issues in
accounting reform, but everyone I know who does regards
his supposed reform plan as ludicrous. Clearly, Marc
Racicot
doesn't get it: He thinks that we should just trust
him when he says that he won't lobby as chairman of the
Republican National Committee, even though his former
lobbying firm will pay his salary.

Does Tom Daschle get it? Will George W. Bush get it? The
answers to those questions may well decide their, and the
country's, political future. Enron, I predict, will turn out to
have changed everything.

nytimes.com



To: Skywatcher who wrote (1583)1/30/2002 12:52:07 AM
From: Mephisto  Read Replies (1) | Respond to of 5185
 
Dubya's dream

This is the state of the union address George W
should have given to Congress last night - but didn't
dare


Jonathan Freedland
Guardian

Wednesday January 30, 2002

Last night George Bush gave his first State of the Union
address. Earlier aides revealed that, as of last Friday, White
House staff had prepared and discarded no fewer than 18 drafts.
One of them found its way into the hands of the Guardian...

My fellow Americans. That's how all these speeches begin, isn't
it? I watched my daddy say those words a hundred times. "My
fellow Americans." But guess what? I'm gonna vary it up a little.
How 'bout this: "My fellow Americans - and fellow citizens of the
world." What do you think of that? Pretty cool, huh?

In fact, that's a clue to what I want to say tonight. It may
surprisify a few of you, but here's the deal: I've decided to
transformation my presidency. From now on - and I want to
clarificate this so no one can be in any doubt - there's gonna be
a new George W Bush.

Why, I hear you ask. Surely this guy's riding so high he's got no
need to change! His approval rating's at 83%, he's won a foreign
war, the country is united like never before, the US press corps
are ready to kiss the Texan turf he walks on - why even that
once-commie Brit bastard, Christopher Hitchens, is in the fan
club! Why on earth would Dubya go changin'?

Well, I'm not stupid. OK, you don't have to give me a standing
ovation just for that. But I'm not stupid. Sure, I can't watch TV
and eat a savoury snack at the same time, but I'm no dumb-ass.
I can see there are clouds ahead, even now when the sun is
shining so brightly.

We got some economic problems, had 'em even before
September 11. But 9/11 cost us $639.3bn and 2m jobs. That's a
lot of dough and a lot of people. Even I can see that. It's true that
Alan Greenspan says the economy is showing signs of
recovery. But the forecasts also say if we keep spending like we
plan to - up 9% in the next budget - we're gonna get back in the
red. It'll be just like it was in Daddy's day, and Uncle Ronnie's
time before that: the era of big surpluses will be over, big deficits
will be back. That's how conservative I am: I'm turning the clock
back to the Reagan-Bush era!

Anyway, I know that when there are questions about the
economy there are questions about the president: Daddy taught
me that lesson, too. In the Bush household, we learned that
victorious war leaders can lose their jobs pretty damn quick. So
I can see those clouds out there. Enron ain't going away. In fact
Cheney and I have given the press another nostalgia trip by
citing "executive privilege" in our refusal to hand over key Enron
documents: the last Prez to do that was Dick Nixon, and we all
rememberise what happened to him!

I know I'm not invulnerable; we got some mid-terms in
November, Republicans could lose control of the House.

That's why I've chosen to give you a different kind of speech
tonight. It's gonna consist of three halves. First, the war on
terror.

My aides have already said I'm gonna talk about the pain of
September 11, the heroism of those firefighters - I'm gonna look
up at a few of them, sitting in the gallery, and acknowledge their
bravery - and I'm going to boast of our swift victory over the
evil-doers in Afghanistan. It's no surprise that I vow to continue
the war on al-Qaida and that I'm asking you, the Congress, to
give the Pentagon the massive spending increases they request
to fight that war.

But I want to go further. I want to recall the speech my good
friend Toby, the British guy, made last year, when he called not
just for a war on the evil ones, but a global effort to "heal the
world". At the time my guys here in Washington thought that
was sissy stuff. They laughed at Tommy Blair's pinko talk about
fairer trade rules and a new war on global poverty. But now I
reckon Tim's got a point.

I've also been listening to the speeches my predecessor has
been making. So what if no one else in America is paying
attention to Bill Clinton; I think he's making sense. It's true that
a child denied a clean glass of water today could grow up to be
the terrorist of tomorrow.


So tonight I want to announcerate a change in the way the
United States sees the rest of the world - whether it be Afghans,
Pakistanis or Grecians. I've decided we're gonna do our bit. Sure
we can win wars with our sheer, overwhelming might. But what if
we used our strength to prevent wars starting in the first place?

I 'm gonna take Colin Powell's advice and declare that the
captives held at Camp X-Ray are to be redesignated as
prisoners of war - with all the rights that entails. We've won the
war now: there's no point antagonising Muslim opinion further by
humiliating the folks in Guantanamo Bay.

In that same spirit, I'm seeing King Abdullah of Jordan on Friday.
I'm gonna tell him we're ready to get back involved in the search
for Middle East peace. I promised the Palestinians American
support for their own, viable state; it's about time I did something
about it. On Thursday I've got Chancellor Shro-, Shreo- - that
German guy - coming here. First time he visited, we had a row
about the Kyoto treaty. This time I'm gonna tell him, we're ready
to sign up once more.

Now the second half of my speech: "homeland security".
Everyone thinks I'm gonna ask for more money for the heroes
who protect us: police, firefighters, all those folks. You're damn
right. But I've been thinking. If public spending is right for things
like fighting terror, perhaps it's right for other things, too. Like
maybe people actually want governments to do things
individuals cannot do alone. Gee, I've just realised that's a
rejection of everything my family and my party have ever stood
for - but it sounds right!

And so to the third and final half of my address: the economy.
The advance spin was that I would restate my case for tax cuts.
Not gonna do it. If we cut taxes and jack up spending on
security, we're gonna have no money left for increases on
anything else - education, free medicine for the elderly, pension
reform. So I say read my lips: no more tax cuts.

While I'm at it, my advisers say I should avoid saying the word
Enron. But guess what: Enron, Enron, Enron. We should all
keep saying it, because that turkey is an ad for all that's wrong
in corporate America. At home they were hoodwinking the
stockmarkets and their own staff, abroad they were screwing up
the environment and breaking whole communities. They are
proof that we need a new climate of corporate responsibility. Not
just transparency, but tough regulation to make sure they do the
right thing. We can start by full disclosure of every document
connecting Enron to the White House.

To conclude, the state of our union is strong. But by pursuing
justice with the same vigour we pursue power, we could be even
stronger.

j.freedland@guardian.co.uk
guardian.co.uk