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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (142904)	2/23/2002 3:11:44 PM
From: TimF	Read Replies (2) \| Respond to of 1577019

Exploiting Enron Washington draws the wrong lesson. By NR Editors, from the February 25, 2002, issue of National Review February 12, 20021, 8:00 a.m. Of all the lessons that might be drawn from the story of Enron's tangled accounts and bankruptcy, perhaps the oddest is that it is imperative to ban political ads. Yet that is the lesson that Washington is drawing. The Enron scandal is said to make passage of the McCain-Feingold bill urgent. One of the bill's major provisions would prohibit groups from running ads that mention candidates in the 60 days before an election. What this has to do with Enron is anyone's guess. But the scandal has indeed brought the legislation closer to enactment than ever before. It's not clear that Enron's political influence had as profound and baleful an impact as the campaign-finance "reformers" believe. All its influence did not prevent the company from going under, or even get the Bush administration to lift a finger as it sank. True, Bush took some positions that served Enron's interests — championing energy deregulation, for example — but he did so out of conviction rather than a desire to curry favor with Enron. For the same reason, Clinton "sided with Enron" on global warming (the company thought it could profit from a treaty against it, while Clinton backed the treaty for ideological reasons). Even if the reformers were correct in identifying Enron's influence-buying as a grave problem, their legislation would hardly solve it. They see donations by Enron executives as a form of influence-buying by the company. Yet McCain-Feingold, at least in the version passed by the Senate last spring, actually raises the amount individuals are allowed to donate to candidates. That liberalization is the result of an amendment to the bill and is, in our view, a good thing: That politicians spend too much time raising money is a legitimate complaint, and they spend so much time on it precisely because current law forces them to raise money in small increments. But under the law the reformers are now demanding, Enron executives would have been able to donate more to politicians and thus — by the reformers' own standards — the company would have had more influence. The Enron scandal, in short, does not strengthen the substantive case for McCain-Feingold. Nor should nervous congressmen conclude that Enron makes it politically imperative to support it. Polls always find that most people "support campaign-finance reform," but also that they do not care much about the issue. Nobody wins or loses elections on the issue. There is no reason to think any of that has changed just because the media have been hyping Enron's bankruptcy as a political scandal. In any case, a congressman's duty is to the Constitution, not the polls. That duty cannot be delegated to the courts; a congressman must judge the constitutionality of a bill and vote accordingly. The ban on election advertising strikes at the core of the First Amendment's guarantee of free speech. Congressmen have sufficient reason to vote down McCain-Feingold on that basis alone — and if they fail in their duty, President Bush will have sufficient reason to veto it. nationalreview.com

To: TimF who wrote (142904)	2/24/2002 8:50:24 PM
From: tejek	Read Replies (2) \| Respond to of 1577019

Enron Explained Cutting through the hype. By Ramesh Ponnuru, NR Senior Editor From the February 25, 2002, issue of National Review. It's now clear that this company was never as big as it seemed. It was, to a large extent, an illusion built on hype, accounting tricks, and outright fraud. Our eyes have now been opened. Or have they? The generally accepted story of Enron's demise — the scandal of Enron — is almost equally overblown. Like the company itself, the scandal is largely built on hype, accounting tricks, and fraud. No amount of hyperbole is being spared in discussions of the impact of Enron's fall. David Broder says that almost everyone is worrying about his pension now. Paul Krugman writes that it's a bigger deal than September 11 because it "told us things about ourselves that we...had managed not to see." Jonathan Alter calls Enron "a cancer on capitalism." Even the normally unflappable George Will sees a "systemic crisis of capitalism." Reforms are said to be necessary "to keep this from happening again." It's almost always left unclear what "this" is that can't be allowed to recur. Presumably it's not that an energy company went bankrupt in the middle of a recession and a downdraft in energy prices. True, it wasn't just any bankruptcy: Enron was the seventh-largest company in the country, and was found to be cooking its books. But it was the book-cooking that made it look so large in the first place. Michael Lynch of Reason, one of the few reporters on the Enron beat not to have succumbed to hysteria, notes that the company that was auditing Enron, Arthur Andersen, had more employees. Nobody lost electrical power. Kmart's bankruptcy was more consequential economically. Tim, here is the kind of a National Review article, pushing its bias, that I talked about previously. The author says in the first paragraph that ENE "was never as big as it seemed". Huh? was my first reaction. Further down, he admits that ENE was the 7th largest company in the US. So then, I guess the author thinks the ENE problems have been as serious as the mainstream media says only if the company were the size of a GE, or the number one company if GE isn't it? I don't think so. Then, he says the seriousness of the crime is overhyped. Again, I reacted with a.... Huh? Not only did the company cook its books in a fairly clever way but it got one of the largest accounting firms, the respected Arthur Anderson, to buy off on it. So either A. Anderson was fooled in some very devious way......very scary!! Or A. Anderson, the supposedly independent auditor that we all depend on to tell us the truth about a company, was bought off.........very, very scary!!! And its looking more and more like the latter was the true situation. Not only did this collusion/deception bring down the 7th largest company in the US and hurt many individual shareholders/employees but it threatens to hurt the current presidency............one has to wonder if that isn't the real purpose of the article.......to minimize the extent and size of the problem in order to thwart any criticism and divert it away from the presidency. In other words, its National Review's politics as usual. But whatever Ramesh's motivation is, what happened at and to ENE easily can happen again, and that's what has this country's investors very scared. Adding fuel to the fire are admissions like IBM's that they treated the income from last quarter's asset sale as operating income instead of calling it a one time gain, claiming that they are in the business of selling assets on an ongoing basis. Not necessarily illegal but pushing the boundaries of accounting law into not so virgin territory. So, I am sorry Mr. Ponnnuru but I think that its a real problem and I suspect, as D. Ray has hinted, that in the near future, there will be some major changes to at least the accounting profession. BTW congrats, Tim, on your good luck........I suspect you are making a nice chunk of change on the Northrup bid for TRW!! ted

To: TimF who wrote (142904)	2/25/2002 1:47:02 AM
From: Mani1	Read Replies (2) \| Respond to of 1577019

Tim, I strongly disagree with the article. I believe that Enron situation is a crime and collusion of historic proportion. One of the biggest companies in the world and darling of wall street was created on fraud and fictitious circumstances. Enron was a highly a visible public company that fraud and fooled investors, politicians and analysts. Worse yet, a big five accounting firm supported and helped to hide their crimes. All this happened under the watchful eyes of SEC and it came crashing down in matter of few months. I think it is highly irresponsible of the article to down play an action that undermines the financial stability of all public companies and thus our economy. For any company, its owners need to know if the company is fictitious or real. Till now we thought a big accounting firm and SEC keeps them honest, Enron proved that is far from the truth. Are GE, Tyco and QCOM real companies? Will they be bankrupt by summer time? These questions were ridiculous 6 months ago but Enron debacle made these questions valid. Very scary! Mani