SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?


To: sylvester80 who wrote (7325)9/24/2002 5:20:06 PM
From: stockman_scott  Respond to of 89467
 
We had a 30% rally in the Nazdaq, from the July low into late August. Now we are back at the approximate July low.

Bear Markets are typified by short, sharp 'head fake type' rallies.

In Bull Markets, you make money by buying on the dips.

In Bear Markets, you sell on the rallies.



To: sylvester80 who wrote (7325)9/25/2002 2:32:50 PM
From: stockman_scott  Respond to of 89467
 
REGIONAL RELUCTANCE

By Shibley Telhami
Columnist
The San Jose Mercury News
Sun, Sep. 22, 2002

The international crisis over Iraq has changed drastically in just two weeks. After months of talk of unilateral American action against the government of Saddam Hussein, including a possible war to dislodge it from power, President Bush, in an important speech, took the issue to the United Nations. Within days, Iraq accepted the unconditional return of international arms inspectors.

Although the possibility of war with Iraq in the coming months remains high, these recent events have altered the calculations of the United States, Iraq, the Arab states and the United Nations. They have increased the chance of a broad international coalition for a possible war, in case Iraq defies international resolutions, while at the same time making such a coalition less likely if Iraq continues to cooperate.

And that has complicated matters for the Bush administration, which still wants a strong U.N. resolution holding out the threat of war, but is running into resistance from allies. Included in that group are Arab states that could be key to the U.S. ability to wage war, if it comes to that. Despite Vice President Dick Cheney's recent statement that ``moderates throughout the region would take heart'' at an Iraqi ``regime change,'' the strategic reluctance of Arab states to support an American-led war on Iraq should not be underestimated.

Arab countries did, in the end, reportedly prod Iraq to accept inspectors, and Saudi Arabia went so far as to say it might allow the United States to use bases there to launch a war if Iraq defied the United Nations. But the reality is that the leaders of those countries remain terrified of war. Arab leaders do fear Saddam, as the Bush administration has said. But they fear even more their own people's opposition, possible postwar chaos in Iraq and increased American power in the region.

The rapid-fire changes in the Iraq crisis started after influential GOP leaders -- including former Secretary of State James Baker -- urged U.N. involvement. Some congressional leaders also began pushing publicly for a multilateral approach. U.N. Secretary-General Kofi Annan increased the pressure when he warned, just before Bush was to address the United Nations, that there is no substitute for the legitimacy bestowed by the Security Council.

Political calculations

Speaking only one day after the emotional anniversary of the Sept. 11 horror, the president in turn challenged the United Nations to enforce its resolutions. Although he issued no ultimatum to Iraq, he clearly laid the ground for a new U.N. resolution in the coming weeks that would give such an ultimatum, backed by the threat of force.

The president's speech had an impact on the calculations of many members of the Security Council and others with special interest in the Iraq issue, such as the Arab states. The strongest case that the United States could make against Iraq was not that Iraq has weapons of mass destruction. Others in the international community have more advanced capabilities, including India, Pakistan and Israel. The difference is this: Iraq contracted to remove its weapons of mass destruction after its 1991 defeat, and was obligated to cooperate with U.N. inspectors and to implement U.N. resolutions.

By focusing this time on Baghdad's violation of these resolutions, President Bush succeeded in challenging the Security Council into action. But some of the countries that eventually lent the United States support may have acted not because the president convinced them Saddam was an immediate threat, but because they were frightened by the prospect of a unilateral American military campaign without the cover of international legitimacy.

While the United States stands to lose much international support if it acts alone, the authority of the United Nations would also be severely undermined.

In the days that followed President Bush's U.N. speech, the pressure on Iraq to accept the return of inspectors without delay mounted. Security Council members, such as France and Russia, which had been urging multilateral action to end the crisis, found it harder to resist introducing a new tough resolution that could lay the ground for possible war with Iraq. And Arab leaders, who had been universally opposed to a unilateral American campaign against Iraq, also felt they could not resist U.N.-mandated action. These changed positions, coupled with extensive diplomatic efforts to persuade Iraq to readmit inspectors quickly, may have convinced the government of Saddam Hussein that the tide was shifting.

Saddam then, last week, said the inspectors could come back unconditionally, and the surprise move led to almost immediate squabbling between America and its allies about whether any new resolutions were needed.

Regardless of the outcome of that debate in the coming weeks, it is important to understand that opposition in the Middle East to war with Iraq -- whether U.N.-sanctioned or not -- is widespread and is based on strategic and political calculations. Arab leaders worry above all about the possible disintegration of Iraq, or continued instability emanating from Iraq, and they do not find American assurances to the contrary credible. They see the task of maintaining Iraq's territorial integrity and preventing meddling by regional rivals as potentially overwhelming.

While most in Iraq may be happy to rid themselves of Saddam, others may not; no ruler governs alone, and many in the state's extensive power structure and the factions associated with them will be fearful if the government falls. The prospect of revenge by repressed segments of society will be high, and the factionalism that characterizes Iraqi society will most likely be accentuated.

The Kurds in the north will push for maximum autonomy, and the prospect of a Kurdish state would concern Turkey, which has its own large Kurdish population. The majority of Iraq's Shiites, meanwhile, would want friendly religious and cultural ties with Iran. That could clash with U.S. objectives of confronting Iran and add to Iraq's instability.

But Arab leaders' worries don't stop there. They also fear a sustained U.S. presence meant to prevent such chaos. If the United States commits to the deployment of the necessary military, political and economic resources to assure Iraq's stability, many of Iraq's neighbors, and others in the region, fear a possible American military and political dominance that would then include Iraq in a way that alters the strategic picture to their disadvantage.

Governments in the region generally favor preventing Iraq from becoming a nuclear power, especially under Saddam. Even gulf states such as the United Arab Emirates that fear Iran more than they fear Iraq and worry about weakening Iraq too much, support measures to limit Iraq's nuclear capabilities, including reinstating international monitors. But some of those same states also worry about overwhelming American power in the region (and in Syria's case, Israeli strategic dominance).

One of the biggest reasons for regional reluctance to support an American military effort to topple Iraq's government is concern for public opinion. Although states in the region remain very powerful in their domestic control, no state can fully ignore public sentiment in the era of the information revolution. What is the public sentiment in Arab countries?

First, most people don't understand that U.N. resolutions are the basis of the policy to prevent Iraq from acquiring weapons of mass destruction, so they see that policy as an American strategy intended to prevent only Arab states from acquiring such weapons.

Second, those who understand the role of U.N. resolutions raise questions about ``double standards'' in applying them, always with examples from the Arab-Israeli conflict. And they ask, in any case, why it is that the United States, not the United Nations, should make the ultimate decision authorizing a war.

Third, while some almost wish for an Arab country to have a nuclear deterrent, even if it is possessed by Saddam, most don't believe that it is likely. They see Iraq to be helpless, and see the entire focus on this issue as tactical, intended to justify America's desire to keep Iraq in a box, or to justify a possible war on it. This view has intensified in recent months, with the public in the region increasingly resentful of American policy, and seeing the United States as dominating the decisions at the United Nations.

Fourth, there is continued empathy with the suffering of Iraq's population and a prevailing assumption that U.N. sanctions, not the Iraqi government, are to blame.

Weighing interests

Ultimately, most states in the region do not see Iraq as currently posing a serious enough threat to them to warrant a war that could significantly alter the regional environment and present them with hard choices internally and externally. Certainly not all of Iraq's neighbors have the same calculations, and the interests of the members of the Gulf Cooperation Council -- including Saudi Arabia, Kuwait and the United Arab Emirates -- are different from those of Jordan, Turkey, Syria and Iran. And there are differences even within the GCC.

Most Arab states, however, see U.S. policy on this issue as being driven by domestic politics, or by strategic designs to consolidate American dominance or secure Israeli interests. The real issue is whether they have to accommodate the United States, because opposing U.S. actions could leave them at a disadvantage if war becomes inevitable. They expect the United States would inevitably score a military victory, and no one wants to be on the losing side.

Even if some Arab states ultimately decide that joining forces with the United States is in their best interest -- despite the risks -- we should have no illusions: Most states and publics in the region dread the prospect of war. If it is waged, they prefer that it has international cover, but they prefer that it not be waged at all.
__________________________________________________________

SHIBLEY TELHAMI is Anwar Sadat professor for peace and development at the University of Maryland and senior fellow at the Saban Center at the Brookings Institution. His newest book, ``The Stakes: America and the Middle East,'' will be published in November. He wrote this article for Perspective.

bayarea.com



To: sylvester80 who wrote (7325)9/25/2002 9:14:22 PM
From: stockman_scott  Respond to of 89467
 
John Bogle and Jeremy Siegel on the Stock Market and Corporate Reform

What will it take to restore public trust in corporate America? And what kind of stock market returns can today’s depressed investors expect over the next decade? John C. Bogle, retired founder of The Vanguard Group, suggests it will require a lot of work to get even the most modest results. Meanwhile, says Wharton finance professor Jeremy Siegel, the Federal Reserve missed an opportunity this week to cut interest rates and stimulate a stock market rally.

knowledge.wharton.upenn.edu

Bogle and Siegel on the Stock Market and Corporate Reform



What will it take to restore public trust in corporate America? And what kind of stock market returns can today’s depressed investors expect over the next decade? Ask John C. Bogle, retired founder of The Vanguard Group, and you get the impression it will take a lot of work to get even the most modest results.

It’s going to require major reform of executive compensation practices, corporate governance and accounting rules to get the public to trust public companies again, according to Bogle. But that doesn’t mean stocks will pick up where they left off two years ago. Stock investors will have to adjust to much lower returns than they enjoyed in the 1990s – perhaps an annual average of just 6-9%.

“There are just a few bad apples out there,” he said, referring to high-profile financial scandals. “But I believe the barrel is bad – the barrel with the apples is bad … I believe the corporate system, the financial system, generally is bad – is corrupt.”

Bogle, 72, has never been known for mincing his words.

In 1974, he founded Vanguard and served as chairman through 1997 and senior chairman through 1999, when he retired. Vanguard, the second largest mutual fund company, behind Fidelity, is best known for its extremely low management fees and index funds tied to indicators such as the Standard & Poor’s 500. Bogle’s view, which has been well supported by research over the past two decades, is that high trading costs, taxes and fees eat so deeply into the gains of actively managed funds that those funds rarely succeed in beating low-cost index funds. This view, and Bogle’s eagerness to express it to any audience, has long made Bogle the fund industry’s biggest gadfly.

Though retired from Vanguard, Bogle has hardly moved to the sidelines. In 2000 he founded the Bogle Financial Markets Research Center on Vanguard’s Valley Forge, PA campus. He has a busy speaking schedule, and is currently a member of The Conference Board’s Commission on Public Trust and Private Enterprise, formed this year to address issues arising from recent corporate scandals. Among the commission’s 12 high-profile members are Intel chairman Andrew S. Grove, former SEC chairman Arthur Levitt Jr. and former Fed chairman Paul A. Volcker.

On Sept. 17, the commission released the first of three planned reports on executive compensation, corporate governance and accounting. The first installment pinned much of the problem on the excessive use of qualified stock options, which give executives incentives to manipulate financial statements to boost stock prices. To discourage this, the commission recommended rule changes to require that options be carried as expenses. This would encourage companies to instead use performance-based options, which are already expensed.

The commission also said corporate directors’ compensation committees should hire their own executive compensation consultants rather than use consultants hired by CEOs. Finally, it said senior executives should be required to disclose in advance their plans to sell company stock; currently, those disclosures can come as long as 40 days after a sale.

“The light being shined on executive compensation – that was a good place to begin,” Bogle noted. “We want to get a much better link between how the executives do and the performance of their company, if you will, rather than the performance of the stock.”

Stock price, he said, “is not a good measure of executive performance at all,” adding that executives concerned about short-term price gains too often avoid making decisions that can improve their companies’ long-term health.

According to Bogle, treating all forms of options as expenses would encourage the use of performance based options. One type is profitable for the executive only if he meets certain revenue goals or satisfies other elements of a long-term corporate plan. Others might have strike prices well above the market price on the date the options are granted. Or the options might be exercisable only if the stock beats a market or industry average.

The reduced emphasis on dividends, Bogle pointed out, is partly attributable to the heavy use of qualified options. Dividends are of no value to an executive who holds options rather than actual shares. Consequently, it’s in his interest to see earnings reinvested in the company or used to buy back shares – techniques meant to boost share prices. A number of experts have argued recently that if companies were given incentives to distribute more of their profits as dividends, it would be more difficult to fudge financial reports. When a dividend check is sent, there must be cash on hand to back it.

Bogle said the changes recommended by the commission could also lead more companies to reward executives with restricted stock – shares that can be sold only after a set time has passed or some other goal has been met. Executives with a lot of money tied up in the stock have the same risk of loss borne by ordinary shareholders. Since there is no money tied up in an option, the option-rich executive is free of such downside risk.

The Fed: Behind the Curve?

“It didn’t surprise me, but I think it was a mistake.”

That’s Wharton finance professor Jeremy Siegel’s view of the Federal Reserve’s Sept. 24 decision to leave interest rates where they are, despite mounting evidence of economic weakness and plummeting stock prices. It would have been smarter to cut rates, said Siegel. “By not easing now, it means they are more likely to ease in the future … It’s another example of the Fed being a little behind the curve.”

Prior to the Fed’s afternoon announcement, Siegel had expected a rate cut that he believed would trigger a stock market rally. With stocks near or below lows set in July, and with housing and auto markets softening, it seemed clear that the economy needed stimulation, Siegel said. Anecdotal evidence suggests that while third-quarter financial results may not be too bad, the fourth quarter may be weaker, he added.

Siegel warned that if major stock indexes fall below the July lows, investors may decide the markets have not yet found a bottom. The psychological effect could then drive stocks down another 10% or 15%, he said. He stressed that he is not predicting this will happen, only that it could.

In announcing its decision to stand pat, the Fed’s Open Market committee reported that two of its 12 voting members had wanted an immediate rate cut. It is the first time in 10 years that two members have dissented in favor of easing, according to Siegel. “Obviously, there was a lot of discussion at that meeting,” he said, “but the majority was not willing to move with it … I thought they could have taken an insurance cut.”


Bogle’s view of the stock market is that future returns will depend almost entirely on the growth of corporate earnings. That’s quite a change from the past two decades, when the lion’s share of returns came from investor enthusiasm.

The S&P 500’s annual return averaged 17% from 1981 through 2001, Bogle said. Of that, however, eight percentage points a year was attributable to the rise in the price to earnings ratio from around 8 to about 30: In 1981, investors paid $8 for the right to share in $1 of earnings; by 2001 they were paying $30 for the same $1 in earnings.

This rise is purely attributable to investor emotion – the belief that future earnings would somehow rise enough to justify the high stock prices, or that investors would continue to be so excited by stocks that the P/E ratio would never return to its long-term average of around 15.

The other 9% in annual returns during this period came from an average dividend yield of 3.5% a year and stock price gains driven by annual earnings growth averaging 5.5%, he said. Today, dividend yield averages around 1.8% and earnings growth can be expected to continue at its historic level of around 6%, Bogle said. That would produce an annual return just shy of 8%.

The other component of the 1981-2001 return – rising P/E ratios driven by investor enthusiasm – is unlikely to return anytime soon, Bogle predicted. On the contrary, investors are more likely to have a negative view of stocks for some time, reducing this “speculative” or emotion-driven portion of return, to zero – or perhaps less, if investors drive the P/E below its current level of around 20 or 22.

Bogle said he believes a P/E level of around 18 should be considered normal today, despite the historic average of 15. Many experts say slightly higher P/Es are justified during periods of low interest rates.

Indeed, this issue is made more complex by the growing uncertainty over just what should be included in a proper earnings figure. If investors cannot trust earnings statements, or can’t settle on what should be included in the calculation, it’s difficult to accurately measure the P/E ratio. “We are in an environment where prospective [stock] returns are very low,” Bogle said. He is comfortable, he added, predicting stock market returns of 6-9% over the next decade, which actually makes stocks a desirable investment next to their chief competitor, bonds. The 10-year Treasury currently yields less than 4%.

“If I were to tell investors anything, I would say don’t just think about the possibilities of return … Consider the consequences of loss,” Bogle said. “If you can’t stand a loss, you should not own any stock, period.”



To: sylvester80 who wrote (7325)9/26/2002 12:32:53 PM
From: stockman_scott  Respond to of 89467
 
IS IT TIME TO INVADE ... GERMANY?

Op/Ed
By Richard Reeves
Syndicated Columnist
Wed Sep 25,10:02 PM ET
story.news.yahoo.com

WASHINGTON -- The United States, as you may have noticed, is in the business of "regime change," a kind of sacred duty to eliminate leaders of other countries who are not with us -- which means, according to President Bush ( news - web sites), they are against us.



That decided, the question becomes, Do we take the time and inconvenience of doing things such as going to the United Nations ( news - web sites) and organizing multinational coalitions? Or should we just move unilaterally and get rid of people who we don't like or who just won't do what they're told?

I am speaking of Germany, of course, which is a more complicated problem than, say, Iraq. Regime change in Iraq is just getting rid of Saddam Hussein ( news - web sites) and finding the Thomas Jefferson of Baghdad. In Germany, we may have to get rid of tens of millions of voters who defied our warnings and re-elected Chancellor Gerhard Schroeder and his Social Democrats.

Schroeder and his ilk were returned to power in Berlin after (perhaps because) he said the United States must be nuts to want to invade Iraq -- and good Germans should have nothing to with that. The Bush administration responded with its usual superpower humility and grace by having Secretary of Defense Donald Rumsfeld refuse to meet with German officials. In fact, Rumsfeld, meeting with other North Atlantic Treaty Organization defense ministers in Warsaw, proclaimed that if the alliance did not support American demands for a rapid deployment force based in Europe, then NATO ( news - web sites) would become "irrelevant."

Who would that force be used against rapidly? Maybe Germany, huh? National Security Adviser Condoleezza Rice ( news - web sites) has declared that Schroeder's campaign (and his voters) "poisoned" American-German relations. If that leads to cruise missiles over Berlin, we would be careful, I'm sure, to try to avoid collateral damage to the property and persons of Germans who had the sense to vote Christian Democrat last week.

"Irrelevant" is a big word these days in Washington. The United Nations is irrelevant if it does not do things our way. Al Gore ( news - web sites), the fellow who got more votes than Bush in the last American election, was officially declared irrelevant by presidential spokesman Ari Fleischer ( news - web sites) because the former vice president said the war drums along the Potomac were too loud. Also irrelevant, I have been told, are suggestions that Saddam Hussein may not have been involved in the Sept. 11 attacks on New York and Washington.

Truth be told, Schroeder is a pretty slippery guy who stayed in office, barely, with some clever American-bashing. But politics is politics. And democracy is democracy, even if one does not always like what voters do.

The irony here is that the Social Democrats' campaign is the model of the campaign being run now by President Bush's Republicans. With German unemployment of roughly 10 percent and economic growth near zero, it seemed that the country's voters were on the verge of changing their own regime, throwing out Schroeder in favor of Christian Democrat Edmund Stoiber. But Schroeder, rather cynically, cranked up the anti-Americanism usually under the European surface to divert attention from the country's growing economic problems during his stewardship.

Republicans are running the same campaign in the midterm congressional elections, with the only difference being that they are pushing for war in Iraq to divert attention from lesser economic problems and greater corporate corruption problems in the United States. Front-page headlines in last Wednesday's Washington Post included these:

"Poverty Rises, Income Falls," on top of a paragraph directing readers inside the paper.

"In President's Speeches, Iraq Dominates, Economy Fades," that one running across four columns under a large photograph of Britain's Tony Blair ( news - web sites), governor of the 51st state, saying Bush is right about everything.
Meanwhile, mention of America's new robber barons doesn't even make front pages anymore. The Post, however, did find room to note that Bush's deputy interior secretary, J. Steven Griles, formerly a lobbyist for energy and mining companies, has been holding regular meetings with his old clients. "Just social," said Griles. Irrelevant.

President Bush, meet Chancellor Schroeder. It takes one to know one.
______________________________________________________

RICHARD REEVES, author of President Nixon: Alone in the White House (October 2001), is a writer and syndicated columnist who has made a number of award-winning documentary films. His ninth book, President Kennedy: Profile of Power — now considered the authoritative work on the 35th president — won several national awards and was named the Best Non-Fiction Book of 1993 by Time. His other best selling books include Convention and American Journey: Travelling with Tocqueville in Search of American Democracy.

Recipient of the 1998 Lifetime Achievement Award from the National Society of Newspaper Columnists, Reeves writes a twice-weekly column that appears in more than 100 newspapers. He is a former chief political correspondent for The New York Times and has written extensively for numerous magazines, including The New Yorker, The New York Times Magazine, Esquire and New York.



To: sylvester80 who wrote (7325)10/11/2002 9:14:41 AM
From: stockman_scott  Respond to of 89467
 
8:52am 10/11/02 [NT] NORTEL NETWORKS AFFIRMS Q3 REVENUE OUTLOOK

8:52am 10/11/02 [NT] NORTEL: CASH PERFORMANCE CONTINUES TO BE 'STRONG'

8:52am 10/11/02 [NT] NORTEL PEGS Q3 REVENUE AT $2.36 BLN

8:52am 10/11/02 [NT] NORTEL DEVELOPING $2.4 BLN OR LOWER BREAKEVEN MODEL



To: sylvester80 who wrote (7325)10/11/2002 10:01:03 AM
From: stockman_scott  Respond to of 89467
 
HOW THE WAR ON TERRORISM IS SHRINKING CONGRESSIONAL POWERS

By JOHN W. DEAN
Columnist
FindLaw
Friday, Oct. 11, 2002

[This is Part One of a two-part series by Dean on threats to Congressional power from the White House and the Supreme Court during the war on terrorism. Part Two will appear on this site on October 25. - Ed.]

Not since Richard Nixon's presidency have the powers of Congress been in greater jeopardy. Not only is the Bush White House seeking to expand presidential powers at the expense of Congress, but the conservative gang of five on the U.S. Supreme Court are busy trimming Congressional powers directly.

The Bush-Cheney efforts, along with those of the Rehnquist-Scalia-Thomas-O'Connor-Kennedy bloc, are raw power politics and an example of short-sighted decisionmaking. These efforts certainly raise the stakes for the November 5 Congressional elections.

These moves to curb Congressional authority also raise the question why. In Part One of this two part-series, I will look at the threat to Congressional power posed by the Bush White House; then, in Part Two, I will turn to the threat posed by the Supreme Court.

The Man Behind The White House Power Plays

Clearly, Vice President Dick Cheney is the force behind the White House's effort to enhance presidential power, and limit the powers of those on Capitol Hill. This is evident because President Bush simply does not possess the mental acumen, or experience, to play the game his White House has instituted; but Cheney does. This is not to say Bush doesn't embrace the undertaking, for he obviously does, but simply that Cheney is almost certainly the moving force behind it.

Indeed, Cheney has all but admitted the point. "In thirty-four years, I have repeatedly seen an erosion of the powers and the ability of the president of the United States to do his job," Cheney told ABC's "This Week" in late January.

His reference to "thirty-four years" is quite clear. About thirty-four years ago, in 1969, Dick Cheney joined the Nixon Administration - serving in a number of positions at the Cost of Living Council, and later the Office of Economic Opportunity. When Nixon was forced from office, Cheney helped Vice President Ford make the transition to the Oval Office and in 1975, Cheney became President Ford's White House chief of staff.

Cheney's reference to the erosion of presidential powers thus appears to relate to the Nixon presidency and Watergate, and then to the Reagan presidency and Iran-Contra. Accordingly, one might at first wonder if he was referring to the Independent Counsel Law. But that law has expired. So while no law eroded presidential powers more, nor made it more difficult for the president to do his job, that the Independent Counsel law, that law cannot be Cheney's target.

Nixon's Treatment Of Congress, and How It Likely Informed Cheney's Views

What then is Cheney's target? History suggests that it is probably what he sees as the expansion of Congressional power vis-a-vis the President. Besides the folly of the Independent Counsel law, this perception is probably what bothers Cheney most - and what he would most like to remedy.

Cheney watched Nixon "throw down a gauntlet to Congress, the bureaucracy, the media, and the Washington establishment and challenge them to epic battle" - to quote the disgraced former president's memoirs. But for Watergate, Nixon would have succeeded.

Then-Speaker of the House Carl Albert, a Democrat, pleaded with Congress to halt Nixon's "accelerating usurpation of power by the Executive branch . . . these wholesale executive invasions of legislative powers and responsibilities." He claimed the Republican President was creating a Constitutional crisis by ignoring a Democratic Congress. Senate Majority Leader Mike Mansfield (D-MT) shared this concern, stating that "the people have not chosen to be governed by one branch of government alone."

Nixon was ignoring Congress in four areas. First, he refused to spend money the Congress had appropriated for programs he didn't believe in, simply impounding the money. Second, he ignored Congress's efforts to get him to cut back or end the war in Vietnam, often increasing and widening the war when they were in recess.

Third, he regularly invoked executive privilege, thus denying Congress information it sought as aid in its job of conducting oversight of the Executive Branch. Fourth, finally, and in what was probably his most offensive act of the four, Nixon implemented a total reorganization of the Executive Branch by executive order. The result was to give Congress no say over departments and agencies that had years earlier been created by Congress.

Erosion Of Presidential Powers: Congress Takes Back Power Post-Watergate

Congress's anger at Nixon's chutzpah on stilts was one reason it so enthusiastically launched its investigation of Watergate. Congress exploited Nixon's vulnerability in self-defense. Had Nixon not crippled himself as President by overtly and criminally abusing his powers, it is doubtful Congress would have been able to regain its own powers, which had been earlier weakened by Nixon.

But with Nixon on the ropes, Congress passed new laws restoring the balance, while pursuing a series of oversight investigation of the Executive Branch that pried loose the governments best-kept secrets.

For example, Congress ultimately surfaced information that even Nixon had been unable to obtain from the CIA - the "family jewels" which included the bungled efforts to assassinate Fidel Castro.

Numerous New Laws Restore Congress's Powers

No new law was more important than the Congressional Budget and Impoundment Control Act of 1974, which Nixon was forced to sign (knowing his veto would be overridden) a month before leaving office. This law put Congress on an equal footing with the Executive branch in making budgetary decisions, and preventing a president from refusing to spend as directed by Congress.

Also - overriding Nixon's veto - Congress passed its War Powers Resolution, which was designed to force presidents to seek Congressional approval before for sending American troops to do battle. This law, which presidents dislike, reminds them that the Constitution gives Congress exclusive power to declare war (a point they have often ignored, but that still stands, as I have discussed in depth in an earlier column).

When the Watergate Special Prosecutor took Nixon to court with a very narrow subpoena seeking his secret Oval Office tapes of conversations with his aides about Watergate, the Supreme Court used the opportunity to write the law of executive privilege. It ruled against Nixon, and forced his resignation.

Afterwards, Congress proceeded to simply take all Nixon's tapes from him. That prevented any claim of privilege and precluded Nixon's ability to destroy them and the historical record. Congress also enacted a law that presidential papers belong to the American people.

Finally, Congress passed the Independent Counsel Law in the aftermath of Watergate. Through that now-expired law, Congress was able to instigate its own criminal investigations and prosecutions of high level Executive Department officials. Only because the law seriously gored the oxen of both Democratic and Republican administrations did Congress let it die.

After Watergate, Congress moved from its lowest power point back to a more normal posture vis-a-vis the Executive Branch. These laws represent the "erosion" of presidential powers that Cheney has witnessed, from both ends of Pennsylvania Avenue. In truth, they are more accurately described as a "restoration" of power previously stolen by Nixon from Congress.

Cheney's Criticism of the Iran-Contra Investigation

When Dick Cheney was a member of Congress, the Iran Contra scandal erupted. During the scandal, it should be recalled, Cheney became President Reagan's principal defender in Congress.

Cheney served as a minority member of the special Iran Contra Congressional committee investigating the violation by the Reagan administration of the laws prohibiting sale of weapons to Nicaraguan rebels. In 1987, the committee issued its final report - charging the Reagan administration with "secrecy, deception and disdain for law." But Cheney dissented.

In a telling rebuke, Cheney criticized the administration for letting Congress exert control over Central American policy, and banning the sale of weapons to Nicaraguan rebels.

Plainly, Cheney thinks presidents should not only execute the laws, but write them as they wish they had been. Never mind that Congress has passed a law the President has not vetoed, or as to which his veto was overrided. It is still up to him whether to abide by that law, Cheney seems to believe.

Cheney's Current Tactic: Block Congressional Information Requests

Cheney's drive to halt what he perceives as an erosion of presidential power has been most apparent in his effort to block Congress from obtaining information about Executive Branch activities.

Cheney is forcing the Government Accounting Office to go to Court to obtain even the most minimal information about the work of the Energy Task Force, forcing an unprecedented lawsuit which is currently pending. (I discussed the suit in depth in a prior column.) But this is only the most visible of Cheney's efforts; after all, he is a man who prefers to work behind the scenes.

I'm told by Washington journalists and scholars who daily seek information from the Executive Branch as part of their jobs and research, that making GAO file a lawsuit is merely the tip of the iceberg. Far more broadly, Cheney seeks to place a blanket freeze on information.

For example, provisions have been added to the USA PATRIOT Act, and appropriations legislation, that in effect create an unofficial "official secrets act." (An official version of such an Act was vetoed by President Clinton.)

Meanwhile, Cheney only extends his cheek in downplaying his own aggressiveness in creating a blanket of secrecy. It is the information-seekers themselves, according to the Administration, who are the aggressive ones. Thus, Dana Milbank of The Washington Post recently reported that "n the fight over the energy documents, the Bush administration has made an ... argument that it is the victim." And the Vice President's lawyer is taking the position that Congress does not even have authority to institute legal action against the Vice President or President.

If GAO loses its lawsuit, that will virtually put Congress out of the business of oversight over the Executive Branch. (And even if it wins, Cheney will have successfully delayed disclosure.)

A court loss for GAO thus will mean that there are no real checks whatsoever on the President or Vice President - for it is impossible for Congress, or the public, to exercise oversight over that of which it is not even aware. Such a judicial decision may provoke as serious a constitutional crisis as Watergate - thought this time the federal judiciary, not the President, would be at fault.

While I can't imagine such a decision being issued, I couldn't have imagined Bush v. Gore ahead of time either.

Cheney's Effort To Rearrange Government Is Misguided

My first reaction to Cheney's efforts to block access to his Energy Taskforce information was that he must want to hide the fact that the energy industry had virtually written the Bush administration's energy policy. By now, however, everyone knows that happened, so it is obvious there is something far more significant in play.

Cheney's efforts to block access to information appears more strategic than tactical. By that I mean Cheney is not fighting only a single, specific battle (to protect Energy Taskforce information). Rather, he has launched a war on Congress (forget the Energy Taskforce, Congress has no power to even request such information in the first place).

Cheney apparently wants to turn the clock back to the days of the Nixon administration, before Watergate, when Nixon sought to make Congress merely another administrative arm of the presidency.

Of course, because such a power shift would be strikingly Nixonian doesn't automatically mean it is evil. Not everything Nixon did was illegal, nor done without the public good in mind. But doing anything with Nixon as a model, or precedent, calls for the closest scrutiny, for Nixon had little respect for the mechanic of government.

Indeed, one of the reasons Nixon was attracted to foreign policy was that an American president is largely free from domestic constraints when he steps on the world stage. Nixon preferred unilateral decisionmaking, both on the domestic and international stages.

There is no question that Congress makes life difficult, sooner or later, for every president. Powerful arguments can be made that we have become what is, in essence, an administrative state, with the people selecting a new top administrator every four years. That may lead one to ask: Why not give the top administrator all the power and authority necessary so that he can most effectively administer the nation's affairs? This seems at the core of Cheney's contention.

Why Dramatic Expansion of Executive Power Is Profoundly Unconstitutional

Clearly Cheney wants greater powers for the presidency. There is only one problem, and it is spelled out in those sheets of parchment where the Framers laid out our system of government. They rejected monarchy, even a temporary king or queen. (George Washington had no interest in being a King.)

They also rejected even a single-branch system of democratic government, insisted on the checks and balances of two legislative houses and an independent judiciary. Our government derives its power from the people. That power is shared at federal, state and local levels, and further divided within branches at every level.

The men who designed this government did not have efficiency in mind. To the contrary, they divided the powers of government to make certain no one had too much power. They knew the cost would be delay, negotiation, and compromise, but they believed the expense modest for insurance against tyranny.

Cheney Opposes Even Limits on Presidential Power Meant to Curb Misconduct

Congressional and Executive power sharing has ebbed and flowed since the nation's founding. We have had periods when the Congress dominated, like that following the Civil War. Similarly, there have been times when the Executive dominated, as during the presidencies of Lincoln, Teddy Roosevelt, Woodrow Wilson and Franklin Roosevelt.

The erosions of presidential power that concern Cheney have all arisen from misconduct and abuses of power by the presidents involved: Nixon, Reagan, Bush and Clinton. That hardly makes a compelling basis for their restoration.

From this observer's point of view, Cheney's efforts are unnecessary. If anything, it is the presidency that has become too powerful. It is also misguided as a matter of political strategy. History shows that every time a modern president reaches for more power at the expense of Congress it ultimately raises Congressional ire. This brings inevitable repercussions, sooner or later.

Rather than the President's getting more done, he actually gets less accomplished. And given the fluke that put the Bush administration in power, Cheney hardly has a mandate for realigning power in Washington.

In Part Two of this series, I will continue this examination of efforts to reduce Congressional powers - this time focusing on limits imposed by the Supreme Court.

--------------------------------------------------------------------------------

John Dean, a FindLaw columnist, is a former Counsel to the President of the United States.

writ.news.findlaw.com



To: sylvester80 who wrote (7325)10/15/2002 4:08:28 AM
From: stockman_scott  Respond to of 89467
 
Still Living Dangerously

By PAUL KRUGMAN
Columnist
The New York Times
October 15, 2002

A smart terrorist understands that he is not engaged in conventional warfare. Instead he kills to call attention to his cause, to radicalize moderates, to disrupt the lives and livelihoods of those who would prefer not to be involved, to provoke his opponents into actions that drive more people into his camp.

In case you haven't noticed, the people running Al Qaeda are smart. Saturday's bombing in Bali, presumably carried out by a group connected to Al Qaeda, was monstrously evil. It was also, I'm sorry to say, very clever. And it reinforces the sinking feeling that our leaders, who seem determined to have themselves a conventional war, are playing right into the terrorists' hands.

Indonesia, the world's most populous Muslim country, has not been a major breeding ground for terrorists. It is, however, a nation with severe economic, social and political problems — the kind of problems that could radicalize the population and turn it into a terrorist asset. And Saturday's bombing was clearly an attempt to intensify those problems.

To understand why the attack was so clever, you need to appreciate Indonesia's fragility. Five years ago the country became the biggest victim of the Asian financial crisis. When inflows of foreign capital dried up, the economy's modern core imploded; big companies that had borrowed overseas found that their debts had ballooned to unpayable levels.

What saved Indonesia from complete economic collapse, and made a partial recovery possible, was the resilience of the country's economic and geographical periphery. The big companies on Java were devastated by the plunge in the rupiah, but smaller enterprises, especially on the other islands, saw the weak currency as an export opportunity. That included, in particular, the tourist industry of Bali, which has flourished in post-crisis Indonesia as an affordable destination for foreigners.

Now who will vacation on Bali? Indonesian officials are putting a brave face on it, assuring tourists that they are still safe, insisting that the economy can handle the blow. But it seems all too likely that the bombing has effectively destroyed one of the country's key industries. And given the already wobbly economy and the already weak authority of the government, a serious setback might set the stage for social and political turmoil — maybe with an ethnic and religious edge. For Indonesia is an overwhelmingly Muslim country in which a small ethnic Chinese minority, mainly Buddhist or Christian, dominates the economy.

In short, the people who set off that bomb knew what they were doing.

The bomb blast in Bali followed bad news from the world's second-most-populous Muslim country. Hard-line Islamic parties did unexpectedly well in Pakistan's election last week, and Pervez Musharraf's hold on power may be slipping. Do I need to point out that Pakistan is a lot bigger than Iraq, and already has nuclear weapons?

And that gets to my worries over the direction of U.S. policy. I don't think we could have done anything to prevent the blast in Bali — but the attack does suggest that our early military success in Afghanistan has done little to weaken terrorist capabilities. It's not clear whether the U.S. could have done anything to improve the situation in Pakistan, though it might have helped if we had done a better job in Afghanistan, both in pursuing our foes and in helping our friends; it might also have helped if the administration had made good on its promise to let Pakistan increase its textile exports to the U.S. .

What's clear is that the biggest terrorist threat we face is that one or more big Muslim countries will be radicalized. And yet that's a threat hawks advising the administration don't seem to take seriously. The administration adviser Richard Perle, quoted by Josh Marshall in The Washington Monthly, brushes off concerns that an invasion of Iraq might undermine the stability of Middle Eastern regimes: "Mubarak is no great shakes. Surely we can do better. . . ."

Meanwhile, plans to invade Iraq proceed. The administration has offered many different explanations, some of them mutually contradictory, for its determination to occupy Baghdad. I think it's like the man who looks for his keys on the sidewalk, even though he dropped them in a nearby alley, because he can see better under the streetlight. These guys want to fight a conventional war; since Al Qaeda won't oblige, they'll attack someone else who will. And watching from the alley, the terrorists are pleased.

nytimes.com