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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: J_F_Shepard who wrote (389821)	4/10/2003 9:58:07 PM
From: DuckTapeSunroof	Read Replies (2) \| Respond to of 769670

Bubbles - if they get out of hand, as they always seem to - will pop. Recessions brought about by bubbles (while more uncommon than 'normal' business cycle recessions) are (historically) sharp and deep... and sometimes very long lasting. If one is unfortunate to have them coincide with with a business cycle recession (as we seem to have now), that, too, can increase the severity of the recession. The thing to do is to try to not interfere with normal market actions - because such interference can make things much worse - but at the same time try to promote an honest and transparent legal and accounting and tax system. THOSE are the ways to promote stable growth. But - people being people - if you leave barn-sized loopholes in the rules... they WILL be taken advantage of. That is what went wrong: Clinton's SEC Chairman Authur Levitt... and Alan Greenspan... and Clinton's Treasury head Rubin tried very hard to enact commonsense accounting reforms: 1) bans on consulting contracts with the same audit customer, 2) mandate that stock options grants be expensed on a company's public books [which would show the public that the stock had been watered, and the P/E raised!] or the company can't call it an 'expense' when they look for the tax deduction. But - after a hard, multi-year fight with various industry lobbyists and various Plutocrats who were starting to get rich by manipulating the loophole during the tech boom... A handful of Senators and Congressmen from both Parties (Lieberman, Dodd, DeLay, Armey, Breaux, etc.) killed the reform effort. If the rules had been tightened, as Levitt and Greenspan argued for, then there never would have been a seriously destructive bubble. The final topper that kicked the bubble into over-drive was the Fed during the Y2K scare. They pumped MASSIVE amounts of liquidity into the system to head off any 'panic'... but this was right when there was already a problem with valuations because of all the accounting games. That's all she wrote, at that point, collapse was only a matter of time. The questions remaining are: Will the rules be fixed? And, will the crony-capitalists who created the mess (the fraudsters and the politicians in their pockets, who enabled the theft from the taxpayers) get away with it... like they usually do?