Daily Kos
Political analysis and other daily rants on the state of the nation








































































Monday | August 12, 2002

O'Neil: There's no recession!

In the latest installment of "Talk Up The Economy", treasury secretary O'Neil promises the economy won't fall back into another recession.

But, here's the kicker -- the economy won't recover at full speed unless, among other things, Congress makes last year's tax cuts permanent. Is it any wonder no one respects the man?

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Tuesday | July 23, 2002

Much ado about nothing

The blogosphere has erupted over a possible Enron/Robert Rubin connenction. (Rubin was Clinton's guy at Treasury.) The jist of the story is that Citigroup helped facilitate Andersen's and Enron's frauds. A month (or more) later, Rubin joined Citigroup as Chairman of its Executive Committee.

Somehow, this is suddenly going to turn the corporate governance issue on its head, implicating Democrats as well as Republicans.

Huh? This misses several points.

  1. No one knows who Robert Rubin is. Heck, there are Americans who don't know who the Secretary of State is, or the Speaker of the House. Tell them Rubin was involved in the Enron fiasco (of which there is no evidence), and all you would get is a blank stare and a disinterested shrug.

  2. Bush's and the GOP's political troubles have little to do with Enron. Or Harken. Or Halliburton. Or WorldCom. Or any of the other crooked companies driving down the stock market. The GOP faces pressure from the collective weight of the scandals. Any single company, on its own, doesn't merit a blip on the political radar screen. When dozens of companies fess up to corrupt business practices, dragging down the markets as a result -- then it's a political liability. Republicans have been the proud part of business for years. Now they reap what they sowed.

  3. Fair or not, the president gets blame or credit for the economy (notwithstanding GOP efforts to claim credit for the 90's boom). People are losing their savings, their retirement funds, their jobs. Who are they going to blame? Some guy Rubin no one ever heard of before, or the president who callously dismisses their pain:
'I believe people have taken a step back and asked, 'What's important in life?' You know, the bottom line and this corporate America stuff, is that important? Or is serving your neighbor, loving your neighbor like you'd like to be loved yourself.
(Of course, if the GOP takes credit for the 90's boom, how can it now blame Clinton for the current scandals and economic collapse?)
Anywan, if the right hopes to tar Dems with the same sleaze dripping from their own, they will have to work a lot harder than this.

For more on this issue:

National Review Online: Joe Lieberman’s Cover-Up. Where is Robert Rubin?

Andrew Sullivan: What did Rubin know?

Counterspincentral: here and here

Ted Barlow

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Wednesday | July 17, 2002

Conservatives ganging up on Bush

Sure, there are Coulter-type conservatives that will blindly defend Bush to the end of their days. But, there has been clear and growing unease amongst many intellectual conservatives, displaying a laudable lack of hypocrisy.

Two examples today:

The Weekly Standard's Christopher Caldwell writes:

For decades now, the "small government" Republican Party has been slamming the corrupt conduct of, say, trial lawyers who just suck money out of the economy and put it in their pockets in the name of the ideal of "representing the little guy." When they talk this way, I’m all ears. But, Jesus, this [corporate corruption] is what they have to offer in its place?
Caldwell then speculates on the mysterious buyer of Bush's Harken shares, guessing it might be Saudis with ties to the Bin Laden family.

The National Review's Byron York rehashes one of his 1999 articles examining Bush's business record in great detail:

Far more than tales of youthful drinking and carousing, the record of Bush's rise to wealth reveals how he became what he is today. It's a complicated tale of family connections, hard work, and sweet deals, topped off by a taxpayer-subsidized baseball bonanza that may leave some Republicans feeling queasy about how their candidate got rich.
The article takes a critical look at Bush's business dealings, even if it does use the words "Bush" and "hard work" in the same sentence.

These writers are critical, in large part, because they think Bush is harming the conservative cause. Bush has boosted the size of government, his crony capitalistic ways is harming the case for unregulated capitalism, etc. But some of that criticism is principled outrage at Bush's lack of character. These writers gave Clinton hell, and are now admirably reluctant to give Bush a pass.

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Tuesday | July 16, 2002

Can they fix Wall Street?

From Newsweek:

A 51-percent majority of Americans think that President Bush and Vice President Dick Cheney’s former business background makes them better able to deal with the corporate scandals and help them develop policies to reduce corporate wrongdoing. But 38 percent say their pasts make them less likely to support the kinds of policies needed to deal with the scandals and reduce corporate wrongdoing.
Isn't arguing that Bush and Cheney's business background qualifies them to fix the mess on Wall Street kind of like saying Clinton's, ahem, "experiences" qualifies him to promote abstinence?

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Monday | July 15, 2002

Markets slide, political repercussions

As we see the markets shrug off Bush's lame defense of the economy and undergo its sixth day of relentless pummeling, articles like this one bear watching.

An increasing number of Americans have a stake in the stock market via stocks, mutual funds, and 401(k)s, and market performace, like never before, now has direct political repercussions. The fact that the current crash (yeah, I consider a near-10 percent drop in a week a "crash") can be directly linked to Bush's half-assed "reform" proposals further highlights the link. And there are real electoral dangers, considering that 70 percent of voters in 2000 were also investors.

Despite GOP efforts to blame Clinton for the crisis, it's clear that the public identifies Republicans with Big Business. And, so long as the markets maintain their downward spiral, they have the most to lose.

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Friday | July 12, 2002

Dems take aim against deregulation

The always excellent Nathan Newman has unearthed this gem of a report on GOP's deregulation efforts throughout the 90's. Written by the Democratic Party, the report offers a comprehensive look at the GOP's relentless crusade against all business regulations. And, as Nathan writes:

[I]t shows the political will of the Dems to move from single issue criticism of the financial debacles to a full-out assault on deregulation across the board-- from rightwing assaults on the environment to corporate tax giveaways.

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Thursday | July 11, 2002

Cheney LOVES Arthur Andersen

Cheney lauded Arthur Andersen in a promotion video, which the BBC helpfully provides here. In that video, Cheney makes the increasingly infamous quote:

I get good advice, if you will, from their people, based upon how we are doing business and how we are operating, over and above the normal, by-the-books auditing arrangement.
As we all know now, there was definitely more going on at Andersen than "by-the-books auditing".

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Wednesday | July 10, 2002

Bush got sweet deal on loans

In his sad little speech Tuesday, Bush "challenged" corporations to prohibit low-cost loans to directors. Well, with Bush it's 'been there, done that'. Turns out Bush received $180,375 in low-cost loans from Harken when he was a director. Bush didn't have to pay the principal for 8 years, and was charged only 5 percent annual interest.

So now we have insider trading, improper (though not illegal) loans, and approval of sham transactions. And though Bush claims (falsely) that the SEC fully vetted his actions and cleared him, the White House is refusing to release either SEC documents on the investigation, or corporate documents from Bush's Harken tenure (such as corporate minutes).

Thank God for the subpoena-issuing powers of committee chairmen, huh? Time for the Dems in the Senate to get cracking!

As for the markets, it's anyone's guess when the current downward spiral will end. The markets have taken a 600-point hit through Wednesday this week. So much for Republicans being good for the markets. In fact, Bush's presidency has yielded the sharpest market declines since Richard Nixon (another Republican!).

Republicans are trying to blame Clinton, of course. But Clinton wasn't president when Harken engaged in Bush-sanctioned shenanigans, and the argument is getting little respect outside of Dittohead territory.

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Dow continues downward spiral

As I write this, the Dow is hovering just above the 9,000 mark, further reinforcing the notion that Bush's speech was a disaster. Meant to reassure investors, Bush accomplished the exact opposite. Investors saw his calls for industry self-regulation as inadequate, and punished the markets (and Bush by extension) as a result.

Bush's insistance that the crisis was caused by a few crooked CEOs bellies the fact that the whole system is corrupt, and in need of serious reform. Rove must be beside himself right now. This isn't a matter of spin. You can't laud a speech, and claim the reforms will be successful, if the target audience repudiates you in such dramatic fashion.

And, as the Dow declines, companies will be more reluctant to spend on capital improvements or higher and larger payrolls, further entrenching the current recession. All roads to economic recovery start at Wall Street, and with a weakening housing market, and the Dow in the 8,000s, things could get nasty for the GOP.

Judicial Watch, the big thorn on the Clinton Administration's side, has probably become an even bigger thorn on the Bush Administration's side. They announced an accounting fraud lawsuit against Halliburton and Cheney. From a legal standpoint, this isn't that big of a deal. I count over 20 such lawsuits filed thus far. They will all get consolidated, including Judicial Watch's effort. However, the filing is significant because Judicial Watch gets media attention. Those other lawsuits were filed in near anonymity, while Judicial Watch's gets top-of-the-fold attention.

But the biggest treat this morning was Maureen Dowd's latest column. She just gets better and better:

Can a Bush — born on third base but thinking he hit a triple — ever really understand the problems of the guys in the bleachers?

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Monday | July 08, 2002

Time to exhume the body?

While the president's men have hit the airwaves in defense of Bush's Harken dealings, this article obliterates their arguments. I mean, it grinds those arguments into the mud and then spits on them. A must-read.

    11:16 PM | Link | Comments (0) | Email this post | Trackback (0)


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Eve of the speech

I will have plenty to say on Bush's corporate responsibility speech tomorrow. However, this story on the eve of the speech has some real gems.

For starters, we finally, we have a skeptical White House corps.

"All I can tell you is that in the corporate world, sometimes things aren't exactly black and white when it comes to accounting procedures," Bush said in defending Harken. The company announced larger losses after the SEC determined that it had counted future income prematurely; Harken had sold a subsidiary, Aloha Petroleum, in 1989 through a seller-financed loan that it declared as a cash gain, masking huge losses.

Bush, who appeared irritated by the questioning, glared at reporters in the White House briefing room when he heard titters after that answer. "There was an honest difference of opinion as to how to account for a complicated transaction," he said. "And you're going to find that in different corporations. Sometimes the rules aren't as specific as -- as one would expect, and therefore the accountants and the auditors make a decision."

"Titters"? The press was laughing at Bush's lame excuses. In Bush's world, selling a company's subsidiary to itself, then claiming the sale price as profit, is not clearly wrong.

No wonder the press laughed in his face.

So now he is irritated. Rove and his cohorts better do some serious work with Bush. Because if he's irritated on day 1 of the scandal, what's going to happen after he hears the same questions week after week after week? The press smells blood. And the more he shows irritation, the more the press will, er, press (pun definitely not intended!).

What else? Bush also says some of the current corporate scandals may be "victims of honest disagreements". Just like his insider trading was just an honest disagreement, as was booking profits from a sham sale.

Yet, he then waxes poetic about restoring investor confidence:

I'm very worried about a country that has -- could conceivably lose confidence in the free enterprise system [...] I also understand how tender the free enterprise system can be. If people lose confidence in the system, it'd be hard to attract capital into markets, and that's one reason I've reacted so steadily against what I have seen.
The reason people are losing faith in the system is that CEO sharks, like Bush himself, don't see anything wrong with crooked transactions. They think those transactions are accounting disagreements, not the lies and deception they truly are. So he can blame Democrats, he can claim 'honest disagreements', and he can pretend that only a handful of CEOs are to blame. But that won't restore market confidence for one reason -- investors know it's all a lie.

One final thing. Will someone please explain to me how can a free enterprise system be 'tender'?

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Wednesday | July 03, 2002

Corporate scandals reach Bush

Paul Krugman's latest column has ignited a political firestorm that may well inform the outcome of the 2002 elections.

Krugman chronicles the story of Harken Energy, which is like a 'mini-me' version of Enron. Back in the mid-80's, Bush ran a failing energy company called Spectrum 7. Despite being a money-losing venture, the company was bought by Harken Energy for $2 million. Harken's CEO admitted he bought Spectrum 7 only to get Bush on his company's board of directors.

Harken was also losing money, but hid its loses by including profits from the sale of a subsidiary, Aloha Petroleum. Who bought Aloha? Harken insiders who financed the purchase through a loan from, who else, Harken. The SEC ruled the transaction was illegal, and forced Harken to restate its profits.

But here's the kicker:

[L]ong before that ruling -- though only a few weeks before bad news that could not be concealed caused Harken's shares to tumble -- Mr. Bush sold off two-thirds of his stake, for $848,000. Just for the record, that's about four times bigger than the sale that has Martha Stewart in hot water. Oddly, though the law requires prompt disclosure of insider sales, he neglected to inform the S.E.C. about this transaction until 34 weeks had passed. An internal S.E.C. memorandum concluded that he had broken the law, but no charges were filed. This, everyone insists, had nothing to do with the fact that his father was president.
Ironically, the Harken Energy story was first reported back in early March by the Wall Street Journal. The Center for Public Integrity ran a more in-depth analysis of the deals, along with a great timeline in early April. But it was Krugman's column, in context of the Enron and WorldCom debacles, that finally attracted media notice.

And Bush has taken the bait. Check out this lead from a story in today's Washington Post: "President Bush defended in a snappish tone Tuesday his own business experience with a corporation accused of fishy accounting."

Refusing to address the issue in depth, Bush merely said (in his snappish tone): "Everything I do is fully disclosed; it's been fully vetted. Any other questions?" Bush's short temper betrays his fear. The media is starting to sniff something big, and yes, there will be other questions.

The media doesn't have too dig deeply. It's all in the public record. As Media Whores Online has pointed out in its in-depth look at the issue (a must-read), The SEC reported that Bush violated SEC rules at least four times (link is a PDF). Yet the SEC was apparently ordered to back off Dubya after his father became president of the US.

The Associated Press has already picked up on the CPI report and discrepencies in the administration's spin. While Bush previously said government regulators "lost" his insider trading paperwork, propaganda mouthpiece Ari Fleischer now blames it on a "clerical error" by Harken lawyers. The article also has this gem:

Bush filed Form 4s late on four occasions, according to an internal Securities and Exchange Commission finding that was reported by a nonpartisan watchdog group, the Center for Public Integrity. Those sales involved stock worth more than $1 million.

On the largest sale, Bush sold his stock for $4 a share, just before the company filed a quarterly report revealing it had lost $23 million during the period. By the end of the year, the memo says, it was trading at around $1.

The Democrats smell blood, and the Republicans are running scared. Bush's famous sense of humor has deserted him. And, he can't claim he was snappy from jet lag (as he did when snapping at a US reporter in France). While Bush expresses outrage over corporate evildoers, it turns out that he and Cheney have both fed from that trough.

So now we have Ari saying, "If there are any bad players in our free-enterprise system, they will be held accountable by this administration and by the government."

Hopefully Democrats will take Fleischer at his word and begin investigating Bush and Cheney's corporate evildoings.

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Halliburton gets free pass

The US government announced a list of 86 companies fined for trading with nations on the US' "enemies list". The list includes nations such as Iran, Iraq, Cuba and North Korea.

Among the businesses fined were Ikea, for purchasing rugs made in Taliban-controlled Afghanistan, and the LA Dodgers, for signing two Cuban players. Yet, there was one company conspicously missing from the list.

Halliburton.

While Cheney was in charge of the company, Halliburton opened an office in Tehran (which, in case the Treasury Department doesn't realize it, happens to be in Iran). In addition, Cheney's Halliburton also signed two oil contracts with Iraq worth $73 million.

Phew! That's some havy duty trading with "enemy" nations. Yet Halliburton seems to have gotten a free pass. But never fear, because the next time Ikea, a Swedish company, tries to purchase 150 rugs from Taliban-controlled areas, the US government will be there to halt such heinous acts! (Never mind that at the same time Ikea bought those 150 rugs, the Bush administration had given the Taliban a $43 million gift...)

Anyway, remember that unbiased and comprehensive probe of Halliburton promised by the SEC? Well, turns out that after one month of investigating, the SEC still hasn't contacted Cheney.

Why am I not surprised?

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Halliburton gets free pass

The US government announced a list of 86 companies fined for trading with nations on the US' "enemies list". The list includes nations such as Iran, Iraq, Cuba and North Korea.

Among the businesses fined were Ikea, for purchasing rugs made in Taliban-controlled Afghanistan, and the LA Dodgers, for signing two Cuban players. Yet, there was one company conspicously missing from the list.

Halliburton.

While Cheney was in charge of the company, Halliburton opened an office in Tehran (which, in case the Treasury Department doesn't realize it, happens to be in Iran). In addition, Cheney's Halliburton also signed two oil contracts with Iraq worth $73 million.

Phew! That's some havy duty trading with "enemy" nations. Yet Halliburton seems to have gotten a free pass. But never fear, because the next time Ikea, a Swedish company, tries to purchase 150 rugs from Taliban-controlled areas, the US government will be there to halt such heinous acts! (Never mind that at the same time Ikea bought those 150 rugs, the Bush administration had given the Taliban a $43 million gift...)

Anyway, remember that unbiased and comprehensive probe of Halliburton promised by the SEC? Well, turns out that after one month of investigating, the SEC still hasn't contacted Cheney.

Why am I not surprised?

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Monday | July 01, 2002

Halliburton under fire

The SEC is investigating Veep Cheney's Halliburton. And the agency, headed by a former lobbyist for the accounting industry promises to be aggressive. Right. Don't believe it. During the Clinton years, SEC Chairman Harvey Pitt led industry efforts to open loopholes in corporate oversight laws, and his kid-glove treatment of the Enron debacle inspires nothing in the way of confidence.

In effect, Bush is ordering Pitt to look "aggressive" as the GOP attempts to deflect political heat for the near-daily scandals rocking Wall Street (and Main Street in the form of shrinking portfolios and 401(k)s).

As I've said before, all the action will happen in the class action suits. So far, I count 19 suits filed in the past month alone. Most of these will be consolidated into a single suit, so the number filed is irrelevant. What is relevant is that Cheney will be forced to testify once this case goes to trial. He will pull every trick, every delaying tactic, to avoid testifying in open court, but thanks to Clinton v. Jones, he'll fail. The only question will be whether he can push off any such testimony until after the 2004 elections.

For some background on the Cheney/Halliburton saga, check out this post. And this one.

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Monday | June 03, 2002

Cheney's mismanagement of Halliburton being exposed

The stock market is plunging on news that Alcoa's CEO is under investigation for tax fraud. Investors are starting to realize that CEOs and their accounting firms have been cooking their books for a while, and the market is taking a beating as a result. One of those crooked CEOs appears to be none other than our good Veep Dick Cheney. His mismanagement of Halliburton looks to go way past $100 million in improperly reporter revenues.

Yup, cooking up the books with $100 million is pretty bad, and is the source of a newly opened SEC investigation. But, what may REALLY get Cheney in trouble is his acquisition, as Halliburton CEO, of Dresser Industries.

Dresser Industries, a company with strong Bush family ties, was bailed out from a sea of asbestos-related tort claims when Cheney's Halliburton acquired the company. As a result, Cheney saddled Halliburton with billions of dollars in potential tort claims and essentially drove its stock price to the ground. Oh, and he also fired 10,000 employees after the acquisition of Dresser. Funny how he claimed during his debate with Lieberman that "''I've been out in the private sector building a business, hiring people, creating jobs.''

These revelations all but ensure that Cheney will face a shareholder's lawsuit and be forced to testify in public. And as in the Enron case, expect the press to trot out some of those 10,000 people who lost their jobs, contrasting it with the $18.5 million windfall Cheney received when he left the company. This is the Bush Administration's "compassionate conservatism": layoffs, stock market crashes, perpetual war, massive deficits, and, oh yeah, tax cuts for the rich.

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Sunday | June 02, 2002

Halliburton could land Cheney in court

Speaking of delicious ironies, here's another entry for that file. It looks like Clinton v. Jones might haunt the Republicans. You remember Clinton, right? That's the Supreme Court decision that forced Pres. Clinton to testify under oath and in public in Paula Jones' sexual harrassment case against him.

Well, now we learn that Veep Cheney's Halliburton was engaged in financial shenanigans, improperly reporting over $100 million in profits while he was the company's CEO. All under the watchful eye of Arthur Andersen.

Halliburton's stock price has plummeted over the last year, and took another dive on this latest news. As is wont to happen in these cases, shareholders get together and sue the crap out of the company's officers. And if Halliburton investors follow the rule, it looks like Cheney will have to testify in open court, under oath.

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Wednesday | May 29, 2002

Investigations galore

Bush is desperate to hold off an independant investigation into 9-11. The right-wing National Review is pessimistic Bush will succeed, noting that even without an independent investigation, there will be plenty of other investigations looking into the matter. Senate Democrats are already looking into the matter, and it's only a matter of time before "official" investigations are announced. And, Republican senators will be in no position to obstruct the hearings.

What the article doesn't state is that in addition to the intelligence committee investigations, and multiple committee investigations, and a possible blue ribbon panel independent investiation, you will have every Pulitzer yearning investigative reporter digging for the scoop of the year. Every leak will have added significance, and every event up to 9-11, whether coincidental or real, will be a dot to be connected.

Given that Enron is heating up, the multitude of 9-11 stories soon to emerge will put a serious dent in Bush's armor. And that's assuming that the SEC's new investigation into Halliburton and its last CEO, Veep Dick Cheney, doesn't become a political issue.

    05:25 PM | Link | Comments (0) | Email this post


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