Editorial from:  

In just one year, an astonishing $4 trillion of projected surpluses has vanished from the federal ledger, swallowed up by the President's (and Congress's) tax-cut package, by spending increases and by the economic downturn. The Congressional Budget Office, which this time last year was forecasting $5.6 trillion in surpluses from 2002 to 2011, now envisions $1.6 trillion instead. For the next two years, CBO says, the federal budget will run in the red.

In the short term, the biggest factor in this reversal of fortune is the recession; the tax cuts play only a supporting role. The downturn accounts for $148 billion of the swing from a projected $313 billion surplus into a projected $21 billion deficit for fiscal 2002. The tax cut accounts for $38 billion of lost revenue in 2002, increases in defense spending eat up $33 billion. But for the long term, the tax cut plays a major role, accounting for 41% of the lost surplus over the decade through its direct cost and the share it generates of increased federal debt service costs, according to an analysis by the Center on Budget and Policy Priorities.

By: Richard S. Dunham  

Politicians love to have silent, passive punching bags during election years. That's why the GOP is pounding Mr. Tax-and-Spend.

One thing good about a straw man: You can keep punching away at him all you want, and he'll never hit you back. That's one reason politicians love to cart straw men around with them on the campaign trail.

President Bush thinks he has found the biggest, softest straw man in the land. His political advisers believe it will give the Republican Party an upper hand in the 2002 budget battle on Capitol Hill and in the midterm elections next November, when Congress is up for grabs.

By: Mike Hersh  

If Curtis Hebert is Right, Bush Broke the Law - Again.

Former Federal Energy Regulatory Commission Chairman Curtis Hebert, Jr. is going public with explosive allegations. Hebert says Enron CEO Ken Lay - the largest contributor to George Walker Bush - made improper demands.

By: Joan Ryan  

The compensation of CEO's has become so obscene that workers ought to be storming corporate offices like French revolutionaries on King Louis XVI's palace. Waves of layoffs are sweeping the country, yet CEO's are pushing their boards of directors for once-unthinkable financial packages. Enron isn't the only company that sacrificed its employees while the executives cashed out.

From:  

Take a walk down memory lane with the conservative idiots! In honor of the first anniversary of Democratic Underground, and the first anniversary of the Top Ten Conservative Idiots list, the editors of Democratic Underground have compiled the definitive list of conservative idiots for the year. The ten conservative idiots listed below are not necessarily the ones who chalked up the most appearances on our weekly list (although most of them were very high scorers in this regard). Rather, they were chosen because we felt that they set the standard for conservative idiocy for the year 2001. For each individual, we are rerunning one entry from our list that represents their contribution to the art and science of conservative idiocy. So, without further ado, we are pleased to announce the Top Ten Idiots of the Year for 2001.

From:  

Just last year, the budget office envisioned surpluses of $313 billion this year and $359 billion in 2003. The new projections, if accurate, would mark one of the steepest budgetary downslides ever.

The fiscal nosedive has been prompted mostly by the recession, the cost of the $1.35 trillion, 10-year tax cut Bush muscled through Congress last spring, and the price tag of the war on terrorism. This year the recession is the key reason for the worsening numbers, but the tax cut's costs are the biggest single factor over the entire decade.

"It's clear that the [now defunct] American Spectator was being funded by Scrooge McDuck [Richard Mellon Scaife] and run by Gyro Gearloose [Emmet Tyrell]."

- Gene Lyons, in an interview with BuzzFlash

By: Paul Krugman  

First, administration officials will claim that people who want to cancel future tax cuts want to raise taxes. This is like George W. Bush's claim that the Enron chairman, Kenneth Lay, supported Ann Richards in the Texas governor's race (he did give Ms. Richards some money - but he gave Mr. Bush much more). That is, you can try to rationalize it with fancy word play - not cutting taxes is raising them from what they would otherwise have been, right? But it sure feels like a lie.

Second, they will throw up a smokescreen of confusing figures to hide the agreed fact that tax cuts are a major reason for the abrupt collapse of the projected surplus. Let me repeat the words "agreed fact". Recently four independent projections were made of the budget surplus over the next decade: one each from the Democratic and Republican staff of the House and Senate. All four projections marked down previous surplus estimates by two-thirds; all four attributed about 45 percent, or $1.7 trillion, of the decline to the tax cut. Everyone expects the estimates that the nonpartisan Congressional Budget Office will release tomorrow to look very similar.

Third, they will claim that the future tax cuts are just what the doctor ordered to deal with the current recession. The CBO disagrees; it declared, in a recent report, that accelerating those tax cuts would be ineffective as a stimulus measure. And if tax cuts now are ineffective, tax cuts later are even less effective.

Finally, the administration will try to convince you that the return of deficits won't hurt you personally. But for millions of Americans deficits will soon began to pinch, hard.

By: Mark Tran  

Documents at Enron were being destroyed at its Houston headquarters as recently as last week, according to executives at the bankrupt US energy company.

The revelation came from Maureen Castaneda, who was Enron's director of foreign exchange and sovereign risk management until two weeks ago.

From:  

The lid has just about blown off this already tense capital city with breaking news of the possible impending collapse of Vice-President Cheney's old firm, Halliburton Company of Dallas, Texas.

With its stock value in free fall for months, Halliburton is reported on the edge of doom, thanks to a mountain of asbestos lawsuits linked to its 1998 acquisition, under then-CEO Cheney, of Dressler Industries. The company has paid out more than $150 million in recent damages for asbestos cases - and has about 260,000 related lawsuits still pending. More than $19 billion in Halliburton shareholder value has vanished since the summer of 2001 - an undisclosed amount of it in employee 401(k) plans and other pension funds.

To try and stem off the disaster, Halliburton has given huge gobs of money to former and present Congressional Republicans in order to gain favorable deregulation rulings and other breaks. Among the more prominent names caught up in the Halliburton political operation, apart from Cheney, are former Missouri Senator and current Attorney General John Ashcroft and House Majority Leader, Dick Armey of Texas.

By: Mark Tran  

Kmart today became the largest US retailer to file for bankruptcy protection as the discount giant succumbed to competition from rivals Wal-Mart and Target.

America's second-largest discount retailer, which began business as a "five-and-dime" store in Michigan in 1897, blamed a rapid decline in its cash reserves resulting from disappointing sales and earnings in the fourth quarter and the loss of supplier confidence.

  California Energy Crisis Just a Hoax!

From:  

The Foundation for Taxpayer and Consumer Rights (FTCR) issued a review of the California energy crisis today, concluding that the energy crisis was all just a hoax to make money. Using government and industry data, the 58 page report, entitled "Hoax: How Deregulation Let the Power Industry Steal $71 Billion From California", claims that the California electricity system did not fail according to the laws of supply and demand, as it has been widely portrayed. The California energy crisis, the foundation said, was a hoax orchestrated by a power industry freed from price regulation that will cost $2,200 for every Californian.

For nearly a year, the energy industry, state officials and President Bush claimed there was a shortage of energy in California. But the crisis ended late last spring after Governor Gray Davis committed the state to spending at least $43 billion for energy over the next twenty years. The report accuses the power industry of manufacturing blackouts and threatening more of them so that it could gain profits, and overpriced long-term contracts during the crisis. The report also warned that unless the state of California regains control of its electricity supply, and makes it publicly accountable, additional artificially-created crises will occur in the immediate future.

Requires (free D/L)

By: Tim Francis-Wright  

The demise of Enron has lessons for the American government, but the most important lessons are not the most obvious ones. Enron is not the first company to overstate its earnings as if by habit. It is not the first company to enrich its executives while impoverishing its workers. It is not the first company to build strong and secretive ties to a presidential administration.

Its decline and fall, however, exemplify the failures of some of the vital cogs in the American political and economic systems. The compensation of executives at Enron, as at many publicly-traded companies, insulated top executives from the vicissitudes of the stock market, but left most employees unprotected. Outside accountants who were responsible for certifying Enron's financial statements were both complacent and incompetent. Government regulators were never able to decipher the problems with Enron's finances until the stock market did. The tax system allowed Enron to hide income in offshore shell companies. Finally, Enron's board of directors did little to question the company's dubious business dealings, let alone stop them. These aspects of the Enron debacle are interrelated because much of American politics nowadays is the politics of letting corporations do what they want.

By: William Rivers Pitt  

The Enron cloud hanging over the Bush White House has yet to take any solid shape, yet the implications are becoming clear. At the very least, Mr. Bush is sullied by association to the scandalous deeds of the giant energy corporation. If the perception develops inertia that Enron is Bush's favorite company, something that history indicates is quite accurate, the administration and its economic policies have what the spinners call an 'image problem'.

Perception, however, may prove to be the least of Mr. Bush problems in the coming months.

By: William Rivers Pitt  

It has been 130 days since September 11^th. We have heard many debates, accusations, and arguments about the genesis of the attacks. Every major news agency, and every talking head with a whisper of breath in their lungs, has weighed in. We have been told how we should respond. We have been told how we should feel. We have been told how we can help. In all that time, however, something essential has been missing.

We have yet to be told how such a thing was allowed to happen in the first place.

"If one can't be happy one must be amused."

- Nancy Mitford

By: Bryan Zepp Jamieson  

The big players, more and more, have taken the attitude that their wealth and power make them pretty much unassailable, and they are free to essentially plunder the American economy.

As an example, in 1999, there was a big push by investment houses and brokerages to get NASDAQ stock out to "the common man", aka: the small investor. It was all dressed up in verbiage about democratization of capital and so on, but basically, it boiled down to "find some suckers and unload". By the hundreds of thousands, small investors snapped up stocks with P-to-E's of 40 or greater, and in the case of dot coms, the "E" part of the ratio – earnings – simply didn't exist. Most of the big players got out before the NASDAQ bubble burst, leaving people with small nest eggs holding the bag – and this bag held a spectacularly dead cat. NASDAQ dropped 60% in value, and it's still overvalued today.

By: Bill Press  

It has been too quiet in Washington since Bill Clinton left. No scandals. No hearings. No investigations. But that may soon change.

Democrats on Capitol Hill, led by California's Henry Waxman, are talking about turning the tables on Republicans: holding hearings, conducting investigations and going after the Bush White House with the same zeal that Dan Burton and Al D'Amato once demonstrated when they pounced on Clinton and company. And there's plenty of fuel for the fire. The actions of three top administration officials - Karl Rove, Paul O'Neill and Dick Cheney - have raised serious questions about possible financial conflicts.

By: Harold Meyerson  

Okay, let's take the Bush administration at its word, however mutable that word may be. Let's say only a handful of officials - the Commerce and Treasury secretaries, and (according to a subsequent clarification) several lesser officials at Treasury, and (oh, yes, we forgot) White House Chief of Staff Andy Card - knew about Ken Lay's phone calls imploring the administration to do something that would head off Enron's impending bankruptcy. Let's say that none of these presidential confidants thought to tell George W. Bush or Dick Cheney - or Karl Rove, for that matter - that the largest donor to the Bush family, the dominant corporation in W.'s hometown and home state, the seventh-largest company in the United States, was about to go belly-up and that Ken Lay was cold-calling half the federal registry looking for help.

Let's further concede, if only for the sake of argument, that the Bushies played it by the book, that their collective sentiment was "We could help Enron, but that would be wrong." (Translation: We're into them so deep that they're radioactive.) In other words, let's assume that there's no scandal involving the administration's trying to help Enron avert bankruptcy.

That still leaves the scandals of trying to help Enron do just about everything else...

Editorial from:

The curtain is about to rise on at least seven different Congressional committee inquiries related to Enron. It might have been nice if the committee chairmen had brought the number down to a slightly more manageable level, but the intense scrutiny is certainly justified. While being careful not to step on any criminal investigations, Congress must address a wide array of serious issues raised by the company's unexpected implosion.

The real scandal, as is often said during these post-mortems, may have been what was legal. How could Enron rely on hundreds of sham offshore subsidiaries to avoid paying income taxes in four of the last five years? How could thousands of employees' retirement savings be threatened by their employer's collapse? Who was overseeing the accountants, the financial world's overseers?

From:  

The fate of some of President Bush's campaign promises, at a glance:

By: Marianne Means  

Now that its secret is out, Enron has so many legal problems and is the target of so many investigations that too many cooks stirring the pot could make an indigestible hash of the truth. At least 10 House and Senate committees, the Justice Department, the Securities and Exchange Commission, the Labor Department and the Internal Revenue Service are all investigating various aspects of Enron's shady finances.

Their efforts will inevitably overlap, complicating the ultimate legal goal of punishing these bums for hoodwinking politicians of both parties while lining their own pockets as they cheated stockholders, creditors and employees. The astounding national impact of this scam makes Bill Clinton's crummy little failed Arkansas real estate venture called Whitewater look like very small potatoes.

By: Robert Kuttner  

"Fool me once, shame on you", says a wise political maxim. "Fool me twice, shame on me." In his State of the Union address, President Bush will perpetrate a consumer fraud that makes his feint to the center in the 2000 campaign seem like truth-in-advertising.

You'll recall that the kinder, gentler Bush of the campaign postured moderate and sought, with success, to steal the Democrats' clothes. He, too, cared about children, women, poor people, minorities, abused HMO patients, trees, and so on. It worked just enough to neutralize Gore's advantages on all these issues. Bush, as President, then went blithely on to appoint a hard-right administration.

Now Bush is basking in stratospheric approval ratings courtesy of September 11 and the Afghan war. But he remains vulnerable on domestic issues. So in the January 29 State of the Union address, we will get Spurious George: The Sequel. This big-lie strategy is the work of political guru Karl Rove. Look for a lot of Americans to be fooled twice.

Enron's collapse exposes the folly of his cash-for-influence policy.

By: Julian Borger  

Investigators are poring over Enron's contacts with the administration last autumn, when the company was fighting for its life, looking for signs of illegal meddling in the market. In fact, the big trade-off for the company's campaign contributions was made months earlier.

Enron executives had six meetings with the vice-president, Dick Cheney, and his staff when he was drawing up the administration's energy plan in the spring, a fact that has surfaced only since the company went bust. The White House has refused to tell Congress which other industrial magnates it consulted in drawing up the plan, which is broadly speaking a polluters' charter. Few, if any, environmentalists were invited.

This is precisely how Bush mixed business and politics when he was governor of Texas. The oil and gas companies who supported his candidacy were given free rein, at secret meetings with Bush officials, to write their own rules when it came to state policy on emissions control. They, not surprisingly, chose a voluntary scheme with equally unsurprising consequences for air quality in Texan cities.

"There was absolutely, positively, no suggestion on physical examination that any alcohol was involved"

- Dr. Richard J. Tubb, the White House physician, on the 'pretzel incident'

By: J. Mark Batchelor  

Like most sequels, Bush II has been working hard to out-do its original incarnation: More tax cuts, more right-wing policies, bigger wars. Like Die Harder with its vastly increased body count and exponentially larger explosions than the first movie in that series, Bush II is an inflated version of the original. God help us.

But, like most sequels, there is a vague sense of something missing. Sure, just like Poppy, Junior's approval ratings went to 90% at the start of this sequel's 'war', yet like a sequel without the box-office staying power of the original, the popularity receipts seem to be dropping off a few weeks after the opening weekend. It may very well be because, unlike the recession and economic malaise attached to Bush I, the economic fireworks attached to this sequel will also be far larger than in the original production.

By: Jeremy Rice  

As Enron goes up in flames and the press tries to dig up more and more examples of the (morally) bankrupt energy company's influence on the White House, Democrats on Capitol Hill must not pay attention to the sentiments of White House know-nothing blowhard Ari Fleischer. But in order to do justice to the magnitude of Enron's criminality, they must play a steady, smart game designed not simply to bring the evil ones (Kenneth Lay, Arthur Andersen, etc.) to justice - nor just to restore the retirement benefits of 20,000 or so innocent Enron workers - but to expose every facet of the Bush administration's slavery to the free market.

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