Posts filed under “Current Affairs”

Why the States are embarrassing the Feds

First, the handwringing. Solemn, serious soliloquies.

Then comes angst: “This will interfere with our methodical case building process.”

Next up, a discussion of State versus Federal jurisdiction.

Finally, some announcer will — sigh — talk about the local political ramifications of State Attorney Generals.

Overlooked in all of this will be the gradual decay of Federal Enforcement and Prosecutions at nearly every level, and for a bewildering variety of issues and transgressions.

What was once a feared and mighty arm of the government has become a vast bureaucracy overmatched by corporate legal departments. Opponents of enforcement have spent millions of dollars lobbying to have enforcement laws relaxed. Though mostly successful, on the occasions when they would run into trouble on that end, they shifted gears, lobbying successfully to have department budgets cut and headcounts reduced.

They even managed to get their own defense attorneys — i.e., think Harvey Pitt as SEC Chairman — appointed as the head of the watchdog agencies.

Undermanned, underbudgeted and undermotivated, the federal agencies charged with enforcing securities laws, anti-trust laws and fraud prevention have simply been outgunned by the lawyers on the other side.

Of course NY State Attorney General Elliot Spitzer went after the corruption on Wall Street; The SEC, NYSE and NASD all turned a (mostly) blind eye to what was going on, and what is still going on. After all, who wants to interrrupt a rally?

Worldcom (perhaps Worldcon is a better name) was one of the biggest corporate frauds in the history of mankind. Before Oklahoma ran out of patience, indictments for the ringmasters were few and far between. Any first year law student could have figured out how to indict the people behind 12 billion dollars worth of fraudulently reported revenue. What on Earth is taking the Feds so long?

How is it possible that Ken Lay, CEO and creator of the force that was Enron, has yet to be indicted? This was the biggest scam of all times, the ultimate Ponzi scheme. Are we living in some episode of the Twilight zone? It’s simply embarrassing.

They may have to move the trials of both Bernie Ebbers and Ken Lay to new Zealand, because that’s the only place where a conviction is not guaranteed.

Of course, that’s if they ever get indicted . . .

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Update:
There’s legal, and then there’s shady: A new report, titled “Executive Excess” details the specific CEOs personally had the greeatest profits from layoffs, pension shortfalls, and tax dodges:

CEOs at companies with the largest layoffs, most underfunded pensions and biggest tax breaks were rewarded with bigger paychecks, according to a new report, “Executive Excess 2003: CEOs Win, Workers and Taxpayers Lose.”

Median CEO pay skyrocketed 44 percent from 2001 to 2002 at the 50 companies with the most announced layoffs in 2001, while overall CEO pay rose only 6 percent. These layoff leaders had median compensation of $5.1 million in 2002, compared with $3.7 million at the 365 large corporations surveyed by Business Week.

You can download the PDF “Executive Excess” Report here.

Pointer courtesy of Dave Callaway

Category: Current Affairs

The Beeb asks the rest of the World about U.S.

Category: Current Affairs

Physics vs. Economics

Category: Current Affairs

Bad Medicine, part I

Category: Current Affairs, Finance, Music, Politics

OMB Watch: Disturbing Pattern Emerging on Government Budget Analyses

Category: Current Affairs, Finance, Politics

Terrorism Futures Market: Much Ado About the Wrong Thing

Category: Current Affairs, Finance, Politics, War/Defense

Weekend Reading

Category: Current Affairs, Finance, Politics

Terror Futures Market

Category: Current Affairs, Finance

The Danger of Dogma

About six months ago, Professor Boskin, an economist at Stanford who was chairman of the Council of Economic Advisers under the first President George Bush, released a paper suggesting that the federal government had a bounty of $12 trillion coming that no one had bothered to count.

Baby boomers and others, who spent decades making tax-free contributions to their I.R.A.’s and 401(k) plans, would soon begin paying taxes on withdrawals from those accounts, Professor Boskin noted. The windfall from all that, he argued, would more than cover the deficits in Social Security and Medicare.

But now it appears that Professor Boskin fired a blank. On July 17, after his ideas were discussed on TV, he quietly notified his colleagues that his equations contained an error. Though he is busily overhauling his paper even now, his latest moment of fame may have already passed.

Download “It Looked Good on Paper” NYT pdf

Category: Current Affairs, Finance, Politics

Category: Current Affairs, Finance, Politics