DoomwatchTM vs. Timesizing®
Collapse trends - January 2002
[Commentary] ©2002 Philip Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080 - HOMEPAGE
1/31/2002 headlines from hell -
1/30/2002 headlines from hell -
- Bush budget will seek cuts in programs for job training, by Robert Pear, NYT, frontpage.
WASHINGTON...- Even though unemployment has increased sharply in recent months, ...Bush's budget will seek cuts in several job-training programs for laid-off workers and young adults most affected by the rise in unemployment, budget documents and federal officials say. Bush administration officials question the effectiveness of some of the jobs programs, which Congress created with overwhelming bipartisan support 4 years ago....
[This administration is just not a team player. And the strategy here is the same as they used to pull out of the Kyoto climate accords and the ABM Treaty - quibbling about effectiveness without replacing it with anything. Their whole strategy seems to assume that something general, powerful and central like timesizing is already in place and nothing else is needed. But there's only one problem - borrow&militarize Bush doesn't "get" timesizing, not downsizing any more than the tax-&-parasitize Democrats.]
The U.S. Conference of Mayors sent a protest letter this week to the White House criticizing an administration plan to cut "youth opportunity grants" to $45m next year from $225m this year. The mayors said the cut would hurt some of the poorest communities, including parts of Detroit, Houston, L.A. and Philly....
[Part of the gigantic jobs program that government everywhere has become since we took the wrong fork in 1933 and opted for makework instead of sharework. But the Timesizing.com Party line on this is, don't dismantle anything until you have something better - like overtime-to-training&hiring conversion - up and running to replace it.]
1/27-28/2002 weekend headlines from hell -
- New wave of fear - The Enron story is about an era, not just a company, by Steve Bailey, Boston Globe, C1.
[Steve Bailey really hits his stride in this one!!]
And we're surprised there's a crisis of confidence?
- The former vice chairman of Enron Corp. is found dead in his Mercedes...a suicide note...beside him
- Geo.W.Bush and the General Accounting Office are headed for a constitutional crisis over the president's refusal to turn over records of meetings between the administration [eg: the VP] and Enron last spring ["They're PRIVATE!" Yeah, right - to set public energy policy.]
- The wife of disgraced ex-Enron chairman Kenneth Lay...gfoes on the "Today" show to say her husband was a victim, duped by the executives who worked for him [and furthermore, that his family is "financially ruined"! - what about that $100m, Linda?]
- The Rev. Jesse Jackson emerges from a meeting with Lay at Enron's Houston HQ and likens him to Job. [WHAAAT? The Biblical model of long-suffering?!! Talk about spinning the villain as victim! The latest is "Enron says that shredding was stopped only recently," by Feder&Brick NYT frontpage - like they're boasting about it now.]
The bad news got worse yesterday.
Call it the second wave of fear [ah, Steve, 9/11 would make it the third].
- Williams Co., one of the largest US energy traders, was rocked by the biggest one-day decline in its stock in 20 years after the natural gas-pipeline owner said it faces as much as $2.4B in costs from a communications business it spun off.
- [And as the queue forms behind Enron, Steve hasn't even mentioned ImClone, but he does include -]
- Exeter, NH-based [except for their tax-evading pro-forma HQ in Bermuda] Tyco International's stock also suffered its biggest decline in 2 decades after it paid $20m to a director and a charity he controls in exchange for his help in competing an acquisition. [Faithful readers will remember Tyco as probably The Biggest corporate takeover artist.]
- And it was the morning after for telecom bust Global Crossing Ltd., which a day earlier made the 4th-largest bankruptcy filing in American history [Enron was 1st-largest - note article on same page of Boston Globe as Steve's column - "Global bust won't affect New England service," by Peter Howe, BG, C1. Oh thank God - as long as we're OK the rest of the country can go to hell, right? And should we mention "FleetBoston loses $507m in 4th - Kmartr [whatta typo!] and Enron bankruptcies, crisis in Argentina blamed," by Scott Nelson, BG, C1. And don't forget the crisis in Japan. And the crisis in Turkey.]
- Yesterday...the Federal Reserve questined PNC Financial Services' accounting methods, forcing the Pittsburgh company to reduce its 2001 profits by $155m..\..
- The Dow Jones Industrial Average dropped nearly 250 points yesterday [Jan. 29, compare Oct. 29, 1929 - note another article on same page of Boston Globe as Steve's column - Dow hits lowest level since Nov. - Earnings, Enron seen taking toll, despite two upbeat reports," by Scott Nelson, BG, C1.]
In the wake of the dot-com bomb, the Enron debacle is creating a new meltdown, this time focused on the overcapacity in the telecomms industry and the murky art of accounting.
While all the moving parts may be difficult to follow without an MBA, the result is not: Confidence is crumbling at an astonishing pace.
[Points to realize -
...Let's remember, too, that the American economy seemed to be coming unglued in the midst of
- In a highly industrialized society of "intelligent" beings, confidence = mutual faith is EVERYTHING because despite all our ridiculous chest thumping about our "freedom" and "independence," we are the most inter-dependent society in the 5000 years of human history and the 2,000,000 years of human evolution (or have they only dated homo erectus back 1m years so far?)
- Stocks are company-specific money, and money is the most faith-dependent symbol you can imagine. It symbolizes a unit of average value of human worktime across a given economy, adjusted for generally expected future potential.
- Overall, every industry in our entire global economy is in a crisis of overcapacity relative to what can be profitably purchased by consumers, because for the last two generations, we have been injecting work-saving technology on one side and on the other side, we've been downsizing our workforce alias consumer base, without adjusting downward our workshare per person per time unit (i.e., workweek) in the middle. On the contrary, instead of reducing our 1940-level workweek to spread the vanishing human employment, we've been increasing our flood of jobseekers - the postwar babyboomers hit the job market around 1990 crimping family income, so housewives hit the job market in the 70s and 80s, and then compassion-talking vote-hungry Democrats slammed a record number of immigrants into the job market in the 90s. And overcapacity means Great Depression II. The only recovery paths are militarization (and accompanying epidemics), and timesizing = trimming hours, not lives. Bush is selecting militarization. "Axis of evil" indeed! (See "Bush, focusing on terrorism, says secure U.S. is top priority - ...In speech, he calls Iraq, Iran and North Korea 'an axis of evil,' by David Sanger, NYT, frontpage.)]
[Steve tries to make out that we survived these just fine - they were just "buying opportunities" - and we're correcting them just fine. In short, there's nothing negatively cumulative going on or, the economy is like an infinite ocean that can take any amount of abuse and pollution. But 66% of our economy, the biggest, and 60% of Japan's, the 2nd-biggest, depend on the consumer base, and the consumer base depends on the job market, and the job market was proved non-infinite between 1929 and 1941. Nothing automatic within the economy made it recover from the demobilization of 1918 and the downsizings of the 1920s. Nothing in the New Deal's extensive expensive feel-good backbends ever managed to cut the 25% unemployment below 14%. It was only the remobilization, the unprecedented militarization of World War II which yanked trillions of excess manhours out of the job market, some permanently, that made us recover from the Great Depression - and for all the wealthy's whining about taxes today, we had a 90% tax bracket on the wealthiest all the way from the War to 1959 to help centrifuge that income and get it spent and BACK INTO CIRCULATION. Neither the dramatic but ineffectual New Deal nor the WW2 militarization were matters of automatic economic recovery forces that seem to have gripped the faith of so many otherwise intelligent people today. Both were outside the economy and artificial rather than natural or automatic or "cyclical" as all the misleading blather about a business "cycle" would lead you to believe.]
- the S&L crisis of the late 1980s
- And the collapse of Long-Term Capital Management, the high-profile hedge fund,
- and the failure of the Russian economy in 1998....
1/22/2002 headlines from hell -
- 1/27 Lack of confidence in management seen, BG, G2.
Developoment Dimensions International, an HR resources consulting firm, says that an increase in CEO departures nationwide corresponds with recent findings that 2 out of 3 employees do not have confidence in top management. In the first half of 2001, some 470 CEOs resigned or were fired, says the company.
- 1/27 Amid [past] boom, widening gender wage gap seen, by Diane Lewis, BG, E1.
...A congressional study...find[s] that women in management lost ground compared to men in the same industries during the latter part of the economic boom, earning less money compared to men in 2000 than they did in 1995. The report, which draws on a study from the General Accounting Office [GAO], looks at 10 industries that employ more than 70% of all women in the country. ...The report...suggest[s] that "combining parenthodd with advancement in management is particularly difficult for women."
[Not P.C. (politically correct) - but not surprising either.]
A widening gap was found...in seven other industries.
- ...The GAO study found that in 1995 a full-time female manager in communications earned 86 cents for every dollar earned by her male counterpart.
- But 2000, however, a female manager in the same industry took home only 73 cents for every dollar earned by a male manager.
Only in three fields - education, public administration and medical services - did women see gains. For example, full-time female managers in public administration earned 83 cents for every dollar earned by males in 2000, up from 80 cents in 1995.
- In entertainment...women managers saw their earnings drop from 83 cents for every dollar earned by males in the same jobs to 62 cents.
- Within the finance, insurance and real estate sector, the wage disparity...slid to 68 cents from 76 cents....
The report also revealed that women now represent almost 47% of the US workforce, but hold only 12% of all managerial jobs....
There were 2 important limitations in the study.... Noted Lisa Lynch, academic dean of the Fletcher School of Law and Diplomacy at Tufts University and former chief economist at the US Dept. of Labor,
[And face it - the out-of-sight pay of top executives - mostly men - is going to exaggerate the disparity. But we can go on forever worrying about women, and blacks, and Latinos, and Asians, and young people, and old people, and handicapped people, etc. etc. and totally fritter away our energy. The fact is, general pay levels are too low and general hours levels are too high, and that will continue to worsen for us all until we modernize the economy with automatic overtime-to-training&hiring and fluctuating adjustment of the workweek vs. unemployment-welfare-disability-homelessness-prisons, OR have another big war (or prison boom) to take care of the surplus of labor hours that is flooding the market in 40-hr/wk jobs. But the focus on micromanaging legislation goes on -]
- "...You need to control for total labor market experience and time spent with the current employer...because we all have various seniority rules that apply to compensation..\..
- You need to control for..\..level of responsibility...because...managerial responsibility...can range from the office manager to the highest-ranking managers."...
...News of the report prompted a call for legislation to promote equity in the workplace, including a renewed fight for an Equal Rights Amendment (ERA). "This shows that at a time when the nation was strongest, women slipped," said US Rep. Carolyn Maloney, D, NY, who commissioned the study with Rep. John Dingle, D, Mich....
[And was the nation really "strongest" during a technology bubble? The number of layoffs has been high all the way back to when we started tracking in early 1999. There was a peak after 9/11 but layoffs have been high throughout the 1990s and much of the 1980s. With that kind of management orientation, there's no way you're going to avoid downsizing your consumer base and inducing recession, and each "recovery" is going to be more superficial. Even the "recovery" after the '90-91 recession was dubbed the "jobless recovery," and that phrase is starting to appear again. Witness Bob Herbert's op ed, "What's a recovery without jobs?", 1/28/2002 NYT, A21.]
- 1/28 State [of Mississippi] lures good jobs, but companies worry about workers, by David Firestone, NYT, A8.
When Mississippi [in 2000] won...the billion-dollar Nissan truck factory now rising...along the interstate north of [Jackson], the state's most serious shortcoming [was in] skilled workers to fill Nissan's 4,000 high-paying jobs. ...Miss. lack[s] experience in high-tech manufacturing, and [has a] poor educational record. Publicly, [Nissan] proclaimed its faith in the state's strong work ethic, but privately it got the state government to pay $80 million to train its workers, as part of Miss.'s record-setting $300 million incentive package....
[This pathetic charity for the rich alias corporate welfare is not the role of government and is suicidal for corporations. Paul Weaver's *The Suicidal Corporation: How Big Business Fails America (1988). And here's more -]
At least half a dozen governors and members of Congress have recently traveled to South Korea on "trade missions" that were mostly thinly disguised sales pitches [eg: to Hyundai].
[This is the kind of makework that represents a pervasive corrupting vein throughout American government. The private sector destroys 40-hour jobs right and left, and the city, state and federal governments run around wasting taxpayers' money trying to restore them, instead of just refereeing the sharing of the diminishing work.]
"I work hard every day to bring high-quality, good-paying jobs to our state"..\..Gov. Ronnie Musgrove of Mississippi...said....
[Pathetic. And in a related article, look at the disgraceful turnaround in Bush, supposedly a small-government Republican -]
In a sign of changing times, Bush calls for more spending, by Richard Stevenson, NYT, frontpage.
[Bankrupt in ideas, the two parties of the choice-challenged American "democracy" slump towards each other, the GOP copying failed Dem policies and the Dems copying failed GOP strategies, and both missing the real center and a real idea was successful from 1776-1940 in staving off chronic deep depression, and today is the wind beneath the wings of America's most profitable steel company ( Nucor) and Europe's most recession-resistant economy (France), Timesizing, Not Downsizing.]
- 1/28 Cheney is set to battle Congress to keep his Enron papers secret - [Congressional] investigators prepare to sue the White House as it digs in, by Elisabeth Bumiller, NYT, frontpage.
...prepared to go to court to fight the release of documents demanded by Congress....
[Gee, lucky our sleazy Congress passed that 'freedom of information' act or they'd have an even harder time penetrating executive-branch sleaze. Soon to be seen at shredders throughout the White House basement - Dickhead Chain-he - Lordy, how much time does he need to mulch them memos? But that may turn out to be a dead end too -]
Paper shredding key in Enron case - Threat of indictments may aid in financial investigation, by Kurt Eichenwald, NYT, frontpage.
[Is ANYone using the phrase "destruction of evidence" yet or are we still pussyfootin'? Hey, if we lose our toll ticket, we're charged the maximum toll. Why not automatically charge all these shred-happy clowns for the worst crimes we can imagine in this case. Same with those who "plead the 5th." Withholding of evidence should be treated as full confession to the worst possible crimes in any given case. We humans need to know just how stupid some (all?) of us can be. The issue, gratia Buckminster Fuller, is not punishment but preventing repetition. And so far, Enron II is already coming in view and God knows how many others are lining up behind it -]
1/27 ImClone faces SEC, Justice Department inquiry, Bloomberg via BG, E7.
1/17/2002 headlines from hell -
- For Enron chief, $200 million wasn't quite enough cash, by Floyd Norris, NYT, C1.
Over 3 years starting in 1999, Kenneth Lay has reported receiving more than $200m either from Enron directly or through exercising options. Yet, his lawyer now says, he was forced to borrow millions more from the company last year to meet his obligations....
[Pooor baby. Probably just some very big Swiss/Hersey/Manx/Cayman Is. bank accounts he was stocking to pay for his impending legal defense or "disappearance."]
- Ex-official says Enron employees shredded papers - A central issue in probe - Destruction of documents was continuing as recently as last week, she reports, by Jonathan Glater & Michael Brick, NYT, front page.
...Maureen Castaneda, who was Enron's director of foreign exchange and sovereign risk management..\..yesterday [made a] statement [that] was the first indication that documents were destroyed at Enron amid investigations of the company's collapse by Congress and the Justice Dept....
[Don't they usually march into these companies and seize all files?]
- [Here we go again -]
...US arrival puzzles, worries Filipinos - 'I hope American troops will not make my province a laboratory.' Gerry Salapuddin, Filipino congressman, by Indira Lakshaman, Boston Globe, A8, frontpage.
BASILAN ISLAND, Philippines - This tropical island does not feel like a war zone...but underneath the placid facade...is a community that has been terrorized for the past decade by a small but vicious band of homegrown Muslim rebels...the Abu Sayyaf..\..who have adopted kidnapping for profit as their signature, [now including] two Americans and a Philippine woman.... Yet many residents said that although they want the Abu Sayyaf problem resolved, they worry that the imminent deployment of US forces for livefire training exercises with Filipino soldiers could make matters worse.... A force of 650 [is] being sent to the Philippines....
[Undoubtedly just a "foot in the door" now that Bush is asking Congress for $50 billion to wage the "war" against terrorism and is evidently playing the militarization card in a bid to stimulate economic recovery in time for the next election. And after Pres. McKinley's war around the turn of the last century and World War II, the Philippines are familiar fighting turf for America when it's time to cull the surplus of labor hours in the job market, their own and others'.]
Locals already feel endangered by both the Abu Sayyaf and the military, and adding US troops to the volatile mix means more chances to get caught in the middle, especially in Americans can't tell the good guys from the bad guys....
[Apparently this has been a huge problem in Afghanistan, but hell, who cares? The whole hidden agenda of war is to adjust working hours on offer downward to correspond with rising levels of efficient technology without enforcing overtime bans or reducing the workweek.]
1/16/2002 headlines from hell -
- Airlines report massive losses - Despite US aid, AMR $798m in red in Q4, Continental $149m, by Stephanie Stoughton, Boston Globe, E1.
- [& today's whiffs from the pondscum company & its 'us-too' auditors -]
- Enron avoided income taxes in 4 of 5 years, by David Johnston, NYT, frontpage.
- Enron letter suggests $1.3B more down the drain, by Gretchen Morgenson, NYT, C1.
- Auditor received warning on Enron five months ago...- Inquiry says Andersen studied issues raised but decided to stand by its work, by Richard Oppel, NYT, frontpage.
[Remember "honesty is the best policy"? What happened to that anyway?]
- White House says economics adviser saw little risk on Enron, by Sanger & Van Natta, NYT, C1.
WASHINGTON...- The White House said today that...Bush's top economic adviser...Lawrence Lindsey..\..who had served as a paid consultant to the Enron Corp. before joining the administration [and now] heads the National Economic Council,.\..had directed a review of the broad economic effects of a potential collapse of the company but concluded it posed little risk to the American economy....
[teaching us that many contemporary economists are no better than Andersen and the Bush administration may be bucking for the President Harding Prize for Nice House, Nobody Home administrations.]
- Argentine peso sinks to new lows as crisis continues, by Jennifer Rich, NYT, W1.
[and again -]
Lost in Argentina - As residents watch savings diminish, Fleet's own fortunes fall, by Scott Nelson & Joshua Goodman, Boston Globe, E1.
- [Ripple Effect Dept. (R.E.D.)]
Troubles at Enron and in Argentina hurt J.P. Morgan, by Kenneth Gilpin, NYT, C4.
- [and in one of our more insightful headlines today -]
New economy, same old economics, pointer digest (to C2), NYT, C1.
Maybe the new economy wasn't so new after all, at least in the area of Big Ideas - Hal Varian: Economic scene.
[Yeah, its Big Idea was that high tech excitement can indefinitely delay the need for return on investment. (At least until it can't).]
- [song - "On the rise again..." - (apologies to Willy Nelson) ]
After steady declines, welfare rolls in NYC are on the rise again - Governors say a recession is straining the U.S. safety net, by Raymond Hernandez & Nina Bernstein, NYT, A26.
- Britain: Unemployment rises, by Alan Cowell, NYT, W1.
...for a third successive month, but the overall unemployment rate remained close to a 26-year low at 3.2%, far below the levels in the EU and the U.S....
[Britain is even better at undercounting unemployment than we are here in the U.S., because they've got better and longer welfare benefits, and so basically the whole unemployed north of England can go uncounted and Tony Blair can keep lookin' goood.]
- [bonus - humor from hell]
2 women die after mistake at hospital - Given nitrous oxide instead of oxygen, by Robert Worth, NYT, A26.
["At least they could die laughing."]
...in New Haven...at the Hospital of St. Raphael....
[= one for Bill Coe's collection.]
1/13-14/2002 weekend headlines from hell -
- Arthur Andersen fire an executive for Enron orders - 3 others placed on leave - Firm reports its partner told auditors to destroy papers and e-mail in the case, by Richard Oppel with Kurt Eichenwald, NYT, front page.
...after learning that the SEC had begun an investigation of Enron's accounting....
[And again -]
For Andersen and Enron, the questions just keep coming - Firing leaves accounting firm open to criminal investigation, Floyd Norris, NYT, C1.
[And again -]
Enron's ties to a leader of House Republicans went beyond contributions to his campaign, by Alison Mitchell, NYT, C1.
[Photo caption -] The Enron Corp. contributed to groups aligned with Tom DeLay, the House majority whip, and used two employees of his as lobbyists.
[The "just gimme MINE!" job-and-money desperation continues in an economy that balks at sharing the vanishing work.]
- Bush, citing security, bans some unions at Justice Dept., by Steven Greenhouse, NYT, A14.
Invoking security concerns...Bush has issued an executive order barring union representation at U.S. attorneys' offices and at four other agencies in the Justice Dept.... Federal law [already] bans strikes by federal workers....
[Who says Republicans are against government interference in the economy? And the more government interferes, the faster and deeper the downturn, and the tougher the recovery. Timesizing offers one automatic market-oriented adjustment to keep our consumption in balance with our production, instead of the blizzard of socialistic government micromanagement pursued by both Democratic and Republican Parties in this country.]
- Georgia finds itself in jobless benefits bind - Rising unemployment, tough requirements and modest payments - Facing the consequences of reducing taxes to pay for unemployment insurance plans, by David Leonhardt, NYT, A14.
[And we wouldn't even need unemployment insurance (or disability, or workmen's comp, or minimum wage, or social security) if we had passed the 30-hour workweek through both houses in 1933 instead of just the Senate, and tuned it into a flexible worksharing system over the following 69 years instead of wasting our time on civilian and military makework ("Keynesianism").]
- Argentines line up to escape to the Old World - The latest crisis leaves the middle class battered and dispirited, by Larry Rohter, NYT, A3.
[Photo caption -] As it battles an economic crisis, Argentina finds its strength further imperiled by an exodus of the middle class. A journalist, Jorge Trepat, waited with hundreds of others outside the Spanish Consulate.]
BUENOS AIRES...- Liliana Cardamone's father came to Argentina from Italy as a child because his parents dreamed of a better life here. But on Friday morning, Ms. Cardamone was standing in a long line outside the Italian Embassy, preparing to claim Italian nationality so that she and her husband and two small children can move to her father's homeland. "It pains me to do this...but we can't stand it any longer," \said\ Ms. Cardamone....
[Ironically, the resulting reduction of the labor surplus in Argentina will help market forces raise wages, centrifuge wealth, activate spending and slow or reverse the downward slide, even without cutting the workweek. As Arthur Dahlberg points out in "Jobs, Machines and Capitalism" (1932, p. 182), unions in England around 1850 used to pay people to leave the country so the wage-punishing competition for jobs wouldn't be so bad.]
1/03/2002 headlines from hell -
- 1/13 Critics say IMF lacked judgment on Argentina - 'The data was hiding how large the deficit was', by Mark Drajem, Bloomberg via BG, F6.
[Try $132 billion.]
- 1/14 Turkey's leader visits U.S. to plead for urgent economic aid - Shades of Argentina, with a coalition's survival at stake, by Douglas Frantz, NYT, A3.
[Hey, we're having a hard enough time 'helping out' our own wealthy people let alone those in the rest of the world.]
- 1/14 Amid fiscal 'crisis' [our quotes - ed.], Medicaid is facing cuts from states - Prescription costs soar - Recession results in decline in revenue, forcing 'terrible choices' for officials, by Robert Pear & Robin Toner, NYT, front page.
...The 36-year-old program, which pays for one-third of all births...
[Wouldn't 100% of all contraception be cheaper?!]
and nearly two-thirds of all nursing home patients, is caught in the financial vise of soaring costs and declining state revenues....
[The great US of A, with some of the lowest taxes in the world, continues to whine the loudest, especially the richest Americans who pay the smallest percentage of their unspendable hoards in taxes. Another goody today on this -]
The fiscal state of the states - Budget deficits abound from coast to coast, op ed by William Pound, NYT, A21.
- 1/14 Stock show seeking room to roam - Asking voters to help beef as they aided the Broncos, by Blaine Harden, NYT, A10.
...Ranchers at the show complain there is not enough space to exercise their livestock. Horse breeders say practice rings are so congested as to be a danger to both horse and rider.... A sure cure for these big-city stock-show blues is to be found in the pocketbooks of the voters of Denver. Just as they were asked in the 1990's to tax themselves to pay for a new football stadium for the Denver Broncos and a new baseball stadium for the Colorado Rockies, they are now being asked to tax themselves to pay for a bigger better stock show complex....
[More charity for the rich forced from the middle and lower brackets. We agree with the letter to the editor on A20 today, "Let team owners pay for stadiums" and let ranch owners pay for stock show complexes.]
- 1/14 Andersen says [internal] lawyer let its staff destroy [Enron] files, by Richard Oppel, NYT, A13.
[Like they wanted to, all by themselves!?! Ooops, here's a couple more on this -]
A failure to account, editorial, NYT, A20.
Harvey Pitt was recently quoted in Barron's as saying that "there is nothing rotten with the accounting profession." What makes the assessment alarming, instead of just laughable, is that Mr. Pitt is the chairman of the SEC [and] was a prominent Washington litigator who represented Arthur Andersen and other major accounting firms before being appointed to the SEC by...Bush....
[Bush's administration is starting to look a little like Harding's in the early 1920s. Same presentable jock presiding over a crock of corruption, for example, today's "Aides deny any duty to tell Bush of Enron calls," by Don van Natta, NYT, A12 - shades of Reagan, who slept all through Oliver North's shenanigans in the basement of the White House. But there's yet more on Enron -]
Andersengate - A scandal, but not political, op ed by William Safire, NYT, A21.
[Oh absolutely not! And yet another item -]
Silencing the alarm - Enron got plenty of help, op ed by Bob Herbert, NYT, A21.
The e-mails are chilling.
But unsuspecting Enron employees...by the thousands were about to lose their jobs, their retirement nest eggs, their entire life savings.... Did anyone sound the alarm with the company's employees, or with the millions of Enron shareholders from coast to coast?... If any of this was a matter of concern to the Bush administration, we haven't heard about it. Treasury Secretary O'Neill was on television yesterday blithely stating, "I didn't think this was worthy of me running across the street and telling the president.... Companies come and go."...
- Last Aug. 14, the day Jeffrey Skilling mysteriously resigned as Enron's CEO, the company's chairman, Kenneth Lay...e-mail[ed] all employees..."I want to assure you that I have never felt better about the prospects for the company." By then Enron's prospects were as [good] as those of a sand castle at high tide [and] Mr. Skilling and Mr. Lay had already cashed in more than $160m worth of Enron stock....
- On Aug. 27 Mr. Lay sent employees another e-mail..."One of my highest priorities is to restore investor confidence in Enron. This should result in a significantly higher stock price"..\..
- 1/14 Seeking edge on Bush, Democrats may advance dates of primaries, by Richard Berke, NYT, front page.
- 1/13 Ex-Lucent employees told to repay benefits, AP via BG, F7.
New Hampshire wants some former Lucent Technologies Inc. employees to repay thousands of dollars in unemployment benefits because of a mistake by the company.... Donna Anderson of Londonderry...and her husband were laid off in August and [have] been asked to return $2,500. The state Division of Employment and Training told Elizabeth Coggins...of Seabrook that she owes the agency $1,350..\..
"It's bad enough we got laid off. Now we have to pay the money back because they screwed up?" [said] Anderson.... "I feel it was Lucent's error adn that Lucent should eat it"..\..Coggins said....
[Amen. Getting other people to pay for your mistakes is not a plan for motivating correction.]
- [bonus item]
1/14 Newspapers turn to paid obituaries...- A blurring line between news articles and classified ads, pointer digest (to C7), NYT, C1.
The notion of selling obituaries, often while keeping them typographically indistinguishable from regular news, was first adopted by a few small newspapers nearly two decades ago. Now larger newspapers have adopted the practice as paid obits accelerated last year while advertising revenue fell and newsprint prices increased.
- [bonus item]
1/13 As a matter of fax, company's method of polling annoys, by Bruce Mohl, BG, F3.
Kris Bieker-Brady until recently has been receiving a fax just about every week at her Milton home from a company asking her to vote on one hot-button issue of another.... "Your views are important. We make sure that decision makers are hearing them," said the faxes from 21st Century Faxes Ltd., which is based in London.... Federal and some state law enforcement agencies say the unsolicited faxes are illegal, not to mention annoying. They tie up the recipient's fax machine, gobble up fax paper, and, in the case of Bieker-Brady, wake her up in the middle of the night because that's when the faxes tend to come in....
1/1/2002 headlines from hell -
- Ruling eases restrictions on tax shelters for companies, by David Johnston, NYT, C1.
A federal appeals court has issued a ruling in a case involving Compaq Computer that tax experts say will make it much more difficult for the IRS to demolish many corporate tax shelters.... "This is disastrous" for the integrity of the tax system, said David Weisbach, a U.Chic. law prof who has argued...that Congress must prevent corporations from using a patina of legitimacy to justify tax shelters....
[More of government working against itself.]
- Texas says it's no California as it deregulates electricity, by Jim Yardley, NYT, front page.
[Oh no? This country is really getting real stupid about not learning lessons the hard way - by experience. How big a disaster does it take to get through the thick insulation of wealth surrounding decision-makers?]
For earlier collapse stories, click on the desired date -
- China: Economic growth slows, AP via NYT, W1.
...Officials in China have said that 7% is the minimum level of growth needed to create jobs for millions of workers who were laid off by state industries in market-oriented economic 'reforms.' [our quotes - ed.]
[Well, Goood Luuuck in getting a 7% growth rate to absorb all your disposable employees! Of course, if you continue inflating it -]
..\..China's economy is estimated to have grown 7.3% in 2001, with domestic demand offsetting weak growth in exports in a slowing world economy, according to reports from state-run 'news' media....
[Again, our quotes. China is a very good candidate for work sharing a la Timesizing.]
- Singapore: Recession deepens, Bloomberg via NYT, W1.
...in the fourth quarter as the slump in manufacturing extended to services, the prime minister (PM), Goh Chuk Tong, said.
[Better make that 'Go Chuck Economy."]
GDP shrank 7% from a year earlier, after falling 5.6% in Q3, the PM said in a New Year's message to Singaporeans. The nation is in its worst recession in 37 years....
["Happy New Year. By the way, your economy sucks." There goes another of the former "tigers of the Pacific Rim."]
- A leaderless Argentina is divided by turmoil, pointer blowout (to A3), NYT, front page.
Without a president, a cabinet or a functioning government, Argentina [i]s adrift. Politicians struggle...to resolve their differences over who should run the country as the population prepare[s] itself for the possibility of economic collapse.
[Oh yeah? And just how do you 'prepare' for economic collapse. It gets better (= worse). Check out the inside headline -]
Argentina drifts, leaderless, as economic collapse looms, by Larry Rohter, NYT, A3.
..."You know, I've lived through a lot of bad moments in the history of this country," said Carlos Ricardo Santistevan, 72, a retiree waiting in the rain outside a downtown bank in what he said was his 4th attempt to collect his pension for December. "But this situation is the most absurd. And it's entirely the work of our incompetent and corrupt leaders."...
[Does not bode well for Massachusetts, with 'Little Dictator' Finneran and the patronage slugs on the board of Massport, famed for running Logan Airport where both the 9/11 'billets doux' to NYC originated (see yesterday's "Patronage seen stifling board that runs Logan Airport," by Sean Murphy, 12/31/2001 BG, B1. Back on 1/1/2002 in the NYT, we get a little blowout about Argentina on page A3 too -]
Tax system in need of reform, pointer blowout (to C1), NYT, A3.
There are no easy answers for Argentina in the short term.
[Sure there are - share the vanishing employment by cutting the 1940-level workweek, and thereby integrate people on the principle of 'everyone sacrifices together' - instead of the top brackets yanking as much money as they can out to overseas bank accounts - and activate the spending power of the nation by spreading it as widely as the newly shared employment and skills. Timesizing is the most gradual, flexible and market-oriented design for doing all this. Here's some of the tax article -]
Reviving Argentina: The trouble with taxes, by Daniel Altman, NYT, C1.
Having stopped payments on its public debt of $132B, Argentina sits mired in an enormous crisis of economic confidence.... But...Roger Scher, lead sovereign analyst [what the hell is THAT?!] at Fitch IBCA, the credit rating agency...said..."Argentina, from 1991 to 1997, was one of the fastest-growing countries in the world"...yet the government ran a deficit for every one of those years. Noncompliance with the tax laws - a combination of evasion and arrears - is a big cause of those deficits.
Between stints at the IMF, Carlos Silvani ran Argentina's tax agency from 1998 to 2000.... Before the [Argentinian] peso was fixed to the [US] dollar in 1992, rapid inflation meant that delaying a tax payment would sharply lower the real value of the [tax bill]. Even since then, Mr. Silvani said...prosecuting tax evasion cases takes the tax agency 10 years or more.... "When justice is so slow, in practice there is no justice."
[And there's another problem familiar to Americans -]
...Manuel Castilla, a fiscal expert at..\..the Inter American Development Bank [IADB]...said..."In my personal opinion, this is the most complicated tax system I'd ever seen."... Poor public services have contributed mightily to Argentines' [meaning "Argentinians'"] disaffection, according to..\..Alberto Ades, who analyzes Latin American economies for Goldman, Sachs.... As evidence of Argentines' disillusionment with government, Mr. Ades noted that one-fifth of the population did not vote in the nationwide elections in October, and an equal proportion deliberately spoiled their ballots. In the previous year's elections, 3.6m more people cast their votes....
[Work sharing has a powerful integrating effect on people. Check out the esprit de corps and mutual loyalty at worksharing firms like Nucor and Lincoln Electric. But is all this blaming taxes just Americans sloughing off blame onto Argentinians? Paul Krugman seems to think so -]
Crying with Argentina - Disaster for them - and for us, op ed by Paul Krugman, NYT, A23.
...Now Argentina is in utter chaos - some observers are even likening it to the Weimar Republic.
[In Germany in the early 1920s when the monster Stinnes engineered hyper-inflation to enrich himself and starved thousands of people on fixed incomes - see Max Shapiro's "Penniless Billionaires" (1980). Not that Argentina has the hyper-inflation, just the "utter chaos."]
And Latin Americans do not regard the United States as an innocent bystander. I'm not sure how many Americans, even among the policy elite, understand this. The [Americans] who encouraged Argentina in its disastrous policy course are now busily rewriting history, blaming the victims.
[E.g., of tax evasion? But what was this disastrous policy course that Krugman credits with Argentina's disaster?]
..\..Argentina, more than any other developing country, bought into the promises of U.S.-promoted "neo-liberalism" (that's liberal as in free markets, not as in Ted Kennedy). Tariffs were slashed, state enterprises were privatized, multinational corporations were welcomed, and the peso was pegged to the dollar. Wall Street cheered, and money poured in; for a while, free-market economics seemed vindicated....
Then things began to fall apart. ...The 1997 Asian financial crisis had repercussions in Latin America, and at first Argentina seemed less affected than its neighbors. But while Brazil bounced back, Argentina's recession just went on and on.
...Argentina's slump...had more to do with monetary policy that with free markets. [Oh yeah?] But Argentines, understandably, can't be bothered with such fine distinctions - especially because Wall Street and Washington had told them that free markets and hard money were inseparable. Moreover, when the economy went sour, the IMF - which much of the world with considerable justification views as a branch of the US Treasury Dept. - was utterly unhelpful. ...IMF officials, like medieval doctors who insisted on bleeding their patients and repeated the procedure when the bleeding made them sicker - prescribed austerity and still more austerity, right to the end....
What happens next? The best hope [is] an orderly devaluation, in which the government reduce[s] the dollar value of the peso and at the same time convert[s] many dollar debts into pesos....
[Sounds pretty superficial to us.]
But that now seems a remote prospect. [Just as well - ed.] Instead, Argentine's new government - once it has one - will probably turn back the clock. It will impose exchange controls and import quotas, turning its back on world markets....
[Ah, maybe it's just putting world markets on hold? Sort of like a basketball player who breaks his leg takes a few months off from the court?! It's quite beyond us why guys who are against communism and for private property among individuals today do a flip and are pro communism ("free trade") and against private property ("no tariffs!") on the inter-economy level.]
And let me make a prediction: these retrograde policies will work, in the sense that they will produce a temporary improvement in the economic situation - just as similar policies did back in the 1930's....
[In fact, President Hoover even imposed a complete moratorium on immigration early in 1930. But Krugman still hasn't got below the surface. He's still oblivious to the fundamental contradiction fragging economies around the world - how can we keep introducing worksaving technology and laying off people and still have any markets left? The answer is Timesizing, Not Downsizing.]
Earlier Y2000 months accessible via links at bottom of Dec.1-10/2000 page.
Earlier 1999 months accessible via links at bottom of Dec.1-15/99 page.
Earlier months accessible via links at bottom of Dec/98 page.
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