Monday, January 14, 2002

Enron Endgame II- Trashing the War Hero I don't want to unduly start up the usual elite media-bashing game, but I sense that a lot of reporters are tired of saying nice things about President Bush. Much of their criticism of the president was muted, magnifying little linguistics issues and being too pessimistic about the war prospects. Now that there is a lull in the war, the Washington media are saying to themselves, "Being nice to Dubya's no fun, you don't get Pulitzers for sucking up to a Republican. What can we do that's fun and a good career move? OH YEAH, Enron! Target acquired, canards locked and loaded!" I'm going to try to identify a few of these canards. 1: Deregulation caused the Enron crash and Republicans are to blame for deregulation. Last I checked, the Democrats ran things from '93-'00. Granted, there was some key deregulation at the end of Bush pere's administration. NPR made a big deal last week of Wendy Gramm pushing through energy futures deregulation as she left in '92, only to show up on Enron's board. However, I haven't seen anything that suggests that deregulation caused the Enron collapse. The S&L industry in the 80s was much more regulated than Enron, yet there was a large amount of economic carnage in that industry. Regulation of an industry doesn't necessarily protect firms. It was overleveraging and actionable fraud that brought Enron down, not deregulation. 2: Enron contribution to Bush got Enron special access, thus corrupting the process. Not in this case. The Bush team seems to have ignored pleas to help. Even Robert Rubin, a Clinton Treasury secretary, was calling on behalf of Citigroup, his new employer and major Enron debt-holder, trying to cover their assets. 3. Contributions=Corruption. There are two ways donations can be seen. The first is for donors to give money to candidate who support their views. The donor doesn't want the candidate to change what he's doing, but wants the candidate to have a better chance to convince voters that they're the person for the job. The second is a de facto bribe, getting a politician to change his position on an issue in order to get campaign money, or at least insure that his calls are returned. The liberal thought is this- Enron wants deregulation, donates money to Republicans (reality check:Democrats too) causing them to want deregulation. The alternative thought is that Republicans want deregulation and so does Enron, so Enron gives to Republicans (or friendly Democrats) to help get a pro-deregulation guy elected. None of these three will stick for long, but our buddies in the fourth estate will give it a shot. It could be a slimy spring.

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