Remora

Campaign finance reform. Lives there a man with heart so dead, that to himself he has not said, I don't give a good goddamn about campaign reform? It is the kind of issue favored by newspaper editors, and the H.L. Mencken part of my heart already finds that suspicious or, what is worse, laughable. On the other hand, my hero, Ralph Nader, loves it. So why does Limited Inc feel mal de mer every time the subject comes around?

It isn't that we think campaigns can't be regulated. Politics is a market, and markets are necessarily subject to regulation of one kind or another, as previous posts have abundantly announced. Our idea is that, before we talk about amounts of money, we talk transparency. Transparency is a condition for understanding just how the market works -- and that primitive condition is still not met in politics. We think that disclosure laws that would force politicians who vote for, say, softening laws on tax havens, to list those contributors to their campaigns who might benefit from such votes would be a nice start. This is easier to do now than every before -- computers could easily match lists of contributors to votes which effect contributors. The kind of accounting Enron encouraged is the kind that goes on in D.C. every day -- with lobbyists acting as secret partners, and the trades being in bill writing, an art that exists at one remove from pick pocketing.

And another thing. There should definitely be firewalls between working for the guv and working for lobbying groups. That Wendy Gramm could quit heading the Commodity futures trade commission and blithely skip to a job at Enron should, obviously, be illegal. Corporations do this all the time -- they hire their head management honchos with clauses in their contracts specifying that the person hired is not allowed to work for a competitor for a certain period if the person quits. Government contracts for people who have the power that Ms. Gramm had should simply have the same wording.

But as for thinking that campaign finance reform will produce less bribed executive, legislative and judicial branches -- the politics of bribery begins with the composition of the executive, legislative and judicial branches. These folks have been ideologically bribed long before they fill their pockets with lucre. Who do they know? Who do they talk to? They know and talk to the most privileged. Most politicos, in their mothers' wombs, were already stewing in the greed, the overbearing self-righteousness, the hypocrisy, the slickness, that makes them what they are to mankind -- a species of Cain somehow come among us to rule over us with cliches, windiness, and that vile slogan in their hearts, am I my brother's keeper?

Okay, Limited Inc is going too far. Invective is one vector into fascism, and we have noted that, lately, we have tended to the intemperate. A-and we certainly prefer yahoos to Houyhnhnms when it comes to picking masters. But the point is: in politics as in any other area of life, rules are no substitute for content. The alienation of the great middle mass of Americans, struggling with credit cards, love, family, hope, labor and all the rest of it, has been built up from over two decades of the state's relentless war against its weakest members, and to do something about that, we need, well, the politics of content, not the politics of process.

That said, there is comic potential in the upcoming house fight about campaign reform. Common Cause, a sturdy soldier in this endless war, has published a nice survey of upcoming legislative follies. Here, for instance, is an addendum to the campaign finance bill sponsored by some Ohio republican named Ney:


The Ney bill purports to cap, rather than ban, soft money at $75,000 per corporate, union, or individual donor per party committee per year. Because both of the political parties have three national committees, a single donor could give $225,000 in soft money to the party of their choice each year. The same donor could, as many donors do, decide to give to both parties - and Ney-Wynn would allow one donor to give $450,000 if they spread their contributions around in $75,000 increments to the six national party committees. In a two-year cycle then, any corporation, labor union, or wealthy individual could give $900,000 in soft money in an election cycle.

But the Ney bill only proposes this so-called "cap" for the national party committees, and would encourage donors to give unlimited amounts of soft money to state party committees which would be free, under Ney, to launder this money into any federal election.

Under Ney-Wynn bill, a single donor could give $900,000 to the parties in an election cycle, and then give unlimited amounts to a state party committees if allowed by state law. By encouraging donors to steer excess soft money to state party committees, Ney-Wynn has the added negative effect of making it harder to have full disclosure of exactly who is funding a particular candidate's campaign. And unlike Shays-Meehan, the Ney bill would let federal officials - like the President, Vice President, or any Member of Congress - solicit any of this soft money personally."

Remora

Limited Inc had beer last night with a faithful reader, who made comments about Limited Inc's Enron obsession. The hint over the table was that we are becoming, shall we say, a little tedious on the subject. Without, this reader also implied, being particularly acute.

Well, that hurts. We are drawn to this story for the same reason a shark is drawn onward by the thrashing of the wounded swimmer -- it is the frenzy of instinct, against which man and beast strive in vain. We are, after all, caught in the net of our blood before we are caught in any other net, God help us all. Given our limited resources, we can't sift through documents given to us late at night by anonymous sources, but we have hoped to develop, for our readers, a sense of the connections between politics and the liberalized financial markets that are sometimes not adumbrated in the daily paper. The daily paper, after all, has to have room for the funnies, and often seems to pitch its prose to the level of your average reader of Beetle Bailey, and the precincts of the night in which oil forwards are traded between punks in highrises might disturb such a reader -- worse, might cause his eyes to glaze over.

Turn to James Ridgeway's column in the Village Voice this week. Here's a trail which surely needs scouting down:


"One unexplored approach to unraveling the Enron scandal may lie in the company's use of offshore tax havens, which have scant banking-disclosure laws. The company had over 2800 subsidiaries, some 800 of which were headquartered in nations officially designated as tax havens, including the Cayman Islands. In its lengthy study of Enron, the watchdog Public Citizen argues that by stashing money in this myriad of subsidiaries, Enron could conceivably hide from a growing list of creditors as well as U.S. tax investigators. Indeed, Enron appears not only to have paid no taxes for four of the past five years, but also may have been eligible for hundreds of millions in refunds."

[-- next graf: The Clinton administration tired to pressure the tax havens}

"With Bush, everything changed. Less than a month after his inauguration last year, his Treasury announced the Clinton deals had been placed under review. Last spring the administration told OECD that it wouldn't be going along with the Clinton agreements. Instead, on November 27 of last year, in the midst of the gathering Enron scandal and a few days before the company formally filed for bankruptcy, Treasury Secretary Paul O'Neill said the Cayman Islands had agreed to start cooperating with U.S. investigators in 2004. That might sound tough, but it actually gives Enron and other companies a 25-month breather to clear the decks and find somewhere else to stash their money. Even then, as Manhattan District Attorney Robert M. Morgenthau charged, the Cayman Islands could back out of an agreement with three months' notice and suffer no repercussions."

The Bushies must be aware that the Cayman deal could blow up in their face. Here's a typical ass covering story from that front:

It isn't clear if Enron Corp.'s use of Caribbean tax havens is linked to the illicit financial activities that the U.S. is seeking to crack down on through tax treaties with offshore financial havens, U.S. Treasury Secretary Paul O'Neill said Friday.

"It's not clear that it's related in any way to the issue of illicit financial activities," O'Neill told reporters when asked whether he was worried about the use of offshore subsidiaries by bankrupt energy-trading giant Enron

What isn't clear to O'Neill could be clarified, with high resolution intensity, by a congressional investigation with teeth.

Remora

Limited Inc can't remember - was it T.S. Eliot who said that every strong writer creates the tradition he follows? By which he meant that literature is not sequential, even if its chronology, by mundane necessity, is. A writer picks out, from the vantage point of those instincts found in his prose, those of his predecessors who tended towards him. Blake thought the same thing - Milton dreamed of Blake, and then Blake dreamed of Milton. Mixing memory and desire indeed.

Well, the same can be said for �. economic history. When bubbles are blowing, the historians turn a revisionist eye on previously dissed speculators. In the nineties, there was an outpouring of sympathy for, of all people, J.P. Morgan. So cultured! So right, so often! This acquisitive weasel, this man whose name was rightly cursed by every farmer and Pullman porter in the 1890s, the classic photograph of whom, stick raised, WC Fields proboscis burning, pig like eyes shining with malice and outrage, was muckraking enough. There's a nice review of the Strouse bio in the TNR which takes the reasonable tack that the rich are rare, and that their interests might not be the interests of their servants and others not so gifted with the Midas touch. Upstairs is not downstairs. For Strouse, and for her readers no doubt, dear Pierpont turns out to be less ogre than Clinton Democrat avant la letter, managing us into the tiered prosperity we so knew and loved during the boom and boomer years.

It has been the same story with the flood of dreary CEO autobiographies, a nineties genre to which any decent man would prefer seventies porn. This mass of self congratulation culminated with Jack Welch's this year. These CEOs believe their ghostwriters and pr men - they believe that leadership is a secret, yes, that it exist behind door number one in their ever so sharp minds. To read them, one would think that they all possess the magnetism of Rasputin, and the chess playing skills of Morphy. The deluded leading the manic - isn't this what irrational exuberance is all about? Give your leadership stock options and watch your accounting standards become all mysterious. Because the thing is - when you depend on those options, you are going to make the prices jump come hell or high water. And then you can refer fondly to those numbers in your book - proof positive that your secret skills were ace!

Jack Beatty has a little review in the Atlantic of a book about an earlier kind of titan - guys who made their money leading corporations that made things. Not financial innovators of Morgan's type. Yes, I know, curious as that sounds in our asset-lite corporate era. Curious as that sounds when the punchline is - you are in the business of selling information. This earlier group was a nasty bunch. Some of them were clearly bonkers. But they were all much more interesting than a dozen Jack Welches. Their very cruelty was spacious.

Here's a beautiful story about Henry Ford.



"Henry Ford persecuted initiative. Returning from a trip to Europe he discovered that his engineers had made small improvements to the Model T. "It was a better, smoother-riding vehicle, and his associates hoped to surprise and please him," David Halberstam writes in The Reckoning.

Ford walked around it several times. Finally he approached the left-hand door and ripped it off. Then he ripped off the other door. Then he bashed the windshield. Then he threw out the back seat and bashed the roof of the car with his shoe. During all this time he said nothing. There was no doubt whose car the T was and no doubt who was the only man permitted to change it."

Remora

The Financial Times is pleased that Joe Lieberman is leading the Senate investigation into Enron. He will lead it quickly, sensibly, painlessly ... nowhere. Lieberman is a centrist, or perhaps it is better to say self-centrist, Democrat. Supposedly, he sees himself as the next president. His philosophy is to the right of Nelson Rockefeller -- which is why you can bet that nothing he uncovers with the Enron probe is going to rock his support for deregulation. The FT comments that many were dismayed to see him tugged leftward as Al Gore's vp -- yes, all that radical mouthing on maintaining the surplus. Emma Goldman returns, talking them fiscal prudence blues. Or was this Herbert Hoover in his itchier hours? Emma, to tell the truth, might have spit. Anyway, the FT is confidant that Lieberman will sink the Enron inquiry under so many fathoms of technicalities, long winded spiels, and his trademark rebarbative moralizing, that it will do minimum harm to Bush. Limited Inc agrees. Here's the final three grafs:

"But since then [the election of 2000], the pro-free-trade, pro-business message of New Democrats has again become one of Mr Lieberman's main calling cards.

For that reason, many Democrats hope Mr Lieberman gives them the patina of credibility that a more leftist, business-bashing member of their ranks would not. "Joe is the best possible person to have in the lead slot," says one senior Democratic policy adviser. "He will not conduct a witch-hunt."

To some Democrats, who would like to see a little more Republican blood on the floor, that is not ideal. But, with both parties feeling the political heat from the bankruptcy, it may be the most sensible approach."

Remora


The nineties have yet to earn a definitive moniker as a decade. Limited Inc. suggest that it be called the New Math decade. Remember, a few years ago, the dispute over metrics? Okay, those of you who weren't swept up in the Net biz bubble might not remember the dispute over metrics, or care, but for a while, the argument, made by highly paid stock analysts, was that the metric that counted was not quarterly earnings, which had the mildewy, moth ball scent of Old Economics. No, we were another generation, and we wanted the more intangible numbers associated with number of hits, or expected number of hits, or the amount of energy, in watts, given off by the synergies and efficiencies the disintermediation of commodities effected in Seattle on an average Wednesday. Etc. Numbers suddenly became ineffable. They were so impressive, the new numbers - the sudden spike in productivity if you jiggered the way you measured it, the trickle down that was finally sticking in the average household, the wondrous surpluses. Here, finally, was the justification for every gutted social service. Ah those numbers ... too bad they were so, uh, wrong. The homework was turned in, and now we are turning it back with red marks scrawled across it. Listen to the sound of tumbling dice in this story from the AP:


"Federal surpluses over the next decade have plunged 71 percent from last year's estimates and annual deficits are back for the next two years, says a new congressional forecast that heralds a budget squeeze sure to color this fall's elections.

The nonpartisan Congressional Budget Office estimated on Wednesday a 10-year surplus of $1.6 trillion, a staggering $4 trillion less than the $5.6 trillion the office estimated only a year ago. Both projections by CBO, Congress' official budget analyst, are for 2002 through 2011, and assume no changes in current tax or spending programs."

The Center for Budget and Policy Priorities issued a report a few days ago foreshadowing the CBO report. It analyzes what happened. Here's a long three grafs from that report:

"A tax cut reduces federal revenues and thus reduces projected budget surpluses. Similarly, increases in funding for federal programs boost federal expenditures and thereby reduce the surpluses. The decreases in revenues and increases in expenditures that occur as a result of a recession also shrink the surplus. In each of these cases, the reduction in the surplus results in an increase in the federal debt, compared with the level of debt that CBO had assumed in its previous budget projections. This increase in the debt automatically causes federal interest payments to rise, since interest must be paid on a higher level of debt. Moreover, the increase in the amount the federal government must pay in interest itself causes the surplus to shrink further. The new CBO estimates are likely to show that interest payments on the debt will cost the government roughly $1 trillion more between 2002 and 2011 than CBO projected just one year ago.

These increases in interest payments are a major factor in the deterioration of the surplus. To measure accurately the budgetary consequences of a tax cut, a spending increase, or any other change in the budget, one must include the resulting increase in interest payments caused by the tax cut, spending increase, or change in economic or other conditions.

The third trap that can lead to misuse of the CBO numbers occurs when someone includes the resulting increase in interest payments when measuring the effect on the surplus of some budget changes � such as the reduction in revenues and increase in expenditures that has occurred because of the recession � but then excludes the resulting interest increases when measuring the effects of other budgetary changes such as the tax cut. Such inconsistent treatment of interest payments leads to apples-to-oranges comparisons when assessing the relative impact of various factors on the change in the surplus."

Well, the CBPP, being properly wonkish, doesn't go for the jugular about the CBO projections. We will. Being 71 percent wrong on your projections gives you, what, a D? no, surely an F, here. It's one of those who-flicked-the-switch-on-the-Chernobyl- control-board kind of mistakes. In a more rational world, the admission that one's projections were that far off should lead to peremptory firing. At the very least, we should pack up the CBO, lock stock and barrel, and send it to Houston, to work with their confreres in the Arthur Andersen office. This is what comes of having a politics in total disconnect with reality: a presidential election fought over prescription drug prices for the Floridian elderly, an issue that burned out December 17, 2000; a tax cut using figures so wildly off that they are more like dreams of a madman; and a President who has decided that his best strategy, as the economy continues sour, is to remind people that there's a war on. But like all disconnects, there's a purpose to the politics of illusion -- the purpose is to reward the haves, at no matter what cost to the country.

Remora

The prophets of Baal.

Elijah was one of the more sensible prophets in the Old Testament, combining Houdini's magic tricks and Commandante Marcos' light show of manifestos and media bravado. Plus he had an experimental attitude rare among the credulous prestidigitator set, dimly foreshadowing Bacon's aphorism: : "...in the true course of experiment, and in extending it to new effects, we should imitate the Divine foresight and order. For God, on the first day, only created light, and assigned a whole day to that work, without creating any material substance thereon. In like manner, we must first, by every kind of experiment, elicit the discovery of causes and true axioms, and seek for experiments which may afford light rather than profit."

It was in this spirit Elijah devised the first consumer comparison test. Here's the passage from Kings 1: 18:

19: Now therefore send, and gather to me all Israel unto mount Carmel, and the prophets of Baal four hundred and fifty, and the prophets of the groves four hundred, which eat at Jezebel's table.
20 So Ahab sent unto all the children of Israel, and gathered the prophets together unto mount Carmel.
21 And Elijah came unto all the people, and said, How long halt ye between 1two opinions? if the LORD be God, follow him: but if Baal, then follow him. And the people answered him not a word.
22 Then said Elijah unto the people, I, even I only, remain a prophet of the LORD; but Baal's prophets are four hundred and fifty men.
23 Let them therefore give us two bullocks; and let them choose one bullock for themselves, and cut it in pieces, and lay it on wood, and put no fire under: and I will dress the other bullock, and lay it on wood, and put no fire under:
24 And call ye on the name of your gods, and I will call on the 1name of the LORD: and the God that answereth by fire, let him be God. And all the people answered and said, It is well spoken.
25 And Elijah said unto the prophets of Baal, Choose you one bullock for yourselves, and dress it first; for ye are many; and call on the name of your gods, but put no fire under.
26 And they took the bullock which was given them, and they dressed it, and called on the name of Baal from morning even until noon, saying, O Baal, hear us. But there was no voice, nor any that answered. And they leaped upon the altar which was made.
27 And it came to pass at noon, that Elijah mocked them, and said, Cry aloud: for he is a god; either he is talking, or he is pursuing, or he is in a journey, or peradventure he sleepeth, and must be awaked.
28 And they cried aloud, and cut themselves after their manner with knives and lancets, till the blood gushed out upon them.
29 And it came to pass, when midday was past, and they prophesied until the time of the offering of the evening sacrifice, that there was neither voice, nor any to answer, nor any that regarded.

Now, readers, you know that Jehovah was on point that day. The Lord of Hosts rose to the experimental task, and sent flame down to the altar. The conclusion of the story is this:

"And Elijah said unto them, Take the prophets of Baal; let not one of them escape. And they took them: and Elijah brought them down to the brook Kishon, and slew them there."

Why is Limited Inc delivering this sermon? Trust me, reader, to have an (eventual) point. The prophets of Baal are still with us, and still calling for the sacrifice of the children. But they have a different name today: they are called, for instance, Chicago School Economists. And they are also averse to experiment, when it conflicts with theory. They would as easily explain the failure of divine conflagration as they explained the debacle of energy deregulation in California: it is always a matter of not having deregulated enough. And their numerous failures aren't succeeded by a healthy hacking up on the shores of the brook Kishon, but by commentary on Fox TV stuffing the worship of Baal down the people's throats. In numerous forums the Jezebels of the right would attack all Elijahs as essentially treasonous liberals, and King Ahab, no bright bulb he, appoints, as ocassion arises, commissions made up of prophets of Baal to investigate the bankruptcy of Baal.

Bringing us to Larry Eliot's column in the Guardian. It begins with a nice graf about the current state of inequality :

"Everybody knows that the world isn't fair. Inequality is part of the human condition. Always has been, always will be. What has never really been clear is just how unequal life is. Now, thanks to an economist at the World Bank, it is clear. The richest 50m people, huddled in Europe and North America, have the same income as 2.7bn poor people. The slice of the cake taken by 1% is the same size as that handed to the poorest 57%."

Ah, the prophets of Baal squeak, just think what would happen if those 50m people didn't have their wealth! Why, the poorest 57% would be getting no drippings at all!

In light of the recent plummeting of Argentina (a paradise of Baal theory) and Enron (a company that "got it"), the Baalistas should be on the defensive. They aren't, however, having the utopist's immunity to the evidence of the senses. Eliot's column goes on to compare Australia and New Zealand. Although it isn't well known in this country, New Zealand experienced the shock therapy of Thatcherism in the most thorough manner in the 80s:

"Starting in 1984, the country's Labour government said that this all had to change. It started by deregulating interest rates, removing international capital restrictions, floating the currency and removing agricultural subsidies.

Having got the taste for change, it then scrapped regulations on business, abolished import quotas, enshrined price stability in law as the sole object of monetary policy, forced workers into individual contracts, announced that budget deficits would eventually be banned, cut income taxes and slashed welfare benefits. This was not a detox regime: it was cold turkey."

Australia, on the other hand, didn't get it. It lumbered around in the Old Economy. It cut a little bit from its welfare state, it mouthed the usual claptrap about market solutions rather than government interference, and in the usual 80s manner the unions were undermined -- but not totally.

Well, children of Israel, guess what:

"The latest edition of Political Economy (Volume 14 number 1) contains a fascinating comparison of the track records of the two Australasian nations by Paul Dalziel, a New Zealand academic. His first conclusion is that New Zealand's living standards have suffered badly when compared to those in Australia." Dalziel quantifies "badly" like this: "... had output in New Zealand matched that in Australia, per capita incomes in New Zealand would have been almost NZ$5,000 (�1,473) higher by 1998 than they actually were. The cumulative loss to each individual was NZ$30,000 and the cost to the country was a chunky NZ$114bn."

And so it goes. Although we are supposed to be beyond all that crass class warfare stuff in the 21st century, class was never really abolished in the last twenty years. When we are asked to pursue economic policies that systematically benefit one class and systematically injure another class, we should recognize this advice for what it is: an old strategem in the old war of the ruling class against its subjects. It is a conflict that is not going to abate any time soon. I should point out that the parallel between the prophets of Baal and economists is not perfect. While the old style prophets "cut themselves after their manner with knives and lancets, till the blood gushed out upon them," the new style prophets prefer to practice their bloodletting upon entirely other bodies: preferably the work force.

Remora

Black and conservative...

There's a story in the NYT Magazine about Glenn Loury, the economist and former totem black conservative -- a position that has now fallen to Shelby Steele (and no, Limited Inc. means totem, not token). Almost all stories about Glenn Loury begin by a cursory survey of his ideas before jettisoning them for a more gossipy, and perhaps interesting, survey of his life. It is a life that Ellison, or Leon Forrest, might have written, literature loose in the wild hinterlands of America -- or perhaps not so wild, since Loury's lifeline goes from the working class South Side of Chicago to the Reaganite high of the 80s. Recently, Loury has defected from the conservative movement, even resigning from the American Enterprise Institute after they sponsored Dinesh D'Souza's book on race. Fair has this appraisal of the D'Souza book:

"... D�Souza advocates legalizing racial discrimination. "What we need is a long-term strategy that holds the government to a rigorous standard of race neutrality," he wrote in The End of Racism, "while allowing private actors to be free to discriminate as they wish." In D�Souza�s vision, "individuals and companies would be allowed to discriminate in private transactions such as renting an apartment or hiring for a job." Lest there be any doubt as to his intent, D�Souza states: "Am I calling for the repeal of the Civil Rights Act of 1964? Actually, yes."

Here's a graf from the the NYT Mag article that shows Columbus discovering the world is round:

"In a column called ''What's Wrong With the Right,'' published in the January-February 1996 issue of The American Enterprise journal, Loury wrote that while ''liberal methods'' on questions of race were certainly flawed, ''liberals sought to heal the rift in our body politic engendered by the institution of chattel slavery, and their goal of securing racial justice in America was, and is, a noble one. I cannot say with confidence that conservatism as a movement is much concerned to pursue that goal.''

When the Loury-D'Souza thrilla in D.C. was playing out, Paul Krugman wrote a sympathetic column about Loury in Slate. Krugman describes it thusly:


"But at some point Loury made the discovery that eventually confronts every honest intellectual who gets drawn into the political arena: The enemies of your enemies are not necessarily your friends. The Glenn Loury who wrote that 1976 thesis was not a conservative. He criticized the simplistic anti-racism of the liberal establishment because he wanted society to tackle the real problems, not because he wanted it to stand aside. His seeming allies on the right, however, turned out to be interested only in the critique, not in the next step. (According to Loury, "When I told one gathering of conservatives that their seeming hostility to every social program smacks of indifference to the poor, I was told that a surgeon cannot properly be said to have no concern for a terminally ill patient simply because he had moved on to the next case.") Loury found out that the apparent regard for his ideas by conservative intellectuals was entirely conditional. Any questioning of conservative orthodoxy was viewed as an act of betrayal, giving aid and comfort to the liberal enemy. It was the loyalty test all over again."

There is something very funny about the idea that intellectuals are above a loyalty test. Of course they aren't. Krugman, an exemplary Ivy League herd man who once had the audacity to question the free trade orthodoxy and retreated, precipitantly, from his own work once it got denounced by the right people, should know better. But the Krugman article does adumbrate Loury's original thesis better than the NYT Mag article, and that thesis is definitely interesting. Robert Sobel, the business history writer, made a point similar to Loury's in his last book, The Great Boom, when he described the foundations of the great American middle class in the post WWII period. The wealth of the great middle is founded, Sobel claims, in large part on property -- namely, housing. This is as true today as it was in 1952, despite 401K plans and other investments -- when you strip the wealth of your average bourgois down to its skivvies, you find an asset -- the great American home. Well, for thirty some years, that market was simply denied to blacks. Loury's original point, if Krugman is to be believed, is that past descrimination has effects on the present racial composition of wealth. Loury's sub-point is that the limit to Afro-American achievement is currently found in black behavior, rather than white racism. This point doesn't really follow, however, from his main thesis. It defines racism too narrowly, as merely a moral fact. It can't be emphasized enough that racism isn't simply unmotivated malevolence, a wallowing in hatred done by white men in KKK regalia. Rather, it plays a social function. It operates to give a definite economic lift to a certain segment of the populace. When that populace has incorporated its advantage over time, the advantage of overt racism diminishes. What guarded the white middle class in 1950 from competition can be cast off, as an unnecessary luxury, by that class' descendents, because the competitive edge has already been won. And of course I'm not even going to talk about the upper 5 percentile, the racial composition of which can be studied by looking at the pictures in Forbes magazines. If you see a picture of a black man or woman, it is almost always either a., an ad, or b., a picture of a grateful worker or manager posed with an indulgent CEO. What can't be questioned, once the hegemony of anti-racism as a feeling, rather than an economic factor, has been achieved, is the legitimacy of present gains, even though it has been admitted that those gains were the results of illegitimate means. In essence, you get the best of both worlds -- having renounced the devil of racism, one can feel that equal opportunity reigns, while at the same time one can enjoy the devil's bounty, in the form of ten generations of greater opportunity. As a game theoretical device, White America has played an unconsciously brilliant strategy. One even Krugman should appreciate.

Remora

Adam Smith has presciently analyzed the peculiar psychological defects of Limited Inc. in this passage in The Theory of Moral Sentiments, concerning passions that derive from the imagination:

"Even of the passions derived from the imagination, those which take their origin from a peculiar turn or habit it has acquired, though they may be acknowledged to be perfectly natural, are, however, but little sympathized with. The imaginations of mankind, not having acquired that particular turn, cannot enter into them; and such passions, though they may be allowed to be almost unavoidable in some part of life, are always, in some measure, ridiculous. This is the case with that strong attachment which naturally grows up between two persons of different sexes, who have long fixed their thoughts upon one another. Our imagination not having run in the same channel with that of the lover, we cannot enter into the eagerness of his emotions. If our friend has been injured, we readily sympathize with his resentment, and grow angry with the very person with whom he is angry. If he has received a benefit, we readily enter into his gratitude, and have a very high sense of the merit of his benefactor. But if he is in love, though we may think his passion just as reasonable as any of the kind, yet we never think ourselves bound to conceive a passion of the same kind, and for the same person for whom he has conceived it. The passion appears to every body, but the man who feels it, entirely disproportioned to the value of the object; and love, though it is pardoned in a certain age because we know it is natural, is always laughed at, because we cannot enter into it. All serious and strong expressions of it appear ridiculous to a third person; and though a lover may be good company to his mistress, he is so to nobody else."

This must explain Limited Inc.'s obsession with the Enron story, which has engrossed our mind to the detriment of our pocketbook this week. Instead of seeking the easy money of book reviewing -- ah, reader, you can't imagine the veritable Golconda awaiting the lucky reviewer of Blah Blah Blah, the novel -- Limited Inc has been morosely pursuing an article about Enron's business press fan club, and the myth of efficiency. This article, once finished, will be shopped around hopefully to such outlets as Mother Jones, only to be rejected out of hand -- we foresee this already. But, in entire disproportion to the value of our contribution to the national culture (which consists entirely in summarizing forgettable plot lines), we are going to run in the channel of our obsession with with the same grim vigor Ahab once devoted to revenging his lost leg.

In any case, Andersen Accounting is becoming the (hopefully first) collateral casualty in this affair. In much the same way the Taliban fell when the US took action against Al Quaeda, Andersen is being rocked by its long collusion with Kenny Lay's grand scheme to make Enron, in effect, a giant energy derivatives hedge fund. Since Enron was a public corporation, such a scheme is illegal. But illegality, as any respectable contributor to political parties know, is in the eye of the beholder. Or rather, a particular set of eyes -- those belonging to the lowest stratum of our society. Of course, you know who I mean. I mean Congressmen, Senators, and members of the Executive branch. The Times this morning has an article about Anderson's reach in Washington:

Auditing Firms Gaining Muscle in Washington
By STEPHEN LABATON

Here are two grafs:

At the height of the fight between the industry and Mr. Levitt in the second half of 2000, all the Big Five accounting firms sharply increased their political donations and spending on lobbying. Andersen doubled its lobbying budget, to $1.6 million.

The investment paid off.

Among other proposals, Mr. Levitt sought to prohibit an accounting firm from performing both accounting functions and consulting services for the same company. That proposal threatened billions of dollars in revenues at the Big Five firms, and their defeat of the proposals in 2000 illustrated the industry's growing influence in Washington. Had the Levitt proposals been in place, it would not have been possible for
Andersen to bill Enron $27 million for consulting services last year while also billing $25 million for audits

There is also an article about Andersen's largess on the Public I site. This article names names.



"Last year, SEC Chairman Arthur Levitt, Jr. proposed a rule that would have restricted the amount of non-audit-related consulting work that companies like Arthur Andersen and other Big Five accounting firms could do for their audit clients. Andersen opposed the rule, and hired the powerful lobby shop of Clark & Weinstock to argue its case.

Among the Clark & Weinstock lobbyists working Capitol Hill on behalf of Andersen were former congressman Vic Fazio (D-Calif.); Jim Matthews, former chief of staff to Rep. Thomas Manton (D-N.Y.); and Anne Urban, formerly Sen. Robert Kerrey's (D-Neb.) legislative director.

Under pressure from the Big Five, the Commission ultimately adopted a weak version of the rule that favored the accounting industry and left their consulting services virtually untouched. The rule required only the disclosure of how much money the accounting firm earned for consulting services from each company it audited. No limits were placed on the amount of money an audit firm could earn.'

Both Public I and the NYT share the idea that campaign finance reform would cure us of a corrupt legislature; a legislature that was forced to forego bribery would then tackle reforming the regulation of the auditing industry with its eyes righteously peeled for the the public good alone.

Limited Inc grants the argument against legalized bribery. But we have strong doubts about the political reach of campaign finance reform. The reason the big five auditing firms can basically run over the SEC is that there is no political base for reigning in the big five, or for reigning in Enron. Populism has abandoned its war against Wall Street. A feature of the American political scene since the 1870s, it dried up in the 1980s. It is now the common wisdom that Americans don't get 'excited' about such things as regulating auditors. No, Americans supposedly get more excited about the list of Airline hostesses in Gary Condit's little black book.

But this consensus is oddly ahistorical. If the farmers of Nebraska, in 1900, could get passionate about specie and the intricacy of gold-backed, versus silver-backed, currency, are their descendents, in Southern California, really so degenerate as to not understand or care about financial markets? On the contrary, I think they understand very well, when they want to. Certainly they are as affected by the allowance of gross corporate corruption as their great-grandpas were by manipulation of railroad stock. But the stomach for class warfare -- and make no mistake, reader, Wall Street has never been reformed without a strong whiff of gunpowder in the air -- has gone out of both parties. Does anybody seriously see the pitiable Joseph Lieberman, who is currently leading the charge against Enron in the Senate, as a potential Danton? He is the most piddling William Jennings Bryan ever thrown up by the centrist Democrats, making Limited Inc nostalgic for Dukakis, for Christ's sake.

The last sad remnant of populism, in fact, resides in the Republican party's intermittent appeals to Christian fundamentalism. I could imagine an opponent of Billy Tauzin making a good case with the voters that the man is owned by the companies he is supposedly investigating. I could imagine such a case catching on. But the case would have to overcome two formidable obstacles. One, the media is resolutely opposed to class warfare. Except for the tepid admonitions of editorialists to remember the neediest on December 25th, the press and tv aren't simply bribed -- they are literally owned and run by corporations, and the law among them is, do not stir up class warfare. Period. The other obstacle is that facing any group which has suffered a string of defeats. The audience for populism is defeatist. Street realism very wisely counsels cutting your losses -- for pursuing your losses very quickly takes you over the edge. It is that realism that keeps most people from the ballot box. Apathy is a wise choice when there are no real choices.

Remora

In a previous post, Limited Inc had speculated about the triangle between point a, the provision of a bill passed in December, 2000, that exempted energy trading from oversite by the commodity futures commission, b., the Gramms (Mr. and Mrs.) support for the bill, and c., Senator Gramm's retirement.

Limited Inc. stands corrected by an article in the Times this morning. Doing the calculus of sleeziness in the Clinton era, one should always include the Clinton variable: that if something looks reactionary, pandering, against the public interest, and connected to big money, Clinton will probably be behind it. And so it turns out on this bill, which set in motion the events that blacked out California while the bandits made out like energy companies... uh, I mean, while the energy companies made out like bandits. Two explicatory grafs:


"...in the latter months of 2000, both Gramms were frustrating the company's Washington lobbyists. Senator Gramm, for reasons unrelated to Enron, was single- handedly blocking a futures trading bill the company had dearly prized. And Dr. Gramm had complicated the bill's prospects with a scathing critique of some rules being prepared by her former agency.

The issue was eventually resolved in the company's favor; Senator Gramm lifted his objections to the bill after calls from Clinton administration officials and industry executives, including Kenneth L. Lay, Enron's chief executive, according to company officials and people involved in the bill. Once the bill became law the rules that Dr. Gramm opposed became unnecessary and were dropped."

Remora

Go when the going's good department

Perhaps now that Bushypoo has established himself as this generation's FDR, he should resign. That way, he'd not suffer the inevitable debilitating fall in polls and status that happens to all Bushes in office. The reason for that fall is that Bushes can only exist in a rare environment, one in which the air is constantly perfumed by millions of dollars. Usually that is no problem in the White House, where you can secretly confab with Ken Boy and co. on global warming and such, but sometimes a Bush is thrust out into the normal atmosphere -- especially when the Bush has to campaign, or meet with (ugh) environmentalists and those civil rights leaders -- and eventually the Bush starts to wilt and get all cranky.

As a monument to Bush idiocy, the NYT has a profile of SEC chairman Harvey Pitt today.
Here we have a fairly common specimen of the higher idiocy so typical of the nineties, when the word deregulation began to be confused with the word abracadabra. It should be said at the outset: regulation, or rules and norms, are going to emerge in any market situation. The question is who is going to make them, and how are they going to be enforced. If they are made by market makers -- if, for instance, Enron makes the rules about energy derivatives -- other market members are going to have to apply those rules, try to get around those rules, or cease existing in the market. The advantage of being a market maker consists in being able to make the rules. These rules can be formal, as in the rules the NYSE makes, or informal, as in the rules that emerge when banks invest in X company on the premise that X company will copy the rules of some successful Y company.

Now, deregulation as it applies to accounting entails ignoring that the rules are going to be made, and claiming that only the government makes rules. Error one. Error two consists of the ideological claim that government is always bad. This claim has become theological. In spite of the evidence that, for instance, publicly run power companies do a comparable or better job than private power companies (compare LA's public power company to Southern Edison, if you want immediate support for this claim), this is the conservative mantra. It has the same relationship to reality as the doctrine of original sin has to psychology: it magnifies an insight into an untruth. Combine these two errors and you get Harvey Pitt.

Lets say some exciting things about accounting, shall we?

Since accounting on the Ernst and Young level is not heavily competitive, this means that the five market makers basically decide what the rules are. And they obviously suck at it, for the good reason that rules that promote transparency are not necessarily rules that all of their clients want to see followed. Gresham's law, which says that bad money drives out good, applies to rules as well. So hey, guess what? This is where a neutral party, ie the gov, has a role. It establishes the ground rules for all parties. This is elementary Locke, but seems to have escaped the attention of the greedy deregulatory crowd.

Here are three grafs from the NYT article. Reading them, it is easy to see that the Bush years are going to be studded with Enrons. These people have that deadhead Texas wealth mindset, the kind that the Hunt brothers used to embody:

"Since his return to the agency last September, Mr. Pitt has articulated a broadly deregulatory agenda that he says is now more relevant than ever, but which his critics say may now be overshadowed by what is quickly turning into a major accounting and corporate scandal.

If anything, the critics say, in light of more than $60 billion that Enron shareholders lost, it is time not to reduce the liabilities of auditors and corporations, but to increase them.

The S.E.C. for months has been woefully short of staff at its senior level and now has only two commissioners, including Mr. Pitt, because the White House has failed to nominate other replacements. The other commissioner, Laura S. Unger, who is also a Republican, is serving even though her term has expired and she has announced her intention to leave shortly."

Remora

Griboyedov.

Limited Inc imbibed Dostoevsky with our mother's milk, and have contemplated, for years, a sequel to the Underground Man entitled the Upside Down man (autobiographical, of course); Tolstoy was an event in our spiritual life that took two good years (20-22) to get out of the system, two years we will never get back, mind you; we've been a fan of Sologub's Petty Demon forever, The Master and the Margarita is one of the ur-texts in our inner cranial library, we've taken a prose style, down to dashes and parentheses, from Bely, we've read all the Nabokov one mortal could stand, Babel is a hero, Mandelstam and his wife are heroes -- what we are saying is that we are Russian out the ass. Always have been. But Griboyedov is pretty much a new one for us. So we enjoyed this Financial Times review of his biography. Griboyedov is known for one play. Apparently, that play is the Russian equivalent of Moliere's Misanthrope. But the review necessarily can't linger over the joys of a play that all seem to agree is inaccessible in English, so it quickly passes on to Griboyedov's very active life, spent as bon vivant, duelist, revolutionary of a sort, Arabist and Persianist, and diplomat. A full bill, this guy. We especially like knowing that, far from being an aberration, hostage crises at embassies in Teheran are folklore, like spelling bees and recitations of epic poetry. It seems that in 1829, a mob of angry Persians attacked the Russian embassy because, well, they were Russians, the stealth empire -- moving then, as it will always move, discretely in all directions. Our Griboyedov, Minister Plenipotentiary of the delegation there (and who knows what that meant, given the European propensity for scheming) was stabbed to death, his body paraded through the streets, members of the general public invited to do their patriotic duty and spit upon it. Another artist bites the dust.

A pity. Griboyedov is definitely my sort of guy. Here's two grafs from the article, which explain how he ended up in Teheran in the first place:

"Although his work in the theatre was increasingly successful, and he began serious study of Arabic and Persian, he paid a high price for his friendships with those richer and sillier than he. The scandal involving two young toffs from smart regiments, one 18-year-old ballerina and our subject sounds like something from light opera, but its consequences were deadly serious: Griboyedov was forced to take part in a partie carree, or four- sided duel, that left one of the challengers dead in the snow and the other participants exiled in disgrace by the Tsar.

His particular punishment - despite his pleadings that an artist such as he could not exist without "enlightened people, and sympathetic women" - was to be sent as attache to the first permanent Russian mission in Tehran."

Enlightened people and sympathetic women -- boil the bones off civilization, and this is what you have left --the base and bones of it. Griboyedov, mon frere, we salute you, who cry out for a few enlightened people, and a sympathetic woman or two!

Remora

Why do they hate us department.

Limited Inc means the CEOs of major corporations. And the us in question are the poor sweating masses who labor, pay taxes like suckers, and regularly get shellacked on both ends -- corporations who claim that utter faith in the market should prevent any government interference in spreading their costs to third parties (witness revelations about Monsanto's pollution fiesta in a small Alabaman town in the WP:

In 1966, Monsanto managers discovered that fish submerged in that creek turned belly-up within 10 seconds, spurting blood and shedding skin as if dunked into boiling water. They told no one. In 1969, they found fish in another creek with 7,500 times the legal PCB levels. They decided "there is little object in going to expensive extremes in limiting discharges." In 1975, a company study found that PCBs caused tumors in rats. They ordered its conclusion changed from "slightly tumorigenic" to "does not appear to be carcinogenic.") or going about their financial actions with riotous abandon of pirates on board a ship full of nuns, as in the case of 'Ken Boy''s company; and then, when downside time hits, those same corporations racing for the government tit, in a scramble that makes old Gipper Reagan's legendary welfare queen look like a piker.

Paul Krugman's op ed in the NYT this morning can be summarized in the words of that old Beatles standard: have you seen the little piggies/in their starched white shirts... In the last administration, the donors list revolved through the Lincoln bedroom as though Mr. and Miz Clinton were running a bed and breakfast for cheesy tv producers on federal time; in this administration, forget the bedroom. Give em a cabinet post, give em offices, give em lax or no enforcement of anti-trust regulation, give em the store, the keys, the ear of every policy maker cranked out by some crackpot rightwing thinktank. With so many friends in high places -- like Cheney, who believes an energy crisis means power company equities aren't achieving the cap levels his broker tells him they should be -- this country is being run openly as a country club for the rich, with tax breaks to fatten up the portfolios of the undeserving upper 5% in a public policy version of some Scrooge's wet dream.

Here are one and a half grafs:

"The real questions about Enron's relationship with the administration involve what happened before the energy trader hit the skids. That's when Mr. Lay allegedly told the head of the Federal Energy Regulatory Commission that he should be more cooperative if he wanted to keep his job. (He wasn't, and he didn't.) And it's when Enron helped Dick Cheney devise an energy plan that certainly looks as if it was written by and for the companies that advised his task force. Mr. Cheney, in clear defiance of the law, has refused to release any information about his task force's deliberations; what is he hiding?

"And while Enron has imploded, other energy companies retain the administration's ear. Just days before the latest Enron revelations, the administration signaled its intention to weaken pollution rules on power plants; late last week it announced its decision to proceed with a controversial plan to store radioactive waste in Nevada. Each of these decisions was worth billions to companies with very strong connections to Mr. Bush."

Remora

Limited Inc. was temporarily out of our gourds, this morning. Look, once you settle on a term, it sticks -- like a bad tattoo, maybe, but so it goes. So we apologize to our many constant, passionate readers for this aberration, and hope we haven't harmed our brand. We are going to focus group about that, later.

Will Hutton has a very enjoyable time knocking around that old corrupt mushball, Enron, in his Guardian column. Most startling graf in the column is not in the bludgeoning of America's political culture, but in the dissing of American productivity. Could this be true?

"... Enron could not have made the progress it did without the intellectual backdrop that all regulation and taxation is bad - and that the more the US deregulated, the better its economy performed. This was, and is, balderdash. Recent work by economists, notably at investment bank Credit Suisse First Boston, shows that after making the necessary accounting adjustments and including downward revisions, productivity growth in the US has done no more than match that in Europe. Indeed, countries like France and Germany have higher absolute productivity and faster rates of growth than the Americans, despite their approach to regulation and taxation. The deregulation philosophy that enriches Ken Lay and his cronies does not necessarily enrich anybody else. "

Well, we know last year was a spectacular for accounting revisions -- the capitalist version of redoing history, for which the Soviets used to be so reviled by right thinking rightwingers. Where's Trotsky, these rightwingers would cackle at the pap turned out by USSR history hacks that put Stalin in the catbird seat right next to his old buddy Lenin, and quietly whiteinked the more photogenic (and vastly more important) T. Increasingly, though, Soviet historiography looks like a method ahead of its time, especially for the clever accounting firm -- consulting with its right hand, and doing its books with its left hand. Erasing figures from photographs is one thing, but you need real skill to strip and recombine figures until they don't add up to themselves anymore -- yes, millions of dollars like Cheshire cats, appearing one year as four legged, tail twitching profit, and the next year as merely a fading smile.

Still, Europe has never been known for its accounting transparency. Steinherr, in his book on Derivatives (isn't tout le monde reading that adorable tome? right up there with Harry Potter in most homes), gives the example of Daimler Benz, which when it came to the states (had to, since it was swallowing Chrysler), had to comply with the US GAAP requirements, which is how we do numbers in the New World. German numbers showed a moderate profit, but sieved through GAAP, the company showed an immoderate loss.

So I'd love to know where this Credit Suisse study comes from. I'm not doubting Hutton, just wondering how to face this kind of revisionism.

Acoustic shadows

This is the new name Limited Inc has chosen to head media-linked posts, instead of Remora. It isn't poetry, reader. If you will dig through the Echos newsletters in your closet -- you know, the ones the Acoustic Society of America sends you -- you will find an explanation in the winter, 1999 issue:

"Unusual acoustics due to atmospheric conditions or to terrain are sometimes given the catch-all name "acoustic shadows." The first recorded incidence of the phenomenon occurred during the Four-Day Battle in 1666. The naval battle was fought between the coasts of England and Holland, and sounds of the battle were heard clearly at many points throughout England but not at intervening points. Passengers on a yacht positioned between the battle and England heard nothing. A number of other examples have been recorded since that time. Guns fired at the funeral of Queen Victoria in London in 1901 were heard in Scotland, but not across a wide region in between. The German bombardment of Antwerp in World War I was heard clearly for a 30-mile radius, then beyond 60 miles from the Belgian city, but not in between."

Well, we at Limited Inc are always firing guns at funerals, in a manner of speaking. And we like to think that our absolute lack of effect in the immediate area simply means we are being picked up in Scotland, in a manner of speaking. Actually, a friend from Barcelona called us yesterday and claimed that our posts are being used as fodder for idea starved Catalonian columnists. This is Scotland, indeed.

Meanwhile, we had to borrow some change yesterday because we are down to pennies. As in, for instance, not being able to afford a stick of deodorant. Luckily, we found a lender willing to supply us with the necessary for the next couple days. After that, well, c'est le deluge. Life, for Limited Inc., is gonna be tough.

Dope

Since no one responded to the "replace Remora" contest, Limited Inc spent some time bent over our dictionary, then the Shakespeare, then surfing through various columnists. So far, we haven't settled on a name. So we will continue to use "Dope" and think about linguistics until inspiration strikes.

Well, the headlines are Enron inspired, as the news wakes up to the fact that Enron was in bed with the Bush Administration. This is as unexpected as hearing that some Hollywood starlet is sleeping around. The Bush administration was pretty damn proud of its bedmate until recently. But like some chastened, though still eminently corrupt financial "advisor," the Bushies are pulling back on their investment. It is hard to see this as more than a passing scandal, however. The press still doesn't understand Enron's collapse; the biz press is unanimously on the side of "de-regulation." And the public is acquiescent, even to the extent that polls have shown no resistance to de-regulation even though they have also shown a majority expects that de-regulation will entail a price hike. If the nineties were about anything, they were about the crushing of the will to resist. Although it is gratifying to see anti-WTO protesters throng the streets when the WTO is in town, it isn't enough, right now. In the backlash atmosphere of Bush year one, it is easy to foresee questions about Enron's role in directing Bush policy being labelled unpatriotic. Don't forget, this prez is on a Heros bubble gum card now.
The WP story includes this characteristic Bushy touch:

"Bush reimbursed Enron for the use of its corporate jet during his presidential campaign, and was feted by company officials at Enron Field, home of the Houston Astros, seven months before the election. The Houston Chronicle has reported that Bush conferred a series of nicknames on Enron chief executive Kenneth L. Lay, including "Kenny Boy.'"

Dope

As my readers can plainly see, the contest for renaming the Remora category on this site fell still-born from the press -- not that Limited Inc is greatly surprised, since falling still born from the press does seem to be the fate attaching to every post I've written on this site, from July onwards.

We are not amused; because we are, in our own humble opinion, amusing. Although can we trust our own own humble opinion? because we also firmly believe the great intellects of the past pale in relation to our merest subclause. It has been pointed out to us that we suffer from egomania.

Alas, today we suffer from a physical, rather than metaphysical, ailment. Fever racks my bones. Mysterious aches are playing the boogie woogie on my spinal column. Luckily we were visited a friend of mine, mentioned in previous posts, who plays a role in my life similar to Scheherazade -- not that I am planning on beheading her. No, the deal with this woman is that she can tell me 1001 stories in one night. I was hoping she would come by, and so when she did, I had a Proustian moment, the invalid's feverish hope realized in an entrance. She bore healthful gifts -- chicken soup, grapefruit, and water. This friend sets great store by water, so I even drank it: of course, Limited Inc is always reminded of the great W.C. Fields joke about not drinking water, because fish fuck in it. The problem with modern water is that fish don't fuck in it. Often, instead, they suffocate in it, in great Dead Zones, or are poisoned by run-off, or invaded by parasites suddenly endemic to artificially warmed currents. But that is for another day.

I've always been a hypochondriac. But my hypochondria takes the form of imagining strange and obsolete diseases, like Gout, or Dropsy, that I might have. Today I was thinking I had pellagra. Since I don't know what pellagra is, I decided to check out a helpful site, and get the scoop.

... And what a scoop. Here are the symptoms of pellagra, just in case you were thinking you had it too:

"In the United States, pellagra has often been called the disease of the four D's -- dermatitis, diarrhea, dementia, and death.'

The NIH site celebrates one of those pioneering doctors whose fictional analogues haunt the pages of Balzac and Zola -- medicine was, after all, positivism on the grass-roots level. And science, of course, required a view of the human body at odds with ten thousand years of doctrine. For ten thousand years, the human body was subject to witchcraft. It was subject to analogy. It was subject to the universal idea of eternal life -- a view of the body that is hard for today's average Joe to envision, in spite of the light sprinkling of out of body death experiences that Readers Digest eagerly purveys.

But let's cut to the chase -- the doctor, Joseph Goldberger, has quite a story.

""Bored and intellectually restless in private practice in Wilkes-Barre, Pennsylvania, the young, shy physician joined the United States Marine Hospital Service, (later the U.S. Public Health Service or PHS) in 1899 at the beginning rank of Assistant Surgeon earning an annual salary of $1,600. Ironically, the immigrant from central Europe began his public health service career inspecting immigrants in the port of New York. However, it was not long before his epidemiological skills earned Goldberger the reputation of a tenacious and clever epidemic fighter.


Between 1902 and 1906, Goldberger heroically battled epidemic diseases. He fought yellow fever in Mexico, Puerto Rico, Mississippi, and Louisiana, contracting the disease himself His efforts earned him a promotion to the rank of Passed Assistant Surgeon in 1904 and later, an introduction to Mary Farrar, grandniece of Varina Davis, the widow of Confederate President, Jefferson Davis. In 1906, the immigrant Jewish physician from New York's Lower East Side married the daughter of a wealthy and socially prominent Episcopalian attorney from New Orleans over the religious objections of both families."

Wow, Jeff Davis' grandniece. The bones of that old racist must have been rattling in his grave.

Once in the South, Goldberger decided to track down the Pellagra germ. But he soon grew convinced that the germ theory, which was to that time what the genetic theory of disease is to ours, was wrong in this case. He got the governor of Mississippi to give him twelve healthy prisoners. Hey, they were promised freedom, if they only ate a very restricted diet. They soon came down with pellagra. So Goldberger triumphed, right? Oh no, he was attacked as a fraud for years. And in the twenties, his predictions about an epidemic of pellagra in the poor South were greeted as a slander on Southern manhood.
The South, as we know, has a higher percentage of meatheads in it than other parts of the country. And before the peanut gallerys starts lofting shells at me, remember: Limited Inc is from Georgia.

Ironically, Goldberger never isolated the vitamin that was deficient in pellagra cases. It was niacin, Vitamin B.
So I don't think I have pellagra -- I ate my cornflakes this morning.
A question hangs here, though -- what about those prisoners? Did the good guv'nah of Mississippi give them their freedom, as the guys in O brother where art thou, or did he renege. Or did they even survive that last D -- it's a killer.

Remora

Readers should note Le Monde's beautiful, and somewhat fallacious, essay by Albert Manguel about the end of Argentina. All countries, he claim, rest on the shared fiction that they exist. A philosopher might call them intensional objects, meaning those entities which presuppose the agreement of subjects that they are as long as the subjects agree they are. This is a little different than what we mean by saying that mountains, or rivers, or trees are. Intensional things are as long as there are subjects for whom they are. These things are like dreams are. So nations, as fictions, extrude themselves crudely in anthems and slogans, in ads and editorials, in law courts and prisons. The nation is the Song of itself, the supreme act of subjectivity; it negotiates the distance between Descartes cogito ergo sum and Louis XIV's l'etat, c'est moi -- the state thinks itself into being in the heads of its citizens.

The question is, can this daydream of reason exist after the daydreamers have committed every vicious act in its name? We know that in one sense it can, and in one sense it can't. Germany survived Hitler -- but only because the Germans convinced themselves, at first, that Hitler never existed. That is, he existed in spite of the Germans. Generations have passed, and this fiction has been discarded, but only because it can be, in the same way that Hollywood can now show Indians as the noble warriors from whom a continent was wrested. Hollywood isn't crazy -- nobody is planning on giving the continent back. That nation, in those heads, ceased. From this point of view, history is a game of deniability. Those who are ostensibly proudest of the actions of our forefathers have no intention of indemnifying the sons and daughters of the slaves of our forefathers -- this is to take the daydream a little too far.

Here's what Manguel says about Argentina:

Il existe une tournure d'esprit que nous avons (� tort) qualifi�e de machiav�lique, celle qui porte � croire que l'on peut tout se permettre dans le but de s'agrandir, y compris d'enfreindre la loi. Les tyrans grecs, les c�sars romains, les papes et empereurs la poss�daient ; elle a d�clench� des guerres, justifi� des atrocit�s, caus� des souffrances indicibles ; en fin de compte, elle a toujours provoqu� l'effondrement des soci�t�s dans lesquelles elle s'�tait enracin�e. En Argentine, elle s'est manifest�e d�s l'aube de la R�publique, avec le meurtre du jeune r�volutionnaire Mariano Moreno. Elle est devenue officielle au XIXe si�cle sous la tyrannie de Juan Manuel de Rosas, acceptable au temps des oligarques et des propri�taires terriens au d�but du XXe, populaire sous Per�n. Enfin, sous la dictature militaire, elle a min� la soci�t� sous tous ses angles, ignor� toute l�galit�, fait de la torture et du meurtre les instruments quotidiens du gouvernement, infect� le langage et la pens�e.

Limited Inc.'s translation: "There exists a humor that we have (falsely) qualified as machievellian, which tends to assure us that we can permit ourselves anything in the process of growing great, including violating the law. The greek tyrants, the roman cesaers, the popes and emperors possessed this turn of mind; it started wars, justified atrocities, caused unspeakable suffering; and in the end, it has always provoked the collapse of those societies in which it has rooted. In Argentina, at the very dawn of the Republic it manifested itself in the murder of the young revolutionary, Mariano Moreno. It became official in the 19th century, under the tyranny of Juan Manuel de Rosas, acceptable in the time of the oligarchs and the landholders of the beginning of the 20th centruy, popular under Peron. In the end, under the military dictatorship, it totally undermined society, ignoring all equality, making of torutre and murder the quotidien instruments of government, infecting the language and the thought."

Well, Limited Inc is inevitably reminded of our own condemn�s. We received a letter from one of our far flung correspondants today. She enclosed a Salon article about a scholar at a Florida University in Tampa who has been fired for having spoken out against Israel on the Bill O'Reilly show. Fla.'s guv, the ludicrous Bush brother, Jeb, applauded. The man in question, Sami Al-Arian, turns out to hav had the rich, rancid experience of Uncle Sam's hot breath on his neck before: the FBI arrested his brother-in-law,
"a soft-spoken scholar named Mazen Al-Najjar, for unspecified terrorist associations. Al-Najjar -- the brother of Al-Arian's wife, Nahla -- had arrived at Tampa in 1981 and earned a doctorate at USF. Al-Najjar was arrested under then new antiterrorism laws allowing suspects to be held on the basis of secret evidence, without the precise charge being revealed in court. For the next three and a half years, Al-Najjar would remain in Bradenton prison without anyone -- not his lawyers, not even the judge --
ever seeing the purported evidence against him."

Can such things be? Limited Inc understands that mix of fear and smugness that reduces the canned suburban masses to silence, or to short term self-interest, or to right-wing myth. Still, Limited Inc would urge some effort, some strength of will here. The military in Argentina took hold in conditions of similar black magic. You think it can't happen here? Wake up, honey. It's all happening..

Dope

Limited Inc is thinking of changing the name for the Remora category. And let's be interactive about it, shall we? A little contest, my many many eager readers? Or at least my one or two. We need a label that is as au courant as an Enron exec's Swiss bank account , but as ironic as one of David Foster Wallace's footnotes. Please, use the little comment machinery thingy.

On another note, we should keep you up to date on our impoverishment -- always a big theme here at Limited Inc. Yes, December has passed, and our workload has seemingly gone down the old toilet -- we query, we query, and we receive the rare word back that this year, media is re-engineering, renewing its faith in the automatic 20% per year profit margin by getting rid of its deadwood -- the book sections, the freelancers, etc. That means, no eatin' in February for us! It is, of course, hard to get through a month without eating, but Limited Inc is stocking up on the vodka now, in order to weather the storm. An old trick from the de-kulakization days.

Now, down to serious business. And for that, what better place than the editorial page of the Wall Street Journal? Having an asset they have no intention of distributing for free, the WSJ isn't linkable. But we read Mark Falcoff's op-ed piece, Argentina has a choice: Peronism or Modernity, and we couldn't think of a better example of the iron logic of globalisation in its Post-Keynsian guise.

Key graf for us is near the end:
" ... let no one assume that Argentina can solve its problems by moving backwards. In recent weeks there has been much talk about the "good old days" of classic Peronism, with boom and psen populism delivering effortless wealth to every Argentine family. Presumably, experiments with a new, floating currency,a default on foreign debts, or subsidies for unproductive (and uncompetitive) industries could put people back to work, but not for long. In the past, such policies could only be financed through heavy foreign borrowing. With the country in virtual default on $132 billion dollars in obligations, that expedient is simply not a prospect."

Ah, the wonders of globalisation. Nations, like kine being lead down the corridor to the slaugher chamber, are continually being told they can't "move backwards." Why? Because the butchers aren't going to let them. Butchers usually tranquilize the ungulates to make them more pliable. Falcoff spots the butcher's drug in his last sentence, but because he is wearing ideological blinders, he doesn't ponder its essential wonder. If he were more, let us say, Marxist, he might be curious about the historical provenance of that debt. He might even do a little research, and that research would tell him that the majority of the first 60 billion dollars was accumulated under the military junta, with the strong support, until that unfortunate Falklands business, of the US government. He might even wonder why else they would be lending to Argentina at that time -- was Citycorp so tenderhearted under Walter 'Santa Claus' Wriston that they lent to make sure the Argentine family had a guaranteed, inefficient job? And Falcoff might even, in this Marxist moment, ask about the accumulation of the other 60 billion dollars worth of debt. Guess what? It was taken on under Menem and Cavallo's shock treatment regime, when the enterprises were freed, the peso was matched to the dollar, and according to the WSJ, Argentina was proving that Reaganism on the international level was the only way to go (a self fulfilling prophecy -- you can't go backwards when you've sold off your assets to the most corrupt bidder. You especially can't go home again when you torched it and don't even have enough in your budget to pay the firemen).

And say Falcoff decided to throw caution to the wind and even become Leninist. Then he might ask about the motives international lenders have for loaning 130 billion dollars to a country that now "makes up around 20 per cent of JP Morgan's Emerging Market Bond Index Global," according to the Financial Times. Emerging Market hucksters have said, aw shucks, the ratio between debt and GDP will be just fine if Argentina grows at 4.3%. That it has experience negative growth for the last three years, a pretty spectacular correction of -3.5% in 99, doesn't bother the Emerging Marketeer for good reason -- they are in the unique situation of having their risks cared for by such international organizations as the IMF and the World Bank. If Argentina defaults, and Limited Inc sees reason to think it will, the Emerging Marketeers will finally have to face up to the real world -- if you give excessive credit to an excessive debtor because the interest rate and the options on the interest rate are way cool, and you get your kneecaps blown off -- well, a version of caveat emptor, as the crack dealers say, kicks in.

Remora

What did you do in the Great Recession, Daddy?

Well, as analysts on Wall Street bubble with bull opportunities afforded by the rest of this year -- that good old V bounce to the recession -- reality out there isn't so happy. With the Federal Reserve becoming, basically, the Office of Moral Hazard, always willing to cut rates in order to keep equities from finding traditional p/e levels that would bring the Dow Jones Average crashing 2000 some points, the market in housing and autos was banner last year. But banner at what cost? Enron shows what happens when a company is taken apart by the whitewater currents of the futures market -- small bets can become big losses, as was the experience of Barings, of Long Term Capital Management, of the Orange County Teachers retirement fund, of... well, the list goes on.

In order to prevent sales from slumping, Detroit used the Fed's party-time philosophy to finance an incredible issue of credit. This is a balancing act that is reminiscent of the situation the S&Ls faced in 1979 -- in that year, they had to balance the sharp, short term spike on interest with long term housing loans that were pegged to yesteryear's lesser interest rate. Inflationary discounted inflow did not make up for inflationary magnified outflow. Result: changes in the usury and loaning laws that eventually wrecked the industry. Here, we have the inverse situation, with short term interest unnaturally low. If the Fed ratchets up the rate this year, as any good and prudent monetarist would advice, it is going to squeeze Detroit like a sucked lemon. The game plan seems to have been, avoid a sales downturn by any means necessary. But if you hold the firesale, you better have had a fire. Well, this year the story is going to be about a fire foretold. This means legislation will soon be trucking through congress to give the Big Three some special and stupid breaks. We won't hear from any congressmen about how stupidly these companies have used their credit -- unlike the preaching we heard from the high and mighty Senate when they were crafting bankruptcy laws to penalize the poor individual debtor.

If that doesn't happen -- well, take away Limited Inc's prophecy licence and throw our body to the street, where the dogs can lick up our blood. What was good enough for Jezebel is good enough for us.


Here's the NYT:

"In 2001, total auto sales stayed at a near- record level, especially after Sept. 11, largely because G.M. and Ford leaned heavily on their financing businesses to pump up sales. But that burst of interest-free financing deals was just the latest in a string of deal making that led to swelled portfolios of leases and car loans taken on by Ford Motor Credit and the General Motors Acceptance Corporation (news/quote), known as G.M.A.C., in the last five years.

Unlike their foreign rivals, which have developed stables of models that buyers actually will pay more for, Ford and G.M. have relied more on incentives like low- interest loans and cheap leases to attract customers. The automakers have ponied up billions of dollars to their financing units to make up the difference on the below-market financing."

Fun facts to know and tell:

Ford Motor Credit financed more than half of the vehicles Ford Motor sold last year. G.M.A.C. financed more than 40 percent of G.M. sales. At G.M.A.C., 85 percent of loans made in 2000 had some subsidy.

This is a huge shift in loaning practice, to corporate subsidiaries who have every interest in making unsafe loans. If there's a large fall out in those loans, watch the Federal Gov come up with some cozy loan insurance plan.

Remora
Tom Paine got Colin Woodard, whose book, Ocean's End, was one of our favorite books last year, to put the heat on The Skeptical Environmentalist
.

But Tom Paine is a little late to the game, compared to Limited Inc., as our lucky readers (the few, the bold, the brave, the ones looking for girles+Arabia+sex) know. For those of you who missed it, this is a reprint of our post in August about Lomborg's miserable tract:

8/8/2001 10:40:02 AM
Bjorn Lomborg seems set to be the most quoted environmentalist of the season. The reason? He has a conversion story. There he was, according to himself, your average know nothing Greenpeace schmoe, kvetching about mass extinction and Global Warming on Planet Gaia, when he got knocked down (spiritually, that is) by libertarian skeptics of the environmental model. No doubt, like Saul, he had his days of reclusion and blindness, the night sweats, the fever - but a vision of Gale Norton apparently visited him, saying, in an unearthly voice, go and tell all mankind about the wonders of cost benefit analysis! So he arose from his bed and now he's come out with a book, and at such a convenient time, too! What with the trashing of the Kyoto accords and all, which looks so terrible in the press. The book plays a theme dear to the corporate mindset - that is, that environmentalists exaggerate, and that such things as climate change, or environmental damage, are myths generated by inaccurate or skewed stats and projections of enviro- Nazis. Of course, modern day converts never convert all the way - they want to bring their cultural capital with them, otherwise they become just another Jack in the Pack. So instead of taking the mantle of libertarian debunker, Lomborg, of course, is still describing himself as an environmentalist. He is of that less dogmatic type, undisturbed when they blacktop those pristine redwood forests in California. Plenty more where that came from! Hell, wonders of biotech nowadays, we'll just fix us up a batch in a laboratory. So come on down, Butterfly!!!

Lomborg summarizes these views in an Economist article. He has developed a handy name - the Litany - for the general complaints about ecological degradation bandied about by environmentalists. He goes through the four major points in the Economist article.
I actually agree with one of his points - I have no sympathy with the population control crowd. In fact, the Litany is very skewed, itself, to the kind of environmentalism represented by Paul Ehrlich and the Club of Rome, which has always been very alarmist about the depletion of natural resources and the danger of over-population.
It is his third and fourth points I find extremely shaky. First, there is the threat of biodiversity loss. Lomburg says this is exaggerated. But his base for that loss is extinction. He doesn't defend this as a standard. He writes, for instance, of predictions of extinction, "...the data simply does not bear out these predictions. In the eastern United States, forests were reduced over two centuries to fragments totalling just 1-2% of their original area, yet this resulted in the extinction of only one forest bird." Presumably he means the Ivory Billed Woodpecker, or perhaps the Carolina Parakeet (that I can name two candidates off the top of my head - and I'm no ornithologist - makes me think that his claim is probably factually dubious). Lomburg simply ignores monoculture, and the destruction of biodiverse habitats. If the loblolly pine takes over the ecological niche of, say, the live oak in Southern Georgia, sure, that doesn't entail the extinction of the live oak - it simply entails its rarity, its being thrusted to the periphery. The whooping crane is not extinct - but the number of the whooping crane is such that its former environmental role is, basically, non-existent. In other words, bio-diversity certainly doesn't mean that species that hang on in severely diminished numbers are some kind of proof that the ecology has remained unimpaired.

As for the claim that "pollution is also exaggerated," this point is much too uniform to hold. Lomburg shows that London air was much more polluted in the 1880s then now. His claim is, presumably, about particulate pollution. But the harm of a pollutant isn't necessarily in its quantity - small quantities of certain pollutants are much more harmful than large quantities of other pollutants. Take Lead. When lead was put into gasoline, it was emitted in quantities that were less than, say, the quantity of carbon dust released by coal energy - but lead is much more toxic. Also, Lomburg simply ignores the complexity of pollution. London is a good example - after the killing fogs of the fifties, a concerted effort was made to clean up the London air. But the clean-up inadvertantly lead to ozone problems, as the sunlight could now interact with car emissions - in other words, smog.

Finally, Lomburg engages in some suspicious cost analysis. For instance, he quotes a chart showing how much it costs to save a persons life in terms of regulation, and enforcing the use of various pollution reduction devices. This is a very common fallacy among the anti-enviro set - that there is only one set of costs. What is never done is to ask - what does pollution cost if it isn't cleaned up? The tacit assumption is that pollution control is some kind of bizarre luxury. If your car emits certain gases, well, that's a moral problem, but surely not an economic one. Right? Wrong. Pollution is not a free lunch. The question is: who pays for the social cost of pollution? This question is evaded by giving us the unilateral costs to businesses of pollution clean-up - which is like being given one side of an accounting ledger. If it costs 800 dollars to install seat belts, for instance, what isn't asked is - how much does it cost to pay for the additional injuries that would result from lack of seat belts? If it costs a million dollars to install filters on a coal burning power plant, how much does it cost, in terms of life and property degradation, when the unfiltered pollution is allowed to spread from the plant? In fact, this is where environmentalists, far from being alarmists, have been sleepwalking - partly because they don't think in terms of, say, property values. The anti-enviro crowd is happy enough with that - they can pass the cost of skewed statistics onto the back of the average citizen, in the shape of using them to justify dirty public policy.

I've written a little essay on the social costs of doing business which I ought to post this week, to continue this discussion.
Anyway, all my caveats aren't going to matter - Lomburg is on his way as the corporate environmentalist du jour. He is handsome, he has a conversion story, and he uses models preferred by the business crowd. What could be better?

Remora

Limited Inc realizes that our fascination with some of the tedious arguments in the dismal science is not winning this site any popularity awards. Actually, according to our site meter, our most popular posts inevitably include the words Lolita, or tits, of sex, or girles -- so we included them in this sentence to trap the unwary, horny surfer. Ha ha.

But Limited Inc has always pricked up its ears at the sound of a trumpet, the old gray battle horse within stirring to scenes of past Agincourts. Today, the trumpet resounds from the Center for Economic Policy, curtesy of a link on the Arts and Letters site. Let us go then, you and I, to the article entitled A Closer Look at the World Bank's Most Recent Defense of Its Policies by Mark Weisbrot, Dean Baker, Robert Naiman, and Gila Neta. You'll notice the date on this paper -- August 2000. We can't explain why the A & L people spotlighted it a year later, but the paper foregrounds some future post we will no doubt be writing concerning the current turmoil in Argentina. The meat, here, is in the comparison of growth figures. The world bank paper that Mssrs. Weisbot, et al are replying to makes the banal point that growth is good for the poor. It extrapolates that point into another point: that the IMF doctrine of "anti-inflationary" fiscal policy, liberalisation of global financial markets, and openness to international trade are good for the poor. The inference being, these are growth oriented policies. The further inference being, past policies were not growth oriented.

Well, this is a sand castle of an argument, and W.B.N.N. knock it down with one swift kick, consisting of a graph comparing growth rates. The gross and oh so out of fashion Keynsian world displays the kind of growth undreeamt of in the sleek IMF model. If we are looking for policies that help the poor (and this is not something the IMF really is set up to do), unsurprisingly, the poor aren't helped by accident. They aren't, in other words, helped by helping the rich, which is what the IMF all neo-liberal political economics would have us believe. The comparison is strikingly in favor of the Keynsian mix of inflationary/ anti-inflationary measures, and national policies that regulate exports and imports.

Here are some important grafs:


In Latin America, for example, GDP per capita grew by 75 percent from 1960-1980, whereas in the latter period it has only risen 6 percent. For sub-Saharan Africa, GDP per capita grew by 36 percent in the first period, while it has since fallen by 15 percent.

These are enormous differences by any standard of comparison, and represent the loss to an entire generation-- of hundreds of millions of people-- of any chance of improving its living standards. Even where growth was significant, as in Southeast Asia, it was still better in the earlier period. The only exception to this trend was East Asia, which grew faster from 1980 to 1998 than in the previous period. But this is due to the quadrupling of GDP, over the last 18 years, in China (which has 83 percent of the population of East Asia).

In short, there is no region of the world that the Bank or Fund can point to as having succeeded through adopting the policies that they promote-- or in many cases, impose-- upon borrowing countries. (They are understandably reluctant to claim credit for China, which maintains a non-convertible currency, state control over its banking system, and other major violations of IMF/Bank prescriptions).[6]

One cannot stress too strongly the failure of these policies on the measure of economic growth, even ignoring income distribution. The debate over Dollar and Kraay's paper, for example, has simply assumed-- as the authors have-- that IMF/Bank policies do promote growth, and the only question is how well the poor have fared under the growth that has resulted from these policies."

The last is the assasin graf -- the look, the Emperor has no clothes graf. But before Limited Inc puts down our money on Keynsian policies, we feel like these statistics have to be fed into, well, reality. The era of spectacular growth spotlighted the Mssrs. et. al might, indeed, be impossible to replicate even with Keynsian economics. The reason for this is simple: a snapshot of the political economy of, say, Brazil in 1900 compared to Brazil in 1980 is going to be incredibly different; but it is hard to imagine the same technological/sociological/economic alteration occuring in the next twenty years under no matter what economic regime.

A further caveat has to do with the environment. The stats for the first half of the century simply ignore environmental degradation. But we are now more keenly aware that there are social costs to dams, irrigation projects, monocultural agriculture, and other featurs of growth. This impinges, of course, on both sides of the argument, but it is too little taken into account by the same groups who, admirably, dissent from the current model of IMF growth.

Dope

Some further comments on Senator Torricelli's Houdini like escape from prosecution seem called for.
The question on the mind of the spectator must be: why would the Repugs go along on this deal? After all, damn Senator T with the black spot and Senator Lott will once more be the majority leader, talked to, even, by tv reporters and such.

Well, let's speculate a little bit, children. When one of D.C.'s pirates is caught with his hand in the till, very often a delicate situation arises. Because so many other pirates on the ship have been quietly amassing as much loot as their natural greed allows them. It is a tradition that goes back to the Roman senate. So if Senator T.'s skin is graciously unflayed, one looks around for who else could be outrageously vulnerable to charges of pilfering. And the eye alights on a certain Texas senator, Phil Gramm. Phil and his wonderful and rich wife, Wendy, have made quite a killing in the past decade from their association with Enron corporation, of blessed memory. There's a Public Citizen release that counts the ways Enron loved the Gramms, and the Gramms loved Enron. Consider that Wendy, high spirited free marketer that she is, was appointed by Bushie the elder to head the Commodity Futures Trading Commission. This is a sad sack commission ostensibly armed to police the derivatives market -- but armed like a boyscout with a peashooter facing down the Nazi Wehrmacht. Even so, you never know when some nasty regulation will actually enforce transparency on futures or options trading, the biz Enron was massively in. So our heroine, Wendy, came to Enron's rescue by exempting trading in futures contracts by Enron, in 1993. It was one of her last acts as a truly altruistic public personality, because she then resigned her chairmanship and, five weeks later, took on an entrepeneurial role on the Enron board of directors. Now, reader, you are thinking that this is merely a coincidence; and besides, boards of directors are notoriously composed of crash test dummies, rubberstamping the decisions of the CEO. But our dear Wendy also served on the Enron Audit committee (this part of her story should be scored to that all time popular hit, "Three blind mice'). So double hitting for that innovator in spot prices in power for you and me, she made off with around a million five. Hey, I'm sure that Phil was uninfluenced by that chunk of change, but you know how a loving, christian couple, in the depth of the night, abed, sometimes talks about the meaning of it all, and our redeemer's beautiful life story, and wouldn't it be nice if some properly motivated senator snuck a provision onto some bill de-regulating the power commodity markets. Probably these sweet whispers were in vain, given Phil adamantine integrity, but maybe something, well, unconscious kicked in, cause golly, Phil did muscle in the bill Enron wanted. For good Laissez Faire reasons, no doubt.

Yes, the money rolls in, but Phil's ambitions no longer play out on the national level, and his mind has turned to contemplating the blank verse of The Prelude or something -- those sweet retirement thoughts. But still, with Enron falling apart this year with a speed and desperation much like that of the East German government in 1989, the Gramms probably also had some heart to hearts about those pesky laws constraining politicians from accepting bribes in too public and outrageous a fashion -- laws which, as we all know, are stronger in the spirit than the letter, but still... Maybe it is time to fold your tent and creep home, with the couple millions of Enron bucks under your belt or in your portfolio to watch over you in the golden years. This will no doubt be used by invidious nabobs of negativism to explain why Phil gave a press conference on September 2 announcing his retirement from the Senate, even though he had amassed a 4 million dollar reelection warchest.

Warms your heart, doesn't it, reader? And so maybe Senator T gets traded for Senator G. in the game. We are not of course suggesting anything so cynical went down in D.C. in reality. In reality, all Senatorial transactions are motivated by the unwavering patriotism of the members of that hallowed chamber. All Limited Inc is doing is, well, muddying the waters. Spewing negativism. Speculating, as is our wont, in an idle and destructive manner.

Remora

Here are three grafs from the story announcing Senator Torricelli won't be prosecuted for his buyability.

"Even before Ms. White took over the case from the campaign task force early last year, many legal experts had emphasized the difficulty of successfully prosecuting sitting politicians in cases involving bribery or illegal gifts.

Such cases have been especially difficult when the accusers had legal problems of their own. In Mr. Chang, the prosecutors had a witness whom they themselves had called a liar before he agreed to plead guilty.

The senator himself has never denied that he accepted gifts from Mr. Chang, but said merely that he considered Mr. Chang a friend and that he never took any "illegal gifts." Congressional ethics rules allow legislators to accept certain gifts from friends when they are of limited value and are promptly reported."




Limited Inc is only mildly astonished that there will be no trial before a jury of Senator T.'s peers. Instead, he is going to have to negotiate with the Senate Ethics committee, which holds a position vis-a-vis potentially corrupt politicians similar to the position the Taliban held to Al Quaeda. It would be feeble irony to call the Senate Ethics committee an oxymoron. It is, rather, an offense to the word Ethics. Far better to abolish it once and for all, than to pretend that anything like ethics transpires in the Senate.

The up front thievish behavior of Torricelli was testified to by his "friend," Mr. David Chang. On the semantic salience of friendship in this case, there is a nice little article by Jason Zengerle that prefigures the non-prosecutorial conclusion of the Torricelli investigation; although when Zengerle wrote it, he probably thought he was nailing Senator T. Unfortunately, since legislators decide for themselves those laws that they will have to obey and have riddled them with friendly little loopholes, it looks like Torricelli will emerge unjailed from this contretemps because David Chang is just the kind of sleezeball that Torricelli proudly (and intermittently) claims as a friend. As a friend, apparently, the sky's the limit in terms of giving gifts and getting favors. Limited Inc has experienced this ourselves. Our friends often come over with wads of cash to give to us, rolex watches, and such; sometimes our friends, just like Senator T.'s, insist on taking us to tailor shops and buying us ten thousand dollar suits. That's how friends are, God love em.

The fruits of amity are listed at this NYT site. One is reminded of Charles Keating, of S & L debacle fame, who once commented, when asked whether his 'contributions' influenced political figures, I want to say in the most forceful way I can: I certainly hope so.