Post War Worries to Mull Fighting for America

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Posted by Tony from ( on Wednesday, October 09, 2002 at 3:50PM :

Post War Worries to Mull Fighting for America at Home

Okay, let's get this out of the way first: Last night the President set forth his case for disarmament/regime-change (or, if you prefer, regime-change/disarmament) in Iraq. However you might feel about the prospect of war, you have to give the guy credit, he's moved the Iraq issue out of the dead letter bin and put it back in to active circulation.

At this point congressional backing for military action appears inevitable. All we can do now is wait and see how well, or poorly, the President plays out this dangerous geopolitical gambit.

If Bush's military solution succeeds in freeing the Iraqi people and creating a moderate, even democratic, Iraq without destabilizing the entire region in the process, history will treat him kindly. But, if what comes of this is a new Iraqi government filled with the kind of opportunistic parasites we often enthrone after one of these affairs, then it will all have been in vain. (And, what I have seen of the so-called "Iraqi opposition" shows there will be no shortage of silk-stocking opportunists in the "new Iraq.)

That's what I would start worrying about now. Worry about what comes after action against Iraq. From past experience I think we can rest assured that companies like Halliburton, Bectel and a host of energy companies with connections to this administration are already compiling their list of Iraqi expatriates they'd like to see in such posts as Oil Minister, Minister of Natural Resources, chairman of the import/export agency and the chairman of the yet-to-be created Iraqi Environmental Protection Ministry.

Keep and eye on that ball, because you can be damn sure "they" are.

Calling all Democrats...Calling...
Pleading guilty is all the rage right now, so I want to enter my plea now. After reading NY Times columnist Tom Friedman's piece today I want to plead guilty being one of the Democrat "whiners" who tried to convince myself that the reason American's were not paying attention to the nation's economic and social woes was solely because President Bush had drowned it all out with his war drum.

"The problem with the Democrats is not that they are being drowned out by Iraq. The problem is that the Democrats have nothing compelling to say on all the issues besides Iraq. Iraq is winning control of the agenda by Democratic default, not by Republican design." NY Times' columnist Thomas Friedman, today.

Ouch! But, as I say, I plead guilty. The man's got a point, while a bit overstated. Democrats have in fact been pointing out that the economy has gone into the shitter since Bush took over the national treasury and that that Social Security, Medicare and relief from prescription drug prices are at or near crisis points. Anyone paying attention knows that the difference between the parities on these issues is enormous. Democrats want government to do something and Republicans want to do as little as possible hoping the private sector will come up with solutions.

But, in the end it's results that count and Democrats have not succeeded in getting them. The reason is, as Friedman points out, they have been too often cautious and too often timid. Democrats need to remind the American public, clearly, forcefully and often, that fighting for American values overseas is fine - when justified - but (and this is a very big but) if in the process we destroy at home the very things we say we are fighting for, what's the point?

Democrats need to turned up the volume on the issues that they know in their hearts Americans genuinely care about. While Americans worry about Saddam Hussein, they care about the financial security of their family, their retired parents and the kind of country their children will inherit. Democrats need to go to war for these issues just as Bush has gone to war for his war agenda.

Here are the obvious places to start turning up the volume:

- Change the way we're talking about tax policy. Allowing offshore tax shelters and promoting retroactive tax breaks for campanies like Enron is far better policy and politics than this uninspiring kabuki dance around Bush's tax cuts. Democrats still live in mortal fear that opposing these tax cuts will get them labeled "tax and spend liberals" by Republicans. Well, let's call that what it is - moral terrorism - and Democrats are letting it succeed. Just as Bush repeated reminds Americans that Saddam Hussein is lying when he says he has no weapons of mass destruction, Democrats need to remind Americans that eliminating tax cuts that are not even in effect yet is NOT a tax increase. And, anyone who says so is lying. American's will understand that if it is explained to them with the same persistence and passion the President has used to sell his Iraq policy. And, Democrats need to explain to Americans that those Bush tax cuts are themselves weapons of mass destruction and, if left in place will inflict unacceptable damage on the country. Republicans want to accuse us of increasing taxes? Democrats can answer that attack, and remind voters that it is Republicans who don't want to repeal overseas tax shelters.

- Next let's remind Americans that Medicare and Social Security are still steaming along on course a collision course with the baby boom iceberg while the skipper is sipping brandy in the main saloon with First Class passengers. War or no war, none of the things that threatened retired American's safety nets before Iraq have changed. If anything, things have gotten worse. The Bush tax cuts turned what were federal budget surpluses into federal budget deficits. And privatizing social security - that's what it is not matter what Republicans pollsters want to call it - will make things far worse.

- Oh, and it might be useful to remind everyone that civil rights still matter. Yes, even in a time of war - maybe especially in a time of war - America's traditions of due process, freedom of speech and press, are as important as ever. The founders of the country described these rights as "inalienable." When those rights begin being seen as conditional or optional the gig is up for America, as we've known it. After that the rational we use for "liberating" countries like Iraq becomes an empty excuse for aggression and our moral authority as the world's leading democracy vanishes. Attorney General John Ashcroft is one of those who argue we should suspend certain American civil rights when they become inconvenient. That makes him, and those in the administration who think like him, just as dangerous to America as any foreign enemy.

Yes, we all agree Saddam is a bad guy. But let's also focus on things that can actually improve the lives of Americans everyday:

- getting the economy moving again

- lowering the cost and increasing the coverage for healthcare and prescription drugscleaning up the environment instead of wrecking it,

- stopping corporate recklessness.

Americans ready to hear this message. But, Democrats will have to deliver it better, more often and louder than they have to day.

"At the moment, the Bush team is leading the nation much more by fear than by hope. The Democrats can only win, or only deserve to win, if they can offer a bold alternative." Tom Friedman

Selected Shorts
- Cat fight at the SEC: Just when we need them the most the SEC is virtually paralyzed by an internal bar fight. News that Chairman Harvey Pitt was about to yank the nomination of John Biggs as head of a new accounting oversight board, sent chairs flying in the SEC boardroom this week. Biggs is understood to be a tough, no nonsense proponent of strong accounting firm regulation. Needless to say the last thing the accounting profession wants is any of that. So, Pitt, who originally picked Biggs to prove he was going to get tough on accountants, tried to quietly pull Biggs appointment. The reason, according to Harvey's PR people was that Biggs had talked out of school too much, telling reporters about his appointment before Pitt had all his ducks in a row. Right. If you believe that I have a set of Enron pro-formas to sell you.

The news that Pitt was backing away from Biggs sent the two Democratic commissioners, Roel C. Campos and Harvey J. Goldschmid, into a tizzy. Pitt had promised they would be consulted on such matters and, well, somehow he had forgotten to tell them about his change of heart.
All this gets more even more Machiavellian when you consider that Michael Oxley, the Ohio Republican who is chairman of the House Financial Services Committee, also opposes Biggs solely because he would be an aggressive regulator. After all, what has happened to indicate that the accounting profession needs an aggressive regulator?

"This is a very important moment in trying to clean up the problems that we tried to address," House minority leader Richard Gephardt said. "If we go back to allowing the industry to have influence on who will do this, we will be right back where we started from."

The selection of the new oversight board is widely considered to be the most important issue now on the agenda of the S.E.C. But now the whole thing is in turmoil.

Nice work Harvey.

Venturing For Fun and Profit: As investors open their third quarter 401K statements they will feel like a freight train hit them. Actually it was more like several freight trains. As professional investors around the country unravel the layers of fraud and deception that led to the 1990s stock bubble they are finding players at every level.

Among those players were venture capital firms. They put up the money to start most of the hundreds of dot-com companies that went on to issue IPOs, that went on to get ever-so hot, that went on to become worthless.

Having been part of one of those dot-com companies I can tell you with some authority that what many venture firms did during that period was engage in enormous pump and dump schemes. Here's how it worked:

A new dot-com would issue a call for $10 million in funding
VCs would show up and tell them they really needed $20 million. That they needed it to grow. Grow like a tumor. Hire people, lots of people. Get your marketing people out there and have them mark territory like male dogs. And, don't worry about making money. Just get your brand recognized. Pump the company up fill of marketing hot air and look impressive.
Then they would take the company public, sell their shares into the IPO updraft and get the hell out of Dodge before the whole thing collapsed under the weight of it's own fiction.
Of course they had a lot of help from their friends at Wall Street investment banks who underwrote the stocks and whose analysts hyped the stocks long enough for VCs and insiders to sell them to the suckers who now hold all that worthless paper.

Unlike little investors who pretty much have to just take their licks and sulk off, institutional investors can do something about this. And, some have begun to strike back. Last Friday, for example, the University of Texas published the financial performance of all its investments — including venture capital funds.

Whoa! The VC's were not at all pleased to have their cover blown like that. The disclosures came over the fierce objection of venture capitalists, with whom the university signed confidentiality agreements promising not to disclose the figures. (Think about that for moment. Why would a VC want an investor to sign such an agreement unless they already figured the investments they sold the customer would be something they might not want to see in the papers."

In Texas, Mark G. Yudof, chancellor of the University of Texas system, said that the university's investments should be "publicly accountable." Yudof predicted that more public institutions would follow suit, particularly in light of the recent spate of accounting scandals.

Now we will see if VC's can be publicly shamed into less predatory behavior.

Mean and Vindictive Department: When a Washington DC paper panned his daughter's piano recital, President Harry Truman shot off an angry letter to the editor. But, when the Dallas Morning News recently wrote a story about the failed congressional bid of the son of House Majority Leader Dick Armey, (R-Tx) all hell broke loose.

Armey retaliated against his home-state paper by squirreling away language in a totally unrelated military spending bill that would force the paper to sell off one of its most valuable Dallas media properties.

According to the Washington Post, Armey privately asked Republican lawmakers to place a provision in this year's military construction bill.
Never pick a fight with a man who has nothing to lose. And, Armey has nothing to lose. He has already announced his retirement form Congress at the end of his current term. But, other Texas Republicans do have something to lose and they are not about to help Armey get even with the Dallas Morning News.

Texas GOP colleague Sen. Kay Bailey Hutchison, for example, opposes Armey's measure. She's not retiring.

"The dispute between Armey and Belo stems from the Dallas Morning News' reporting on his son Scott, a former Denton County judge who hoped to succeed his father but lost in an April 9 GOP primary runoff. Armey said the newspaper engaged in "vicious unprofessionalism" with a series of articles this year critical of his son's judicial record, and since his son's loss he has refused to speak with Belo reporters." Washington Post.

Of course, using a military spending bill at a time of war to get even with a newspaper isn't unprofessional either.

-- Tony
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