Why Democrat?

“I just p[osted an interesting article on the TAXES thread. It may be worth repeating here:

This came off of a Green Party Website. An interesting declaration of priciples:

DECLARATION 6. Stop taxing and regulating the self-employed out of business.
Taxes
The self-employed are the highest taxed, most regulatory burdened, least protected Americans. Between 1950 and 1990, the Self-Employment Tax rate increased 1,000%.
When compulsory coverage of Social Security was extended to the self-employed in 1950, the self-employed paid only the employer's share of the Social Security Tax; then equal to a flat tax of 1.5% on all earned income below $3,600. Today, the self-employed pay both the employer and employee shares of the Social Security Tax, at a combined rate of 12.40%. Together with their contributions to Medicare, the self-employed pay a flat tax of 15.3% on all earned income below $72,600-- there are no deductions. This is called the Self-Employment Tax.
No other income group in the nation pays a draconian flat tax anything like the Self-Employment Tax. It exists because the self-employed have virtually no representation in Congress-- despite the fact that they make up about 15% of the full-time work force in the United States, and are the backbone of rural and many local urban economies.
In 1983, while the Reagan Administration was lowering income taxes on the highest earned and unearned incomes, the Self-Employment Tax was structurally changed so that the rate increased from about 10% to 15.3%. From 1980 to 1990, the earned income to which the Self-Employment Tax was applied also increased; nearly doubling, from $25,900 to $51,300. In all the ballyhoo of the 1980's about tax cuts and supply side economics, not a peep was heard from the Democrats or Republicans about this crushing Tax burden that had been added to the lives of the self-employed.
The relationship today between the self-employed and the self-employment tax is that many self-employed people have to lie on their tax returns to provide for their families. This "criminal activity" further adds to the self-employed's silence in the American plutocracy.
There are three major producer groups in the United States: corporations, government, and the self-employed. The effect of the 15.3% Self-Employment Tax on the self-employed's abilities to produce has been that of a ball and chain; money that could have been invested in their businesses is taxed away.
The Self-Employment Tax should equal only the the employer's share of the Social Security and Medicare contributions-- 7.65%. With this savings the self-employed would have a better chance to invest in themselves and their businesses. They would also be better able to compensate themselves for protections taken for granted in corporations and government, but lacking in their own producer group, i.e.., minimum wage, workers compensation, and unemployment insurance.
Regulations
Regulations for product safety and effectiveness can be devastating to both the consumer and the small producer because these regulations are often too expensive or too time consuming for the small producer to comply with. When small producers go out of business because they can't afford to comply with regulations, rather than because they offer a useless product or are a proven danger, neither the consumer nor the economy is served.
Representatives of corporations, rather than consumers or small producers, often set "government" standards. These regulations regularly drive small producers out of business, or keep producers from entering the market at all.
For instance, in December 1997, the USDA submitted for public commentary the National Organic Program proposals. Under the proposals, a condition of certification for an organic farmer would have been the submission of a tissue analysis test every five years. This test could have cost more than $10,000 and would have been prohibitively expensive for many small farms, thereby preventing these farms from becoming USDA certified organic. Under the National Organic Program proposals, those farmers that were not certified as USDA organic would have been prohibited from using the word "organic" in packaging, or in any other way representing themselves as "organic" in sales.
The proposed rules also included practices that were banned by state and private organic certifiers across the country; sewage sludge on farmland, irradiation of food, genetically engineered organisms, thousands of synthetic chemicals as inert ingredients in agricultural formulations, 20% non-organic feed for livestock, short time periods between the medication of cows and the sale of milk, no access to the outdoors for livestock... Food safety did not appear to be the concern of the USDA.
What was of concern to the USDA was the fact that, for a large section of the public, organic certification had become a higher standard of food safety than that offered by the USDA. Had it become law, the 1997 National Organic Program proposals would have succeeded in undermining the credibility of organic food as a safe alternative to conventionally produced food, and at the same time made the "organic" market more accessible to corporate producers and processors.
Under the law, self-employed producers are liable for damages their products may cause. Corporations are liable for damages as well, but, as legal entities, it is corporations and not executives of corporations that are usually held responsible. To escape personal liability is one of the primary reasons businesses incorporate.
The corporate entity shield is commonly used by corporate executives when they make potentially unsafe decisions about their products. In the event of a product problem, a corporation can cease to exist through bankruptcy and corporate executives may move on, their own personal wealth usually intact. This is not true of the self-employed producer, whose earnings and assets may be liable unto death for the self-employed producer's mistakes.
When regulations for safety and efficacy are written, distinctions in accountability of the self-employed producer and corporations should be taken into account. Regulations that would be too costly or burdensome for the self-employed producer should not be applied to this sector of the economy when the judgment of the consumer and the integrity of the self-employed producer are society's own best protection.
Americans might also consider that when government creates regulations and taxes discouraging to the self-employed, it fosters a system in which individuals owe a debt to society which must be paid through corporate or government employment. This is not what the founders of this country had in mind when they created the Constitution, nor is it a desirable future for anyone who values being their own boss. I strongly believe that the right to be self-employed is as fundamental to American freedom as the right to privacy.
Antitrust Enforcement
Recently self-employed producers have been banning together to challenge the small number of corporate purchasers that dominate their respective industries (doctors in private practice versus HMOs, independent truckers versus shippers, farmers versus processors). Corporations and government have responded to these challenges by applying anti-trust laws to these self-employed groups; their common demands are punished by the law as price fixing. In markets dominated by the purchasing power of a few giant corporations, it is a profound and perverse twist of antitrust law that antitrust statutes are not being applied to this monopoly power, but to the thousands of producers trying to unite against their domination. The enforcement of antitrust law against the self-employed must end.
If elected to the US Senate, I promise to sponsor the Right to Be Self-Employed Act. This Act would reduce the Self-Employment Tax to 7.65%, prevent anti-trust law from being applied to the self-employed, and require the federal government to study the effect of mandated regulations on self-employed producers before such regulations become law.”

“OUCH! I've turned into cut-and-paste-man. But I just can't resist these:

Politics Tainted Green: EPA Uses Enforcement as Partisan Political Weapon
by David Ridenour
The Environmental Protection Agency (EPA) seems to be more concerned about partisan politics these days than protecting the environment.
A case in point is its recent prosecution of Virginia-based Smithfield Foods, Inc., the major employer in a small town best known as the home of Smithfield hams.
Last year, the EPA brought a $125 million suit against Smithfield alleging that the company had dumped excessive amounts of waste into the Pagan River, a tributary that flows into the Chesapeake Bay. Smithfield eventually was ordered by a U.S. District Court judge to pay $12.6 million in fines - just 10% of what the EPA had sought. An appeal is pending. Both the process by which this fine was imposed and the timing of the suit, however, suggest that the EPA's legal action had more to do with politics than environmental protection.
The EPA's complaint against Smithfield Foods centered on allegations the company had exceeded its permit limits for discharging phosphorous and nitrogen into the Pagan River. Smithfield never disputed the charge, but noted it had written permission from the Commonwealth of Virginia to exceed those limits under a quid pro quo arrangement with state officials.
Indeed, it did. Democratic Governor Douglas Wilder signed a consent order in 1991 permitting Smithfield to continue disposing of its waste - above permitted limits - until a sewer line could be constructed connecting the company's plants to a public waste treatment facility near Hampton, 17 miles away. In return, Smithfield forked over several million dollars to build the new sewer line. The agreement seemed like a "win-win" resolution for the state, for the company, for taxpayers and - above all - for the environment.
The Pagan River may not yet be 100% pure, but it is measurably cleaner than it was a few years ago and getting cleaner with each passing day. The Wilder Administration entered into the consent agreement in part to end a suit by Smithfield challenging new phosphorous limits imposed in 1988 that the company contended were beyond the ability of current technology to meet. The Commonwealth of Virginia believed it had the authority to negotiate such a deal because the federal EPA signed an agreement in 1975 giving Virginia primary responsibility for enforcing the Clean Water Act within its borders. What's more, the EPA was well aware of the consent agreement when it was enacted in 1991 but raised no objection to it until 1997, which just happened to be an election year in Virginia.
Republican State Attorney General James Gilmore, the state official responsible for prosecuting environmental violators, was running against Democrat Don Beyer for governor, and the Clinton Administration wanted to pin a "scarlet letter" to Gilmore's lapel. Creating a public perception that Virginia was soft on environmental violators would sabotage Gilmore's election chances, it reasoned.
Unfortunately, such blatant politicking by the EPA is not confined to the Smithfield case. A recent report written by Dr. Bonner Cohen for the National Wilderness Institute documents a clear pattern of political abuse at the EPA. Among the report's findings:
* In March, 1995, EPA Acting Assistant Administrator Gary Foley asked the director of the EPA's lab in Atlanta to urge other EPA employees to call House members they knew personally and urge them to vote against a bill that would cut EPA funding. Such lobbying by government officials during business hours is a clear violation of the Anti-Lobbying Act of 1940.
* Since 1995, the EPA has handled requests for "detailees" in a partisan political manner. Detailees are EPA employees who are routinely loaned to congressional offices needing technical assistance. During that period, all four requests made by Democrats for new detailees have been approved while all three requests from Republicans have been rejected.
* Over the past several years, top EPA officials have redirected some half-million dollars in federal funds earmarked for Chesapeake Bay clean-up efforts away from a state and local government advisory council to a non-profit organization entirely under EPA's control. There's little doubt that the shift in funding is aimed at circumventing state and local government authority over Bay policy - clearly a misuse of federal funds and a jarring conflict of interest.
With all these political activities, one wonders how effective and, indeed, how just the EPA can be in carrying out its principal mission of safeguarding the environment. Apparently, the nation's top environmental enforcers now need some policing of their own. Congressional oversight committees should take the hint and get their own cops back on the beat.”

“arc, forget the Democrats or Republicans, your plank is straight from the Green Party ”

“Arc, both Harkin (D) and Lugar (R) have shown support for the Farm Bill . However, it would call for more governmental intervention that you advocate. What separates Democrats and Republicans on issues like this?”

“Arc: I don't have time to read all those massive cut and pastes, but I read the one on Smithfield and it seemed rather unconvincing. Why were discharges so high 6 years after the consent decree regarding the building of the sewer was signed? If the politics were that blatant, why did the judge order a 12.5 million dollar fine (and what is the status of the appeal)? And way make hay over the fact that the EPA asked for a bigger fine than the judge granted... that seems routine?”

“'Increase USDA's commitment to research and commercial development of agriculturally based renewable energy and industrial raw material supplies.'

he he he
Are they talking about methane emmisions from cows?”

“Still thinking about jerky aren't ya Biz?”

“BTW: I looked up David Ridenour and found out he is a very conservative anti-environmental advocate with the National Center for Policy Research. He put out some seriously misleading stuff at http://www.columbia.edu/cu/conservative/envmyt.doc.”

“If Enron type co's have been producing the grease,used in the bearings ,on which the U.S. economy skates,I think any thing but down hill is myth.”

“Here is a pretty compelling (and much more thorough) expose of the anti-environmental experts who populate corporate advocacy groups with quasi-environmental names like the National Wilderness Institute whose work Ridenour references:

http://www.ewg.org/pub/home/clear/by_clear/ShowMe.html

If you follow the money, it is pretty easy to see how corporates are spendign mega-bucks to hire scientists and phony experts to argue in directions diametrically opposed to the directions in which freer forms of inquiry have lead.”

“as opposed to who? The national enviro groups that are spending megabucks to hire scientists and phony experts to argue in directions diametrically opposed to the directions in which freer forms of inquiry have lead?

The environmental industry puts knowingly false and misleading statements on their websites confident that the average yuppie urbanite doesn't know any better and continues to send money.”

“NATIONAL DESK | April 26, 1998, INDUSTRIAL GROUP PLANS TO BATTLE CLIMATE TREATY

By JOHN H. CUSHMAN Jr. (NYT)
Late Edition - Final, Section 1, Page 1, Column 4

Industry opponents of a treaty to fight global warming have drafted an ambitious proposal to spend millions of dollars to convince the public that the environmental accord is based on shaky science.

Among their ideas is a campaign to recruit a cadre of scientists who share the industry's views of climate science and to train them in public relations so they can help convince journalists, politicians and the public that the risk of global warming is too uncertain to justify controls on greenhouse gases like carbon dioxide that trap the sun's heat near Earth.

An informal group of people working for big oil companies, trade associations and conservative policy research organizations that oppose the treaty have been meeting recently at the Washington office of the American Petroleum Institute to put the plan together.

Joe Walker, a public relations representative of the petroleum institute who is leading the project, said in an interview that the plan had been under consideration for about two months and was ''very, very tentative.'' Mr. Walker said no industry executives had yet been approached to pay for it.

But an eight-page memorandum that he wrote shows in detail how some industry lobbyists are going about opposing the climate treaty.

It is a daunting public relations task. Whenever the treaty's advocates, including the Clinton Administration, discuss global warming, they present the science as essentially settled and unchallengeable, and they compare dissenting scientists to discredited apologists for the tobacco companies. That view has become widely accepted among reporters and the public.

Although mainstream scientists do identify considerable uncertainties in their climate predictions, which are based on computer models, they are increasingly confident that global warming is a serious problem and often say that the uncertainties do not justify inaction.

Based on the latest science, most of the world's nations agreed in Rio de Janeiro in 1992 that industrial nations should cut emissions of greenhouse gases, and the treaty was modified last year to require further reductions in emissions to levels well below those of 1990, over the next 10 to 15 years. But the United States Senate has not yet agreed to that treaty provision, which could require deep reductions in American consumption of fossil fuels.

Documents describing the proposal to undermine the mainstream view were given to The New York Times by the National Environmental Trust, whose work in support of the global-warming treaty is financed by philanthropic organizations, including the Pew Charitable Trusts, the biggest of the nation's pro-environment grant makers.

Phil Clapp, the president of the environmental trust, said he obtained the papers from an industry official. Exposing the plan at this stage, Mr. Clapp said, would probably ruin the effort to raise money to carry out the plan.

Industry representatives confirmed that the documents were authentic, but emphasized that the plans had not been formally approved by participating organizations. The document listed representatives of the Exxon Corporation, the Chevron Corporation and the Southern Company as being involved. Representatives of Chevron and Southern acknowledged attending meetings on the project; the Exxon representative could not be reached for comment.

The draft plan calls for recruiting scientists to argue against the Administration, and suggests that they include ''individuals who do not have a long history of visibility and/or participation in the climate change debate.''

But among the plan's advocates are groups already linked to the best-known critics of global-warming science.

They include the Science and Environment Policy Project, founded by Fred Singer, a physicist noted for opposing the mainstream view of climate science. Frederick Seitz, another prominent skeptic on global warming, is involved with two other groups mentioned in the plan: the George C. Marshall Institute, where Dr. Seitz is chairman, and the Advancement of Sound Science Coalition, where he is on the science advisory board.

On Monday, the National Academy of Sciences disassociated itself from the most recent effort to drum up support among skeptical scientists. That effort came in the form of a statement and petition on global warming circulated by Dr. Seitz, a physicist who was president of the academy in the 1960's.

The petition, attacking the scientific conclusions underlying the treaty on climate change, was accompanied by an article that was formatted to resemble one that might have been published in the academy's prestigious peer-reviewed journal. It was not.

The draft plan, recently discussed at the oil industry offices, calls for giving such dissenters on climate science ''the logistical and moral support they have been lacking.''

It also calls for spending $5 million over two years to ''maximize the impact of scientific views consistent with ours on Congress, the media and other key audiences.''

It would measure progress by counting, among other things, the percentage of news articles that raise questions about climate science and the number of radio talk show appearances by scientists questioning the prevailing views.

The document says that industry's polling, conducted by Charlton Research, has found that while Americans see climate change as a serious threat, ''public opinion is open to change on climate science.''

Supporters of the plan want to raise money quickly to spend much of it between now and the November negotiating session in Buenos Aires, where important details of the international treaty are to be decided.

A proposed media-relations budget of $600,000, not counting any money for advertising, would be directed at science writers, editors, columnists and television network correspondents, using as many as 20 ''respected climate scientists'' recruited expressly ''to inject credible science and scientific accountability into the global climate debate, thereby raising questions about and undercutting the 'prevailing scientific wisdom.' ''

Among the tasks, the petroleum institute's memorandum said, would be to ''identify, recruit and train a team of five independent scientists to participate in media outreach.''

What the industry group wanted to provide, the memorandum said, was ''a one-stop resource on climate science for members of Congress, the media, industry and all others concerned.''

The industry group said it wanted to develop ''a sound scientific alternative'' to the Intergovernmental Panel on Climate Change, a large group of scientists advising the United Nations that has published the most authoritative scientific assessments of global warming. That panel has predicted that the next century will bring widespread climatic disruptions if actions are not taken to reverse the accumulation of greenhouse gases in the atmosphere.

The draft plan suggests that despite industry efforts to convince the public that the climate treaty would be costly to carry out and unfair to the United States, the treaty remains popular partly because environmentalists are winning the debate on the science.

''Indeed, the public has been highly receptive to the Clinton Administration's plans,'' the memorandum said. ''There has been little, if any, public resistance or pressure applied to Congress to reject the treaty, except by those 'inside the Beltway' with vested interests."”

“The "environmental industry" is one of those double talk terms that corporate mouthpieces like to spread around. The anti-environment experts frequently hide who they are. If you look at the bucks available to both sides (compare Exxon to the Sierra Club for example) you see which side the money is on. The solution: think for yourself, use reason, examine the evidence.

There are no huge profits from the enviro-industry. There is no way to make billions off of having the US follow the Kyoto protocol. Different environmental groups have been guilty of overblown hype, but the attempt to discredit the bad news on the environment is very reminiscent of the attempts to discredit the medical news about tobacco... only the corporate interests are many many times stronger and richer.

For years I received the "grass-roots" pro-smoking newsletter paid for by the Tobacco corporations. The anti-environmental stuff is very similar.

Just because the corporate shills are trying to blow smoke in our faces doesn't mean we should support every environmental regulation. I think the anti-tobacco regulation has gone too far, but when it comes to medical facts, the advocates of "over-regulation" seem to have it right.”

“I think we should have universal health care for pets

http://search1.npr.org/opt/collections/torched/atc/data_atc/seg_140951.htm”

“Government paid sex change operations, yeah, that's the ticket. California leads the way again. Kleetn's excited.

Everybody has his own spin. Do the research, check the sources, and make up your own mind.

I couldn't find what I thought would be a strong argument about the EPA missing the boat on enforcement. Although I have read articles that dealt with both of that issue in the past. It would take more research time than I can devote this week. It's hard to find articles where environmental groups talk badly about one of their own. Using the EPA as a politically partisan weapon? You betcha! I have no problem believing in the politicalization of any government department. These departments have their self-interest to look out for.

I haven’t read much that doesn’t have a misleading spin one way or the other. I am a little disappointed that violin offers no additional information sources. My two friends say they are more than willing to provide me with a reading list. But then, they are both pro free-market. I even asked one of my friends to join our discussion but he’s going on vacation to the lovely State of FLORIDA and it would be a couple of weeks before he gets back. I think most folk’s attention span, for this issue, will have died long before that. Maybe I can bring it up again. I can start a thread titled “The Battle for World Economic Domination” and listen while people who know far more about the subject than I do hash it out.”

“'Just because the corporate shills are trying to blow smoke in our faces doesn't mean we should support every environmental regulation.'

Yes.

It is an interesting debate because we want these products companies offer, at the lowest price possible, without harm to the environment. But we want the companies to deal with the mess at the end of the day. Working at a strip mine over the summer when I was in college was a very enlightening experience.”

“Maintain the ability to see both sides and don't get too emotional about it. Remember, things are moving forward despite what we hear in the media. And nothing happens overnight.”

“But I do agree with you arclite. Pacifism is a poor excuse for not educating yourself.”

“"...deal with the mess at the end of the day..."

That's the core of the problem. How much clean-up do we pursue? You can spend an infinite amount of money pursuing every last detectable impact. Spend enough on mitigation and that company cannot operate at a reasonable return on investment and goes out of business. Then you have no summer job, local government loses a tax base, and the product is made in some third world country at an even greater environmental impact.

The only sound way of setting environmental policy is with a least-cost-plus-loss model.”

“a least-cost-plus-loss model

come again?”

“Basic economic risk analysis.

Mitigating the first few percent of any impact is cheap and easy. Increasing mitigation costs increasingly more. You are spending more and more to accomplish less and less mitigation (diminishing returns). 100% mitigation costs approach infinity. At any point along the scale sum the total cost of the impact plus the total cost of mitigation. You get a 'U' shaped curve. The the least total cost is the bottom of the U. You also add back in the positive benefits of the impact, but we will ignore that for now.

Now the problem is some of the costs are subjective or even variable. Some may not be known for years to decades. Some lessen over time. So any mitigation practices must be periodically revisited and amended as needed.”

“Bush #43 doesn't believe the election results---maybe he thinks he's Gore #0.isn't this typical for a Rep.prez, give anything away for a TAX BREAK.”

“If only PBS would broadcast this baby:

Attention all opera lovers! The Metropolitan Opera has commissioned an operatic work on Bill Clinton for its next season: "La Bubba Vita" Composed by Giuliani Veritas (in Italian).

Act I. The Situation: Bill Clinton has been elected President of the United States by an overwhelming margin. The Republicans are devastated and angry and are trying to find their way back to power. As the curtain rises on Act I, the House Republicans are meeting with Ken Starr with the object of trying to find a way to remove Bill Clinton from the Presidency. The opening chorale "We Must Find a Way" (Creato grandissimo floozi scandala) is sung as a sextet. In an impressive recitative, Tom Delay sings "Where Will We Find a Helper?" (Dredgi uppulia una granda bimba.) The House Republicans exit.

Paula Jones enters stage right with a mirror, singing her plaintive "Why Can't I find a Man?" (Mia schnozola es humongo.) Tom Delay and Newt Gingrich enter from the other wing. They spot Paula and sing the duet "Why Not Her?" (La flooza perfecta.) They meet and take Paula to a small café where they hatch their plot in hushed tones. Paula tells them of her meeting in a hotel with Clinton years earlier and how her fortunes have collapsed since then. Delay and Gingrich offer to help. They sing the aria, "Your Luck has Changed" (Nozjobbo e'rewardo).

Act II. The House Republicans reconvene with the news of Paula's revelations. They sing in jubilation "We Must Tell the World" (Fono tabloido). The rear curtain raises to reveal the Chorus of Media who sing the chorale, "Tell Us More, But Only the Truth" (Sexio scandala hypo sweepi). Gingrich enters with Pat Robertson. They sing the duet "He Must Go" (Hypocriti pious crappola). Robertson offers to make time on his television program to expose the charges.

At the House Republicans' suggestion, Paula initiates a lawsuit. The Paula Jones scandal becomes the topic of conversation throughout the country. The Chorus of Lawyers enters from the right to sing the jubilant grand chorale "We Must Do Our Duty" (Multi, multi grande moola). Ken Starr meets with the House Republicans to plan the next steps. They sing the aria "We Will Save the Country" (Sleezi connivo, la media soccittuppo). Starr promises to convene a grand jury which will send charges to the Congress. He sings "The Truth Will Be Known" (Whitewater non starto, il probo la flooza epidemio). The Chorus of Lawyers sings a reprise of "We Must Do Our Duty" as the act ends.

Act III. Linda Tripp enters the stage arm in arm with Ken Starr. She is wearing a headset. She is singing "Monica Is My Dearest Friend" (Io sono la wickida witchi occidenta). She tells Starr about the secret tapes that she has made of conversations with Monica Lewinsky. Starr takes them from her and sings "We've Got Him Now" (Presidente droppo pantaloni). Starr hurries off to the Grand Jury to call Monica as a witness.

In Scene 2 Monica enters the grand jury room where the Chorus of Lawyers asks her questions. They sing the recitative "How Did It Happen?" (Panti hongo, la flashi). Monica sings the long passionate aria "We Were Meant for Each Other" (Nonsmoko El Pruducto, Phalli symboglio).

In the third scene, Hilary and Bill are sitting in the Lincoln Bedroom talking about the revelations about Monica. Hillary sings "I Will Stand by You" (Tu jercho estupido, io removo tu equippamento). Bill replies with "She Was the Only One" (Non conto Gennifer, Paula, piu multi bimba forgetta). They embrace.

Act IV. Sam Donaldson is interviewing Henry Hyde in the Capitol Building. The chorus of Lawyers hums in the background. Hyde sings the aria "We Believe in Something" (Impeaccho hippi bastardo). Donaldson sings a recitative in answer, "We Only Want the Truth" (Toupee eslippo). The great trial begins in the Senate. Trent Lott reacts to public opinion polls showing that the President has a 76% approval rating with the public with the poignant aria, "What Is Right Is Not Popular" (Partia repubblico commitini Suicido).

The Chorus of Lawyers sings the chorale "Principles Come First" (Mi adultero non conto). With great flourish, Henry Hyde, Bill McCollum, and Tom Delay stand before the Senate to present their case. They sing the somber trio "How Can You Not Convict?" (Evidenso multi flimsioso). Finally in a moving chorale, the Chorus of Lawyers sings "For the Good of the Nation, We Must Acquit" (Senatorios non stupido). After the vote is announced, Henry Hyde, Tom Delay, Trent Lott and Bill McCollum leave the Senate Chamber singing the grand quartet "We Still Know the Truth" (Wasto multi millioni) as the act ends.

Epilogue. The President sings the contrite aria "I Am Very Sorry" (Revengo futuro furioso) as the Chorus of Media circles him, shouting their questions. They sing "Who Will Now Believe Us?" (Publicca desgustanta es in media). Monica Lewinsky crosses the stage with her new literary agent, Ken Starr. They sing "It Is Still Not Over" (Publishi grande bucchi, dollare millioni), as the curtain falls.”

“Good one arc.”

“I liked what I heard on NPR this afternoon. Something to the effect of, "Regulattion of industry indicates a flaw in the design of a product".”

“LOL Arc! I loved the Italian song titles.”

“In the 1990s, their faces were everywhere. And it wasn’t just Jack Welch and Louis Gerstner and John Chambers who earned star treatment. CEOs like Jeff Bezos and Michael Armstrong and Richard Brown -- executives without hall-of-fame stats -- also turned up on the covers of Fortune and Forbes.

The huge pay packages earned by superstar CEOs were supposed to make them work extra hard for shareholders. And some CEOs did create massive profits for investors. But now we’re also discovering that the incentives were so great that some CEOs cheated in order to earn them.

Poster children: Xerox and Computer Associates

Take the case of Xerox. According to the Securities and Exchange Commission, Xerox executives used accounting tricks to avoid missing Wall Street profit targets. In the fourth quarters of 1998 and 1999, the fake profits accounted for almost 40% of Xerox’s pretax earnings. Strip away the accounting tricks and Xerox would have missed targets in 11 of 12 quarters in 1997 through 1999.

The SEC says former Xerox CEO Paul Allaire and his team cheated because it made them a lot of money. Hitting Wall Street’s targets kept Xerox shares high enough that executives could collect $5 million in performance bonuses, according to the SEC, and $30 million from stock sales.

Or how about the compensation package that the SEC is investigating at Computer Associates? The company decided that then-CEO Charles Wang and two other executives would receive 20 million shares if the stock closed above $53.33 for 60 days within any 12-month period between 1995 and 2000.

Following a series of positive earnings reports, the stock did exactly that in may 1998. But just two months after the grant, the company warned of slowing demand, and in October 2000, Computer Associates changed to a more conservative accounting standard.

Computer Associates stock currently sells for less than $20 a share.

Suspicion extends even to blue chips

Linking CEO compensation directly to earnings growth certainly didn’t create the stock-market bubble that burst in March 2000. But awarding huge sums of money for short-term earnings growth certainly did keep the bubble inflated for extra months or even quarters. Even conservative companies such as Lucent Technologies succumbed to the temptation to use accounting tricks to make it look like revenue was still growing even after it had stopped.

Now investors reading through spring proxy filings wonder what other CEOs fudged the numbers in order to put a few extra million in their pay envelopes. In the current mood of cynicism, all companies and all CEOs are guilty until proven innocent.

Even legendary former CEOs like IBM’s Gerstner and General Electric’s Welch are getting second guessed. Is it just coincidence that the companies these guys formerly headed disappointed Wall Street almost immediately after they left?

It doesn’t help investors’ nerves to know that, in January and February, the SEC launched 49 new investigations into financial reporting. That beats the former record of 18 new investigations in the period -- set just last year.

Arctex, is this the "Free Market Forces" you are talking about?”

“The above was quoted from Jim Jubak, CNBC.com.

By the way, enjoyed your "Opera".”

“They do to me, Naviguesser. Unless there are criminal actions. In that case, the guilty need to have their ill-gotten cash confiscated. This is best accomplished by laws.

Or, we could get the government to regulate greedy, power hungry people. We know for sure that our government reps can't be bought and aren't greedy for money or power. They can impose fines that are paid directly into government coffers. Too bad if the citizens don't get any benefit, but sacrifices must be made somewhere. I always trust the government to do the right thing to protect me, doesn't everyone?”

“I guess we got 2 evils. Who do you trust less Enron or Congress?

See you Monday. I'm off to the desert to watch the Lyrid meteor shower.
Have a nice weekend.”

“Fantastic, Nav. Have a great time. Watching a meteor shower is a great metaphor for our discussion about being rained on. Don't forget to DUCK!”

“To be a Democrat...

-You have to believe there was no art before federal funding.

-You have to believe that the same public school idiot who can't teach 4th graders how to read is qualified to teach those same kids about sex.

-You have to believe the AIDS virus is spread by a lack of funding.

-You have to believe that guns in the hands of law-abiding Americans are more of a threat than nuclear weapons in the hands of the Chinese.

-You have to believe that global temperatures are less affected by cyclical, documented changes in the brilliance of the Sun, and more affected by yuppies driving SUVs.

-You have to believe that gender roles are artificial but being gay is natural.

-You have to be against capital punishment but pro abortion on demand --in short, you support protecting the guilty and killing the innocent.

-You have to believe that businesses create oppression and governments create prosperity.

-You have to believe that hunters don't care about nature, but pasty, loony activists who've never been outside Seattle do.

-You have to believe that self-esteem is more important than actually doing something to earn it.

-You have to believe the military, not corrupt politicians, start wars.

-You have to believe the free market that gives us 500+ channels can't deliver the quality that PBS does.

-You have to believe the NRA is bad, because they stand up for certain parts of the Constitution, while the ACLU is good, because they stand up for certain parts of the Constitution.

-You have to believe that taxes are too low, but ATM fees are too high.

-You have to believe that Harriet Tubman, Cesar Chavez and Gloria Steinem are more important to American history than Thomas Jefferson, General Robert E. Lee or Thomas Edison.

-You have to believe that standardized tests are racist, but racial quotas and set-asides aren't.

-You have to believe conservatives are racists, but that black people couldn't make it without your help.

-You have to believe that the only reason socialism hasn't worked anywhere it's been tried, is because the right people haven't been in charge.

-You have to believe conservatives telling the truth should be jailed, but a liar and rapist belongs in the White House.

-You have to believe that Hillary is actually a lady.

-You have to believe that homosexual parades displaying drags, transvestites and bestiality should be constitutionally protected and manger scenes at Christmas should be illegal.

-You have to believe that illegal Democratic party funding by the Chinese is somehow in the best interest of the United States.”

“Tyco, Enron, QWest, Dynegy, Adelphia, Arthur Andersen, Global Crossings, Imclone.

Is arclite in hiding?

I think recent news points up some of the weaknesses in an unregulated market. The following New York Times article explains quite well how accounting changes permitting businesses to deduct the cost of stock options from income led to a more widespread use of options for executive pay thereby creating incentives for executives to use improper means to inflate stock prices. Capitalism is all about incentives.

Bush Failed to Stress Need to Rein In Stock Options
By GRETCHEN MORGENSON


George W. Bush wants to run corporate criminals out of town on a rail. But he is not trying to confiscate perhaps their most powerful weapon.

In his 27-minute speech on corporate responsibility, Mr. Bush spent less than 30 seconds tackling the issue that many believe is central: the issuance of huge amounts of stock options to top executives. Until this problem is addressed, true change will be slow to come to boardrooms.

Enron, Global Crossing, WorldCom. These corporate collapses have a common thread. By misrepresenting the financial position of their companies, executives at all these companies watched their stock prices soar and became richer in the process. After the misrepresentations were disclosed, shareholders and employees were left with little or nothing.

Stock options are crucial to both the misrepresentation and the enrichment that have caused a crisis of confidence in business and financial markets. Options are doled out as free money to executives and are the force behind the increasingly lucrative compensation packages at American companies. Because they are tied to the company's performance, they can be powerful incentive for executives to make their results look better than they actually are.

Because of the way options are treated in financial statements, they help executives "shade the truth," to use the president's words, by overstating a company's earnings and generating significant cash flow that has nothing to do with day-to-day operations. They also help companies bolster earnings by reducing and even eliminating taxes owed to the federal government. Since executive pay is often linked to a company's earnings, the overstatements that stock options produce can mean fatter paychecks for management.

"At its best, capitalism provides fair and reasonable rewards to managers and workers who deliver rewards to shareholders," said William R. Thomas, chairman of Capital Southwest, a publicly traded investment company in Dallas. "At its worst, capitalism provides inordinate, undeserved rewards to elite managers without regard for the rewards they deliver to shareholders."

Once a rarity, options are now ubiquitous at American companies; in the last 10 years, options have risen from 5 percent of shares outstanding at major companies to 15 percent. According to Sanford C. Bernstein & Company, a brokerage firm in New York, the value of such grants at the 2,000 largest companies rose to $162 billion in 2000 from $50 billion in 1997.

The numbers at some companies are enormous. According to Bear, Stearns, option costs at Microsoft came in at $3.3 billion last year, almost a third of the company's reported net income. Option expense was $2.6 billion at Cisco Systems and $2.5 billion at Nortel Networks. Cisco and Nortel reported losses for the year, without deducting the cost of their options from their results.

As options have become more popular, their salutary effect on company earnings has done so as well. Bernstein estimates that if the nation's 500 largest companies had deducted the cost of options from their revenues, their annual profit growth from 1995 to 2000 would have been 6 percent instead of the 9 percent reported.

Not surprising, WorldCom was a big user of stock options, and its financial results looked much better because of them. Adam Quinton, a telecommunications stock analyst at Merrill Lynch, said that of the large companies in the sector, WorldCom's earnings were most greatly enhanced by its option grants last year. Had the company accounted for its options as an employee cost, its earnings would have been 57.4 percent lower. In 2000, WorldCom's earnings would have fallen almost 30 percent, and in 1999, results would have been 22 percent lower.

When employees exercise options, the tax they owe on the transaction becomes a deduction for the company issuing the shares. As a result, companies that are heavy users of options, including Microsoft, Cisco Systems and Dell Computer, have erased much if not all of what they owed to the federal government in taxes in recent years. At Enron, for example, deductions for stock options helped eliminate more than $625 million in taxes that the company owed to the government from 1996 to 2000.

Companies reap another benefit when their employees exercise options. An employee pays the company to buy the shares outright. That generates excess cash flow, which only attentive investors will see has nothing to do with day-to-day operations. At WorldCom, for example, half the company's free cash flow in 1999 — $886 million — came from workers exercising options.

Proponents of options say that they help to align management's interests with those of shareholders. If an executive performs well, his or her company's stock price will rise and all stockholders will benefit.

These people argue against deducting the costs of options from companies' income because it would discourage the use of options and ordinary workers would be denied a source of wealth. Besides, these people say, option costs show up in the footnotes of companies' financial statements, so shareholders can assess their effects on results.
But in the current environment, arguing for an accounting practice that can be viewed as clouding a company's results rather than clarifying them is becoming tricky. And the argument that rank-and-file workers will be hurt most if companies stop issuing options loses credibility after an examination of corporate filings.

Top executives reap the primary share of options granted at most major companies. At WorldCom, for example, options received by Bernard J. Ebbers the last four years totaled 7.9 percent of those granted across the company. The top three executives received 18.5 percent of the companywide option grants in the period.

"What started as a tool for corporate good has really ended up in many cases as just another instrument to allow the siphoning of wealth that belongs to shareholders to senior managements," said Jonathan Cohen, portfolio manager at JHC Capital in Greenwich, Conn., and former chief of software and Internet research at Merrill Lynch.

Because options are central to what he calls executive overreaching, Martin Whitman, fund manager at Third Avenue Funds in New York, argues that options should be accounted for as an employee cost and run through the income statement. "The reason we have this management compensation mess is that there is no force to impose discipline on company managements," he said. "At least if you expense the options that would impose some discipline. It would be a way to ameliorate the excesses."”