Third Party & Independents Archives

December 12, 2003

Current Price of Free Enterprise

 

The following headline stories represent one 24 hour period of business news in America. Take a look. If this is what is in the headlines in 1 day, how much fraud, theft, cheating and bilking of American tax payers of 100’s of millions, perhaps billions of dollars goes on beyond the view of regulators, overseers and the media? And it goes on year after year after year.

 

The following headlines represent free enterprise under scrutiny and don’t even include the pension and 401K mutual fund scandals. And on the other side, free enterprise works diligently to prevent workers from getting together to negotiate a fair return for their work.

 

And Congress and the President continue to push for more deregulation. How much cheaper would a middle class family living be if the average American family was not footing the bill for all of this “FREE” enterprise. It is only free for the ones who get away with it. All of the rest of us pay dearly for it.  

 

Pentagon Finds Halliburton Overcharged on Iraq Contracts. The Pentagon found evidence of violations in billions of dollars worth of reconstruction contracts for Iraq that were awarded to Halliburton. By Douglas Jehl.

 

At I.R.S., a Systems Update Gone Awry. The $8 billion project to replace the Internal Revenue Service's aging file-keeping computer software is far behind schedule and over budget. By David Cay Johnston.

 

4 of 5 HealthSouth Executives Spared Prison Terms. A federal judge sentenced five former HealthSouth executives for their involvement in a sweeping $2.7 billion accounting fraud. By Reed Abelson.

 

Payments by Managers of Drug Plans Face Scrutiny. The pharmacy benefit companies that manage drug coverage for most working Americans commonly offer millions of dollars in payments to important customers when contracts with them are signed, according to industry executives and consultants. By Milt Freudenheim.

 

Labor Rallies in Support of Bill to Back the Right to Join Unions. In demonstrations and marches in 70 cities, the labor movement seized on International Human Rights Day yesterday to begin a campaign asserting that American corporations routinely violate an internationally guaranteed right: the right to unionize. By Steven Greenhouse.

 

West Texans Sizzle Over a Plan to Sell Their Water. West Texans and some state officials are calling for a halt to a deal that allows a group of well-connected Midland oilmen to sell water from the state's public reserves. By Ralph Blumenthal.

 

Ex-Tyco Executive Describes Plan to Hide Bonus Payments. By Bloomberg News.

Posted by David R. Remer at December 12, 2003 04:01 AM
Comments
Comment #4344

I think you really need to define what variety of deregulation you’re trying to point out. Putting up a bunch of headlines and saying that the President and Congress are pushing for more deregulation is somewhat misleading.

Posted by: JT at December 12, 2003 10:40 AM
Comment #4348

I don’t know how a Republican like yourself can even begin to say that. Look at your party’s platform, look at the so-called reforms that get passed, and listen to what your party’s rhetoric has been for the last ten years.

It is disingenuous, or at least foolish to say that the GOP has not been a major proponent of deregulation and laissez faire economics. Nothing personal.

Posted by: Stephen Daugherty at December 12, 2003 01:22 PM
Comment #4349

Good piece. That is said with the caveat that all such pieces offer more information than most readers are willing to absorb. Having read five of the seven articles on your list helps me agree with your premise.

I have participated in the mess created by deregulation of electricity sales in California. I find it difficult to believe that so many people can accept the cost of deregulation as “natural to free markets where so little competition can exist, as in electricity, natural gas and oil markets in particular.

The gruesome costs associated with upholding the international trade in oil include most of the defense budget and a lot of our dollar’s decline in value. The international trade posture we are stuck with which is based on free trade without appropriate regulatory restrictions is demolishing our middle class by exporting their jobs. Our balance of payment deficits added to our federal budget deficits spell disaster for our economy. The trade policies that create the balance of payments deficit are all supported by the idea of keeping the government’s hands off corporations operating in the unregulated world market.

At the same time we are supporting corporate farming with subsidies that make a mockery of free trade. We have huge amounts in the medicare Reform bill going to corporate welfare. Our biggest airplane manufacturer, Boeing, is in the middle of a scandal about a twenty billion dollar contract to provide leased refueling jets. It turns out that buying and maintaining the aircraft in the control of the government would have cost four billion dollars less. so much for the “free market’s efficiency. Thanks for the piece.
Henri

Posted by: Henri Reynard at December 12, 2003 01:43 PM
Comment #4351

“I don’t know how a Republican like yourself can even begin to say that. Look at your party’s platform, look at the so-called reforms that get passed, and listen to what your party’s rhetoric has been for the last ten years.

It is disingenuous, or at least foolish to say that the GOP has not been a major proponent of deregulation and laissez faire economics. Nothing personal.”

That wasn’t really the answer I was looking for, especially since I’ve apparently joined the Right without knowing it. What I’m actually trying to point out is that one administration takes the blame, while previous ones (from both parties) get away unscathed. Why, because they’re no longer in office?

Posted by: JT at December 12, 2003 02:23 PM
Comment #4352

I also meant to add that the idea of deregulation is somewhat ambiguous without being specific. Pretty much any administration can be accused of attempting deregulation in one form or another.

Posted by: JT at December 12, 2003 02:40 PM
Comment #4354

JT, your comment about any administration can historically be accused of deregulation in one form or another, is true. I am not opposed to free enterprise, it is a major player in the economic might of our nation and has been instrumental in creating a huge middle class, in the past.

My beef is with degree. This administration has with both hands with few exceptions, and this congress, been weakening oversight, investigation, and accountability standards set by government, and opening the way for more stories like those above. The prime mover of free enterprise is greed. There are a great many business owners and CEO’s out there who learned and practice the concept that what is legal, fair, and good for the customer is also good for the greed of stockholders and boards of directors.

But, without oversight, investigation and regulation, the door is wide open for far too many business owners and CEO’s who do not believe ethical standards & customer priority are beneficial to the bottom line except in their hollow PR campaigns.And their numbers are sufficient, as evidenced by one day’s headlines in the article, to warrant more regulation, oversight, and accountability, if the consumer’s and tax payers are to avoid picking up the tab for billions of criminal and unethical losses and fines being passed on to them.

It also seems, that with few token exceptions, designed for public appeasement, that the greater the rip off of the public, the less jail time if any is meted out. The fines may be stiff, but fines simply get passed down to the consumer or tax payer, in the end.

Posted by: David R Remer at December 12, 2003 03:44 PM
Comment #4364

It would appear that we do have some intelligent people left on this planet, then why are criminals in congress getting away with this crap?

Posted by: Marco at December 12, 2003 06:43 PM
Comment #4366

Most of those in Congress started out wanting to do good, but, found the threat of ostricization from their party and that great moral dilemma, you can’t do anygood if you are not reelected, too much for them.

Power corrupts, and absolute power corrupts absolutely, may be overstating the case, but there is a place for that wisdom in the answer to your question, Marco, I think.

Posted by: David R. Remer at December 12, 2003 07:24 PM
Comment #4369

Sorry, JT, if I mistook your politics, but I would say in response that deregulation, while being the fault of many over the years is: 1) and individual set of policy decisions for each person, and thus their responsibility; and 2) it is a major tenet of Conservative policy, which so far W. has been hard set on.

The reality is, Free markets are something of a science fiction idea. In reality there are many problems with globalization and deregulation that prevent the conservatives ideal market paradise from coming to pass.

In the real world, markets are an imperfect mashing together of fallible points of view. It is perfectly possible for tens of millions of people to be wrong to varying degrees about anything. People do not suddenly get smarter in herds.

In the meantime, pharmaceuticals, climate and ecology, space exploration, computer systems, power grids, sanitation, agriculture and other phenomena of our world occur with much more regard for the laws of physics, of chemistry, and of biology, than the laws and whims of human economic theory.

These systems only respond to our cleverness and our resourcefulness on their own terms. So if we skimp on enforcing certain pollution standards, certain standards of food preparation, or certain standards of safety on a space shuttle, the results will not simply be a political disagreement, they will be hard realities, that will define the true reality of what is economic and what is not.

The Administration at NASA may have saved a bunch of money here and there by not dealing with certain problems, but those savings to the taxpayer not only cost the lives of the crew, but destroyed a billion dollar spacecraft, and set our program back several years in relation to the rest of the world.

And those savings that corporations are gaining on behalf of the economy are coming out of our pockets, as our workers are deprived of employment, and as our economy is being shackled to the economies of so many other countries. It can be particularly bad for our foreign policy, as our trade interests override our humanitarian and homeland security interests.

Truth is, some of free market ideology is true. But it’s not all guaranteed any kind of truth, and we must be discrete about what kinds of conclusion we draw, rather than trying to dictate the way the real world works, strictly by political concerns.

Posted by: Stephen Daugherty at December 12, 2003 09:04 PM
Comment #4375

There is no question that the rational mind—gifted with foresight and the power of reflective thought—views the current push towards deregulation of everything, as disastrous, and ill-informed. The “market” has proven itself unworthy of our trust in most things, and its stewards need to be watched and regulated closely.

I wonder how much more Corporate America has to rape the average Americans before fowl is cried and common sense once more seeps into the American body politic. Unfettered greed, is never—let me say it again for effect—is never a good thing. The result of such behavior tells on the faces of those American who lost all in pursuit of more riches than one could reasonably expect to need or spend in one lifetime.

Posted by: V. Edward Martin at December 13, 2003 11:47 AM
Comment #4384

Mr. Martin, I agree with the jist of your argument. I would point out though that even this Administration is not opposed to strengthening regulation in areas of high public visibility like the S.E.C. where failure could result in loss of votes come Nov. 2004. In principle, republicans are opposed to regulation of free enterprise, but, in reality, some regulation of free enterprise is necessary to serve their ends, as well.

The hypocrisy of rhetoric by this administration is comedy at its finest. Deregulate energy and utilities where they can profit, and support more regulation by the S.E.C. where their own profitability could be threatened. Transparency in accounting for their vested interests, but, obsurity of every issue which could lose them votes at the poles. Ancient Greek comedy is alive and well in the Bush Administration.

Posted by: David R. Remer at December 13, 2003 02:49 PM
Comment #4392

I’m sorry to be obtuse, but you are going to have to be specific about what kind of deregulation you think is the culprit. The IRS, Union, and Tyco stories are especially odd in the context of this piece. What deregulation do you think has taken place in these contexts that needs to be reversed? The Haliburton matter has been noticed within months, so I’m not sure what you are saying about that either. You say the following is free enterprise under scrutiny. Do you think government run companies are more transparent than public companies? Perhaps a deeper knowledge of the corporate/government practices of France, Germany and Spain might disabuse you of that notion.

Posted by: Sebastian Holsclaw at December 14, 2003 04:59 AM
Comment #4410

Accounting deregulation enabled the kind of freewheeling accounting which in turn enable those companies to hide serious losses and to create false impressions of growth. Deregulation of corporate finance enable stockbrokers to get in bed with the banks that were financing the corporations debt.

The point is not that government run companies, but that they ensure that the companies are being run scrupulously, because a lack of law and order can be as damaging on Wall street, as it is to the inner cities. If an executives can steal from people as they please, whose going to invest?

Posted by: Stephen Daugherty at December 14, 2003 04:17 PM
Comment #4430

Sebastian, you asked for specifics, here are a few.

On June 25th EPA issued a key rule under the Act, a rule allowing each corporate polluter to increase its toxic air emissions by 245 tons (490,000 pounds) per year without public notice or public hearings.[1] A corporation simply has to file for an emission increase, stating that the requested increase is needed because of a change in production methods.
An industry-backed bill that opponents say will create the biggest telephone rate hikes in state history is on its way to Gov. Jeb Bush, following its passage Thursday in the House.
Will the lifting of regulations hurt those who receive assistance? As governor of Texas, Bush lifted a series of regulations placed on religious groups that provide social services.
Bush’s changes fully exempted faith-based drug treatment centers and children’s homes, for example, from the health, safety, accountability and quality of care guidelines required of Texas’ secular service providers.
SENATE REPUBLICANS BREAK WITH FCC, BUSH ON DEREGULATION
On a voice vote that saw several Republicans joining Democrats, the Senate Commerce Committee on Thursday voted to approve a bill that would reverse new rules approved by the FCC that increased the share of the national audience a TV owner can reach from 35 to 45 percent. The Republican-dominated commission had approved the deregulation on a 3-2 vote along party lines. It also had the support of the White House. But Republican Senator Kay Bailey Hutchison of Texas, who voted in favor of the committee’s bill Thursday, told reporters later, “What the FCC did was absolutely wrong. … I hope we’ll send a clear message to the FCC to start all over.” Nevertheless, Congressman Billy Tauzin, the Louisiana Republican who heads the House Energy and Commerce Committee, has vowed to kill the bill when it reaches the House.
The Federal Communication’s Commission vote on local telephone competition was today’s headline grabber, but the FCC also voted on a proposal that could have a lasting impact on how much consumers pay for high-speed Internet access.
The commission voted 3-2 to free the nation’s four “Baby Bell” local phone giants from rules that would require them to make their Internet access lines available to competitors at regulated rates.
AUSTIN (AP) _ Former Enron Corp. Chairman Kenneth Lay urged George W. Bush in repeated letters throughout his governorship to support restructuring the state’s electric market, according to documents released Friday.
In a Nov. 16, 1998, letter to Bush, Lay asked for continued support for electric deregulation, which would benefit the now-fallen energy giant.
“By passing such a bill, your administration would be responsible for providing the citizens of Texas with the equivalent of a tax cut which could immediately amount to $1.7 billion or more annually,” Lay wrote. “Please have your team let me know what Enron can do to be helpful in not only passing electricity restructuring legislation but also in pursuing the rest of your legislative agenda.”
In his two Texas gubernatorial campaigns, Bush received $312,000 from Enron officials, including Lay, who was one of his biggest donors.

Deregulation of the energy industry so they can pollute with impunity, tort reform so they can’t be sued for deaths and defects and illnesses. Easing back on EPA authority and standards.

Telecommunications Deregulation which will ultimately lead to oligopolipic price hikes after all the promises of lower costs to the public.

Energy deregulation which holds no value higher than corporate profits. No national parks or lands owned by the people will be exempt.

Deregulating the barrier between church and state opens the door to services without the kind of oversight and standards for services rendered that for other non-profit organizations are subject to.

And after the Administration’s and Republican Congress’s smokestack deregulation which releases methyl mercury into the air, we, just this week are getting warnings from the FDA that pregnant women, young children and females who may become pregnant should avoid tuna, especially, white tuna. Hey, what’s a few thousand birth defects and damaged intellects when campaign contributions from the smokestack industries are at stake? They would probably have grown up blaming the politicians anyway.

Posted by: David R. Remer at December 14, 2003 11:10 PM
Comment #4435
Natural Gas Prices Surge and Fingers are Pointing. The prices have increased nearly 50 percent since Thanksgiving despite an apparent lack of events that normally create such spikes. By Simon Romero.

A never ending story under this Administration.

Posted by: David R. Remer at December 15, 2003 12:16 AM