AUSTIN, Texas -- Enron, the biggest financial failure in U.S.
history, is bigger than Enron. It's also bigger than Global Crossing and all
the earn ings restatements headed our way, too.
"Systemic," "structural" and "epidemic" are the key words here.
Take, for example, the gladsome tidings that Enron paid no taxes whatever
during four of the past five years by cleverly transferring its assets to
881 subsidiaries in tax-shelter countries. (Also take the item that Enron
would have gotten a $254 million tax rebate under the Republican "economic
stimulus" package -- please. The bill is now mercifully defunct.)
Enron's tax practices are so common that the Center for Public
Integrity estimates they cost the country $195 billion a year, which means
the rest of us have to make up that missing tax money. That comes to $1,600
per taxpayer. See? Your very own stake in the Enron fiasco.
Arthur Levitt, former chairman of the Securities and Exchange
Commission and now a hero because he saw this coming -- nobody paid
attention to him the '90s, of course -- testified, "What has failed is
nothing less than the system for overseeing our capital markets."
Unfortunately, the new SEC chair, Harvey Pitt, is a Bushie who thinks the
way to cure the accounting scandals is to have tighter voluntary regulations
for accounting firms. Bush tried that voluntary regulation when he was
governor. Did it work? Not hardly, as they say in West Texas.
So now everyone is hot for ree-form, or at least pretending to
be (Rep. Bill Tauzin of Louisiana is especially amusing in the role.) They
want to reform accounting, reform the campaign financing system, reform
stock analysts. Take my word on this, George W. Bush will support a few
cosmetic reforms, probably of 401K plans, and then run next time as a
reformer. That's how he became "the father" of the Texas patients bill of
rights.
Our more ambitious reformers would like to do something about
the tax structure, maybe even rethink the role of corporations in America.
But they're not thinking big enough, either. One of major political parties
is congenitally opposed to government regulation of any kind, and other one
is almost as bad, simply because of the way campaigns are financed in this
country. Our free-market fundamentalists insist that all this
self-correcting; in fact, according to the secretary of the treasury, Enron
is proof positive that the whole is system is working beautifully.
Former State Sen. Jack Gordon of Florida, one of the wisest
people who ever served in state government, used to listen patiently to
anti-regulatory diatribes and then gently suggest: "Well, if all regulation
is bad, let's start with traffic. Let's take down all the stoplights and
stop signs, and abolish the speed limit, and see what happens." A couple of
crashes will make everyone more careful and then it will work fine, right?
Those who favor the free-market solution to everything keep
warning if we put on too many regulations we will kill the goose that is
laying the golden egg. The problem is, this goose is not laying a golden
egg -- it's laying an incredibly dangerous bomb. In the current issue of the
magazine Tikkun, Jeff Gates, former counsel to the U.S. Senate Finance
Committee, rehearses the dreary results both nationally and internationally.
-- The financial wealth of the top 1 percent of U.S. households
now exceeds the combined household financial wealth of the bottom 95
percent.
-- The wealth of the Forbes 400 richest Americans grew an
average $1.44 billion each from 1997-2000, for an average daily increase of
wealth of $1,920,000 per person. That's 6,602 times the U.S. minimum wage.
-- The top fifth of U.S. households have 49.2 percent of the
national income, while the bottom fifth gets by on 3.6 percent.
The numbers on this immense concentration of wealth get worse
every year -- the system keeps redistributing money from the poor to the
rich. The predictable result, says Gates, is excess physical capacity
alongside unmet physical needs. We are now in an overcapacity recession,
historically the most difficult to undo.
Nor does the phenomenon stop at our shores: Globalization is
doing exactly the same thing internationally. Eighty countries have per
capita income lower than a decade ago. In 1960, the income gap between the
fifth of the world's people living in the richest countries and the fifth
living in the poorest countries was 30 to one. By 1990, the gap had widened
to 60 to 1. By 1998, it was 74 to 1.
There is much more of this in the article, but unlike the WTO
protesters, Gates is not in favor of killing the transnational corporation
goose. His critique is as harsh as anything we hear from the
anti-globalization, but his solutions are based on free enterprise
democracy. Well worth the trouble it might take you to find Tikkun.
To find out more about Molly Ivins and read features by other
Creators Syndicate writers and cartoonists, visit the Creators Syndicate web
page at
www.creators.com.
COPYRIGHT 2002 CREATORS SYNDICATE, INC.
