Category Archives: Politics – General

The politics of destruction

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Ken-Lay-R_jpg_250x1000_q85.jpgIn this International Herald Tribune article, Michael Oxley — the “Oxley” of the Sarbanes-Oxley corporate governance statute — confirms the vacuous nature of the politicians who passed that destructive law and encouraged the destruction of Arthur Andersen and various Enron executives:

Presiding over a recent dinner in Paris for more than 200 accountants, Oxley — the former Republican congressman from Ohio and co-author of the Sarbanes-Oxley corporate governance law — was asked during the question period whether he realized he had helped create one of the most crushing financial burdens ever imposed on business.
Was Oxley aware, his questioners asked, that the law that he and Senator Paul Sarbanes, a Maryland Democrat, rushed onto the books five years ago after the collapse of Enron and WorldCom had contributed to a sharp decline in listings on U.S. stock exchanges? And, knowing what he knows now about the cost and effects of the law, would Oxley — who retired in January after 25 years in Congress — have done it any differently?
“Absolutely,” Oxley answered. “Frankly, I would have written it differently, and he would have written it differently,” he added, referring to Sarbanes. “But it was not normal times.” [. . .]
“Everybody felt like Rome was burning,” Oxley, 62, recalled during an interview after the dinner in Paris. “People felt like they were getting cheated. It was unlike anything I had ever seen in Congress in 25 years in terms of the heat from the body politic. And all the members were feeling it.”
Until that moment, a bill to tighten corporate controls had been languishing in the Congress for years, held back by lobbying by big business. But suddenly, the impetus was there, and the firestorm led Oxley, then head of the House committee that oversees America’s financial services industry, to quickly push forward a solution based on that measure to calm the hysteria of voters.[ . . .]
in the summer of 2002, with pressure also mounting from the administration of President George W. Bush, there was no question that the bill needed to be pushed through, however imperfect.
“The president called Paul and I down to the White House almost immediately after the Senate passed its bill, 97 to 0” on July 15, Oxley recalled.
“I remember it was in the Cabinet Room and you could see the pressure he was under because the Democrats were pressing his relationship with ‘Kenny boy'” — a reference to Kenneth Lay, the chief executive of Enron, who had sought help from the administration to avoid a bankruptcy filing in the weeks before the giant energy trading company collapsed.
“The president basically said, ‘Get this wrapped up,'” Oxley said. The House and Senate quickly agreed on a new draft, and Bush signed the bill into law on July 30. [. . .]
A month later, Arthur Andersen, the accounting firm that had been convicted of obstructing the government’s investigation into the collapse of Enron, declared bankruptcy after 89 years in business, crushed by Enron-related liabilities.
The Andersen prosecution was “a White House decision,” Oxley said. “They had to really look tough and so they decided at the highest levels they were just going to give the death penalty to Arthur Andersen.”
“I think at the end of the day virtually anyone would agree it was a terrible decision, because you eliminated a major accounting firm,” he added, “and you just sent a chill through the accounting industry.”

Read the entire article. Yet another example of the legislative overreaction to a perceived problem being far worse than the problem itself.

Al Gore’s big utility bill

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al_gore.jpgDrudge and parts of the political blogosphere made a big deal out of Al Gore’s supposed hypocrisy in personally consuming more than average amounts of energy while advocating conservation of energy to reduce global warming. But my sense is that James H. Joyner, Jr. has the right perspective on Gore’s energy usage:

Regardless of what Al Gore preaches about these matters, the way he lives strikes me as reasonable. He was of the manor born, to be sure, but he has earned a lot of money on his own. He has every right to a ginormous house, a fleet of cars, and to be flown around the world in private planes to speak out against the dangers of global warming. While itís funny in microcosm, it strikes me as a perfectly defensible trade-off to use a thousand times more energy than the average guy in an effort to influence macro-level energy and environmental policy.
Where Gore and I differ is that my aim is for more people to get to live like Gore. While environmental degradation in general and global warming in particular are real problems, certainly a serious case can be made that they pale in comparison with the ravages of poverty. Further, if millions of people not starving to death isnít its own reward, UC-Berkeley professor emeritus of energy and resources Jack Hollander explains in The Real Environmental Crisis: Why Poverty, Not Affluence, Is the Environmentís Number One Enemy, that, contrary to conventional wisdom, as societies become more affluent, they produce less pollution. Thatís not particularly surprising, when you think about it, as those whose basic human needs are met have both the inclination and resources to worry about cleaning up their environment.

Read the entire piece.

Barack Obama’s questionable economics

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Thomas%20Sowell%20022607.jpegThe exceedingly clear thinking Thomas Sowell (earlier posts here and here) is reviewing Democratic Party Presidential candidate Barack Obama’s positions on economic policy and doesn’t much like what he sees:

Senator Barack Obama recently said, “let’s allow our unions and their organizers to lift up this country’s middle class again.”
Ironically, he said it at a time when Detroit automakers have been laying off unionized workers by the tens of thousands, while Toyota has been hiring tens of thousands of non-union American automobile workers. [. . .]
Senator Obama is being hailed as the newest and freshest face on the American political scene. But he is advocating some of the oldest fallacies, just as if it was the 1960s again, or as if he has learned nothing and forgotten nothing since then. [. . .]
Senator Obama is not unique among politicians who want to control prices, as if that is controlling the underlying reality behind the prices. [. . .]
The underlying reality that politicians do not want to face is that here, too, prices convey a reality that is not subject to political control. . .

One of the hardest things for politicians to resist is indulging most voters’ tendency to believe economic fallacies. Unfortunately, most politicos do the easy thing and give the voters what they want to hear. That is probably a good approach to getting elected, but it’s a lousy one for governing.

More on the outrage that is the Harris County Jail

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Harris_County_Jail_Large.jpgEven as things change in Harris County government, the chronic problems of the Harris County Jail remain the same.

A Houston Chronicle review of state and county records reveals that from January 2001 through December 2006, at least 101 inmates ó an average of about 17 a year ó have died while in the custody of the Harris County Jail. In 2006 alone, after three consecutive years of failing to be in compliance with state standards, the jail recorded 22 in-custody deaths.
At the time of their deaths, at least 72 of the inmates ó more than 70 percent ó were awaiting court hearings and had yet to be convicted of the crimes that led to their incarceration.
Records and interviews show that almost one-third of the deaths involve questions of inadequate responses from guards and staff, failure by jail officials to provide inmates with essential medical and psychiatric care and medications, unsanitary conditions, and two allegations of physical abuse by guards.
In at least 13 cases, relatives or documents raise questions over whether inmates received needed medications prior to their deaths. Additionally, 11 of the deaths involve infections and illnesses suggesting sanitation problems. In 10 other cases, death reports suggest possible neglect, . . . [ . . .]
Prisoners also claim they have been forced to sleep on mattresses on cellblock floors ó sometimes next to toilets. They maintain that the crowded living conditions at the jail are ripe for disease and bacteria, particularly methicillin-resistant Staphylococcus aureus, or staph, a potentially lethal blood infection.
As a result, numerous inmates contend they have contracted staph infections while incarcerated. Jail records show that between January 2001 and April 2005, there were 60 medical quarantines at the jail. The records show at least two of the quarantines were related to staph infections. The causes of 11 other quarantines are not listed.

Apparently with the exception of the Harris County Commissioners, most everyone agrees that something needs to be done about the Harris County Jail. Yet, as has been the case for the almost 30 years now that I’ve been practicing law in Houston, while most everyone agrees, nothing ever gets done.
Government generally — and Harris County government in particular — is responsive to those constituencies that wield political power. Prisoners have no political power and are generally unpopular with those who do. Inasmuch as most voters never set foot in a jail and have no first-hand experience of the abysmal conditions, it is easy to understand why nothing is ever done about this outrage, at least from a political standpoint.
But that doesn’t make the condition of the Harris County Jail any easier to stomach. At a time when Governor Perry is bowing to the powerful political forces that want to build even more prisons, it’s high time that voters realize the scam that state and local politicians have foisted on them in bowing to the powerful political forces that support the endless cycle of building more and more prisons. The problem with the Harris County Jail is largely the result of too many non-violent or petty criminals being locked up there for too long. Until the politicians do the hard work necessary to reform the barbaric policies that have caused that condition, the jail problem is unlikely to change. Kudos to the Chronicle for keeping this problem on the frontburner. Charles Kuffner and Burnt Orange Report have more.

The struggle of recovery made worse

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new_orleans.gifAlthough the Bush Administration’s troubles in devising and implementing a workable strategy for bringing civil order to Baghdad receives most of the mainstream’s media attention, the failure of government to facilitate order in New Orleans and rebuilding throughout the Hurricane Katrina-ravaged Gulf Coast region is a more appalling failure (earlier post here).
It’s not as if my expectations for government in the New Orleans region are all that high — I’d be satisfied with ensuring law and order, making sure that basic services are provided and creating an environment where entreprenuers will take the risk of starting businesses that will create badly-needed jobs for the residents of the area. In this NY Times article, Adam Nossiter continues his series of excellent series of articles over the past year regarding the failure of the local and state governments in New Orleans to ensure law and order and the devastating effect that failure is having on the region.
Meanwhile, in another not as well-reported failure of government, this NY Times article reports on the Oreck Corporation’s decision to move its maufacturing facility and 500 jobs from the Gulf Coast region of Mississippi to Tennessee, in large part because of the company’s difficulties in arranging insurance for its operations in Mississippi. As Ted Frank observes, the lack of insurance coverage is the direct result of Mississippi courts expansion of the coverage of insurance contracts beyond their plain terms and the state legislature’s response to those court decisions, which “has [made] things worse: criticize the businesses who have left, and seek to further regulate the price of insurance, despite thousands of years of evidence that limiting the price will reduce the amount supplied and lead to shortages.”
But at least the region has (for this season anyway) a good professional football team, which continues to exist in New Orleans only because local and state governments in Louisiana found the time and resources to arrange several hundred million in emergency funding for the team and its facilities. And even that subsidy might not work in the long run. As usual, the government has its priorities in order.
By the way, while on the subject of interesting Ted Frank blog posts, don’t miss this one.

Government Finance 101

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myths.gifIn this post from almost three years ago, I noted the utter hypocrisy of Congress regularly vilifying big business for attempting creative financing mechanisms to hedge risk. So, over the holidays, this letter to Washington Post from the Comptroller General of the United States caught my eye:

The largest employer in the world announced on Dec. 15 that it lost about $450 billion in fiscal 2006. Its auditor found that its financial statements were unreliable and that its controls were inadequate for the 10th straight year. On top of that, the entity’s total liabilities and unfunded commitments rose to about $50 trillion, up from $20 trillion in just six years.
If this announcement related to a private company, the news would have been on the front page of major newspapers. Unfortunately, such was not the case — even though the entity is the U.S. government.
To put the figures in perspective, $50 trillion is $440,000 per American household and is more than nine times as much as the median household income.
The only way elected officials will be able to make the tough choices necessary to put our nation on a more prudent and sustainable long-term fiscal path is if opinion leaders state the facts and speak the truth to the American people.
The Government Accountability Office is working with the Concord Coalition, the Brookings Institution, the Heritage Foundation and others to help educate the public about the facts in a professional, nonpartisan way. We hope the media and other opinion leaders do their part to save the future for our children and grandchildren.
DAVID M. WALKER
Comptroller General of the United States
Government Accountability Office
Washington

The Brownback judicial litmus test fails

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brownback.jpgThis previous post reported on the political posturing of Republican Senator Sam Brownback of Kansas, who was blocking a long-delayed judicial nomination by President Bush because the nominee had attended a commitment ceremony between a couple of gay friends. Well, Senator Brownback has finally backed off, but he still sounds demagogic even when he tries to do the right thing:

Senator Sam Brownback of Kansas, who blocked the confirmation of a woman to the federal bench because she attended a same-sex commitment ceremony for the daughter of her long-time neighbors, says he will now allow a vote on the nomination.
Mr. Brownback, a possible contender for the Republican presidential nomination in 2008, said in a recent interview that when the Senate returned in January, he would allow a vote on Janet Neff, a 61-year-old Michigan state judge, who was nominated to a Federal District Court seat.
Mr. Brownback, who has been criticized for blocking the nomination, said he would also no longer press a proposed solution he offered on Dec. 8 that garnered even more criticism: that he would remove his block if Judge Neff agreed to recuse herself from all cases involving same-sex unions.
In an interview last week, Mr. Brownback said that he still believed Judge Neffís behavior raised serious questions about her impartiality and that he was likely to vote against her. But he said he did not realize his proposal ó asking a nominee to agree in advance to remove herself from deciding a whole category of cases ó was so unusual as to be possibly unprecedented. Legal scholars said it raised constitutional questions of separation of powers for a senator to demand that a judge commit to behavior on the bench in exchange for a vote.

Senator Brownback “did not realize” that his proposal violated the separation of powers upon which the federal government is based?

Is Tony Blair’s Princess Di premonition coming true?

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Tony Blair-big.jpgDuring a scene of Stephen Frears’ clever film, The Queen, British Prime Minister Tony Blair’s staff is relishing the public disdain for the Royal Family’s restrained response to Princess Diana’s death because it makes Blair — who made a passionate public response — look good in comparison. Blair — played brilliantly by Michael Sheen — grows frustrated with his staff’s gloating because he knows that the same public venom that is being directed toward the Royal Family could just as easily be directed toward him.
Based on this Daily Telegraph article, Blair may be receiving precisely what he feared:

We have become like any other nation. No more can we tell ourselves that British corruption scandals are qualitatively different from those of hot countries, or that the peccadilloes that shake our polity would barely make the newspapers in Italy. In 1994, in his first major speech as Labour leader, Tony Blair promised that, under his leadership, Britain would never again be out of step with Europe. Now, in a grisly kind of way, his ambition has been fulfilled.
With so many sleaze stories in our news pages, it is easy to become confused. A prominent Labour donor has been profiting from the recommendations of his own task-force. Gordon Brown’s supporters accuse Mr Blair of seeking to drag their man into the mire with him. Meanwhile, the Government has ordered an abrupt halt to the inquiry into allegations of hidden arms commissions, just as others begin to suspect corruption.
The sheer blizzard of allegations can leave us snow-blind. Perhaps, we tell ourselves, this is what all governments do. Perhaps Labour is no different from its predecessors. After all, wasn’t John Major brought down after a series of sexual and financial scandals?
Yes, he was. But what is happening now is of a different order. The central accusation against this ministry ñ that it has sold favours, possibly even places in the legislature, to secret donors ñ is one that has not been seriously levelled at a British government since the introduction of the universal franchise. [. . .]
Tony Blair’s belief in the superiority of his motives leads him to reason that, when the New Labour project is at stake, the ends justify the means.
We saw this within weeks of his accession when he sought to explain the Ecclestone affair ñ the first of many cash-for-favours scandals ñ on the basis that he was a pretty straight kinda guy. That, essentially, remains his attitude: he regards complaints about probity as petty next to what he is doing for Britain.
A decade later, parliament is cheapened, and the police have been called into Downing Street. That, more than the transformation of his party, more than Scottish devolution, more even than Iraq, will be his legacy.

Not another dime

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jail15.jpgCharles Kuffner, one of Houston’s best political bloggers, notes a small sign of progress (also here) in the seemingly relentless and misguided campaign of local governments to build expensive and unnecessary fiefdoms in the guise of large jails:

State Sen. John Whitmire, D-Houston, said there is no need for [Harris County] to spend at least $267 million building two jails when it could cut the inmate population at the county jail by allowing non-dangerous offenders out on bail before trial.
“I am very suspect whether there is a need for jail space,” said Whitmire, who chairs the Senate Criminal Justice Committee. “Harris County wouldn’t have an overcrowding problem at all if it had an effective pretrial release program.”
Whitmire said the Legislature, in the upcoming session, may look at ways to help reduce jail overcrowding, such as shorter sentences for some crimes.
Commissioners Court likely will ask voters next November to approve bonds for new jails that would add 4,600 beds.
County Judge Robert Eckels and other members of Commissioners Court said the jails are needed to reduce overcrowding now and in the coming decades.

As noted earlier here, the condition of the Harris County Jail has long been a civic embarrassment, but the solution is not simply to build more jails. As noted earlier here, Scott Henson has written this thorough and insightful analysis of the true problem with the Harris County Jails, which is overcrowding from sloppy and lazy processing of prisoners who do not need to be incarcerated pending their trial.
There are some powerful political forces — county commissioners, contractors, police unions, etc. — that benefit from and support this unending spiral of jail construction, while the constituencies supporting prisoners are not as powerful or well-funded. However, it is clear that the solution is not simply to build bigger and more expensive jails. Rather, building additional facilities should not even be a consideration unless or until Harris County adopts a sensible pre-trial release policy that frees up literally thousands of existing jail cells that are being wasted on folks who should not be in jail. Moreover, the county should also be required to fix the chronically deplorable condition of its existing jails before seeking to build more. This is a community issue — and in other communities as well — that should transcend party politics. But I doubt that it will.

Why don’t you tell us what you really think?

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baker120306.jpgThe NRO Corner‘s John Podhoretz in this NY Daily News op-ed makes clear that he is not buying into that whole “elder statesman” thing that the NY Times reported last week regarding James Baker, III’s co-chairmanship of the Iraq Study Group:

As Dana Milbank reports in The Washington Post, on Monday the [Iraq Study Group’s] “co-chairmen, James Baker and Lee Hamilton, found time . . . to pose for an Annie Leibovitz photo shoot for Men’s Vogue.”[. . .]
Baker, Hamilton and their crew of old Washington hands (and I mean old, like Metheuselah-level old) are recommending a “gradual pullback” of American troops but without a timetable. That basically translates into a nice, long, slow defeat – the “graceful exit” of which the president spoke so harshly.[. . .]
This is the consensus view of the Iraq Study Group, which is very proud that it reached consensus.

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