Bush tacitly admits the remedy for the self-dealing, the accounting frauds, and the other conflicts of interest that are now placing the entire economy in jeopardy is government regulation -- something the Republicans have vilified since Ronald Reagan.
The entire system of self-regulation has collapsed. Free markets, it turns out, don't prevent brokers from peddling junk to unsuspecting investors while they enrich themselves or auditors from conspiring with executives to cook company books.
Market discipline doesn't stop insiders from selling shares they are promoting to the public even as the company is rotting from within or senior company officials from looting the pensions of workers or CEOs from scheming to pump up stock so they can cash in options. Only regulation can change these perverse incentives.
Moreover, the career of George Bush himself epitomizes the kind of self-dealing and insider enrichment that men like Ken Lay and Bernie Ebbers raised to new heights. Bush can tactically shift his current policies, but he can't erase his own record. Just as one corporation after another now faces close scrutiny of past dealings, so does Bush.
In the Harken affair, Bush served on the board of a company that falsely inflated its earnings -- a smaller-scale version of Enron or WorldCom. Only eight days before the Harken Energy Corp. was forced to disclose large losses, Bush, who was given the stock on very favorable terms for serving on the board and for "consulting," sold his stock for $848,560. Once the losses were made public, the stock plunged. It's highly improbable that Bush, an insider, was ignorant of the company's real finances when he dumped the stock.
Bush failed to file timely documents disclosing this insider trade.
When the SEC (in the regime of the elder George Bush) investigated and excused Bush of wrongdoing, the SEC's general counsel was one James Doty, who had been George W. Bush's lawyer when young Bush, fronting for a group of businessmen, bought the Texas Rangers baseball club. Imagine the Republican indignation if the Whitewater investigation had uncovered anything like this kind of misconduct on the part of Bill Clinton.
So Bush is credible neither personally nor in terms of the remedies he proposes. His proposal of prison time for corrupt executives is a phony.
The SEC already has the power to prosecute criminal fraud. All it takes is someone tougher than former lobbyist Harvey Pitt in charge. The real need is a total restructuring of corporate governance and tight regulatory prevention of conflicts of interest at all levels. It's the barrel that's rotten.
<The SEC already has the power to prosecute criminal fraud. The real need is a total restructuring of corporate governance and tight regulatory prevention of conflicts of interest at all levels. It's the barrel that's rotten. > D
Disagree mojo that it is the barrel that is rotten. First off, incredibly we have yet to get a full investigation and explanation of what caused all this. There are bits and pieces known, but that's it. I have been reading on Robert Rubin - Clinton's guy. Seems he and Alan Greenspan were staunch advocates AGAINST regulation of derivatives and so advised Congress over 10 years ago. He is the only one to my knowledge that left Citibanks BOD over all this.
We really need a full audit of the Fed Reserve. You know they are a private corporation. Why did Greenspan not want derivatives regulated? Why were they keeping interest rates so low? There is a lot more to this story than the people are being told.
Want to talk about BOD and CEOs? Who are they? Looks like a tight inner circle of buddies. They are the ones giving out the exhorbitant salaries. We do not need the gov to step in and regulate them, they own the gov already obviously. Control of the corporations needs to be returned to the stockholders.