Jewish World Review Oct. 7, 2002 / 1 Mar-Cheshvan, 5763
http://www.NewsAndOpinion.com | The stock market keeps falling. It wasn't supposed to be that way: Congress supposedly fixed the economy when it made corporate executives certify under oath their companies' financial statements. Naturally, legislators took full political advantage of the corporate scandals.
"Put a few of these crooked CEOs in jail, prosecute them and pursue them endlessly," demanded Rep. Peter DeFazio, D-Ore.
Yet the market's reaction suggests that businessmen are not the only people who need to be held accountable. For instance, there's also a union crime wave.
Department of Labor records, reports Peter Cleary of the American Conservative Union, "show that various labor union officials have been indicted for corruption, fraud and financial misdeeds at a rate of 12 new indictments and 11 convictions every month for the past four years." Many of those involve the misuse of members' pension funds.
Even worse is Washington's behavior. Its numbers are notoriously inaccurate.
In February, the Office of Management and Budget said this year's deficit would run $106 billion. Five months later, OMB revised its estimate to $165 billion.
Last year OMB predicted the coming decade would see a surplus of about $5 trillion. Now, it says, the surplus will run less than a trillion dollars.
The federal government claims to owe $3.5 trillion -- $6 trillion if you include intragovernmental debt. The number is actually $36 trillion.
Social Security suffers a $13 trillion unfunded liability, benefits which have been promised but not funded. Medicare's unfunded liability is $17 trillion.
An Office of Management and Budget assessment gave 22 out of 26 agencies the lowest possible accounting mark. Last year, the General Accounting Office found $17.3 billion in "unreconciled transactions," that is, cash that had simply disappeared.
Congress routinely juggles the books. For instance, to avoid having to comply with statutory budget caps, legislators have long declared certain expenditures "off-budget." CNN's Jonathan Karl points to last year's $15.3 billion bailout of the railway workers' retirement fund.
Also, last year, Congress bumped the military's first paycheck of the year, previously disbursed, back into fiscal year 2000 in order to free more money to spend under the fiscal year 2001 spending caps. Legislative leaders were narrowly blocked from similarly shifting Supplemental Security Income and veterans' compensation payments due the previous October (fiscal year 2001) to September (fiscal year 2000) -- after having moved the outlays in the other direction a year before.
Last year, Congress put the census budget in an "emergency" spending bill so these routine outlays would not count against the spending caps. Legislators collected $33 billion in 2001 by extending by two weeks the final fiscal year 2000 deadline for making corporate quarterly tax payments. That shifted the cash into the then current fiscal year, allowing more spending under the budget caps.
But don't expect Congress to discipline even the worst officials. With the election approaching, reports the Washington Post: "In contrast to their campaign to crackdown on crooked businessmen, lawmakers are increasingly choosing to overlook alleged transgressions by their own colleagues."
At the same time, Congress continues to enrich the very companies that it has been denouncing for destroying the economy.
Last year, legislators slopped $90 billion into the federal trough for the largest, most profitable enterprises in America.
There's the scandalous farm bill, providing agribusiness with $190 billion over the next decade. And billions more just voted in special drought assistance. There are advertising subsidies through the Market Access Program for the likes of Gallo Wine and McDonald's, and regulatory and tax preferences to underwrite ethanol.
The Commerce Department exists for little more than subsidizing business, from tech companies to exporters. Independent agencies, such as the Export-Import Bank and Overseas Private Investment Corp., devote another $1 billion a year to many of the same companies, including scandal poster-child Enron.
Federal cash flows to major oil and energy companies; in April, the Senate voted to give away as much as $40 billion to natural gas investors by setting a floor for production on Alaska's North Slope. The housing industry benefits from hundreds of grants, loans and guarantees.
Every form of transportation collects federal money. The Small Business Administration ensures that the benefits even flow to corner liquor stores.
Indeed, at the very moment Congress was debating its crackdown on corporate America, an Internet ad promised: "Anyone thinking about going into business for themselves, or wanting to expand an existing business should rush for the world's largest 'one-stop-money-shop' where FREE business grants to start or expand a business is being held for you by the Federal Government."
Free to everyone but taxpayers, that is.
Yes, let's put "crooked CEOs in jail." But let's toss in a few crooked politicians, too. Then maybe the market bulls would return.
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