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Jewish World Review Oct. 7, 2002 / 1 Mar-Cheshvan, 5763

Doug Bandow

Doug Bandow
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Consumer Reports

Accountability for whom? | 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.

JWR contributor Doug Bandow is a senior fellow at the Cato Institute. Comment by clicking here.


09/24/02: Al Gore's selective amnesia
09/09/02: Arm those pilots now
08/27/02: Modern-day gladiators
08/20/02: Don't start the second Gulf War
08/13/02: Declare war before going to war
08/06/02: Hostile allies
07/30/02: Protecting or persecuting citizens?
07/23/02: Shifting the risk to Uncle Sam
07/16/02: Fighting the patent wars
07/09/02: Getting that quota feeling
07/02/02: Teetering on the Democratic edge
06/25/02: Judicial litmus tests
06/18/02: Killer teeth?
06/11/02: Europeans defending whom?
05/24/02: Threatening pharmaceutical innovation
05/14/02: The war crimes fantasy
05/07/02: Paying a high price for befriending Saudi princes
04/30/02: The price of postal monopoly
04/23/02: The war on charity
04/16/02: The forgotten human right
03/27/02: Cuba's struggle to be free
03/20/02: How to defeat Cuban communism
03/12/02: Junk science, redux
03/06/02: Axis of hubris
02/27/02: Washington-style campaign reform: incumbent protection
02/20/02: The grand Enron morality play
02/12/02: Rebuilding what?
02/05/02: Succumbing to the terrorist temptation
01/29/02: Democrats for what?
01/22/02: The Iraqi question
01/14/02: Profiling frequent flyers
01/08/02: Trade, not aid
01/02/02: Treason by any other name
12/26/01: Preserving freedom in an unfree world
12/17/01: Dealing with terrorism's aftermath
12/10/01: Emerging friendships?
12/04/01: Uncle Sam: Insurer of last resort
11/28/01: Expanding the circle of trade
11/20/01: Free to be stupid
11/13/01: The meaning of compassion
11/07/01: Patriotic scoundrels
10/30/01: The coming postal raid
10/16/01: First, do no harm
10/12/01: Good news from a suffering land
10/04/01: Defending whom?
09/25/01: The wrong solution to the wrong problem
09/21/01: The price of terrorism
08/28/01: Uncle Sam's retirement scam
08/21/01: Canberra's quaint naivete
08/14/01: Uncle Sam's false fuel economy
08/08/01: The Clinton administration in drag
07/31/01: The high cost of government
07/24/01: Kill the campaign reform illusion
07/17/01: Do as I say, not as I do
07/11/01: Lawyers at play
07/05/01: Western blundering, Macedonian disaster
06/26/01: How best to honor Bill Clinton?
06/19/01: A maturing Europe?
06/15/01: Tell Beijing to mind its own business
06/06/01: Ukraine's boiling cauldron
05/31/01: Protecting privacy from Uncle Sam
05/22/01: America's Balkan quagmire
05/09/01: The Taiwanese flash point
05/01/01: Globalization serves the world's poor
04/24/01: Who's cheating whom?
04/10/01: The NCAA scam
04/03/01: Balkan stupidities
03/27/01: McCain doesn't want a 'risk for our country'
03/20/01: Dubious Korean alliances
03/06/01: Coercive patriotism
02/27/01: Bombing without end
02/20/01: A dose of misplaced outrage
02/13/01: Psst: Tax cuts for taxpayers. Pass-it-on
02/06/01: Bridging the unbridgeable gap
01/23/01: Left-wing demagoguery
01/16/01: The drug war problem
01/10/01: Politics and trade
01/03/01: Hope for liberty?
12/27/00: The debris of war
12/19/00: What's the rule of law for?
12/15/00: Ending silicone breast implant saga
12/05/00: Election may yield victor, but there are no winners
11/21/00: A Bush presidential mandate?
11/07/00: Exprienced Gore? Yeah, right
11/01/00: Interventionist follies
10/17/00: America's brightening prospects in Ukraine
10/11/00: GOP budget scandals
10/03/00: How a pharmaceutical 'crisis' was created
09/27/00: Clinton's empathy has helped nobody
09/13/00: AlGore's risky budget policies
09/05/00: Military readiness and Korean commitments
08/29/00: Let sleeping hypocrites lie
08/21/00: Targeting a journalistic pariah
08/15/00: European garrison for Kosovo?
08/08/00: Journalistic cleansing at the Boston Globe
08/04/00: Junk science on trial
06/22/00: Eternal vigilance is the price of liberty
06/15/00: The end of U.N. peacekeeping
06/07/00: The Clinton regulatory miasma
06/01/00: Administration stupidity, congressional cowardice
05/25/00: The silence of the international community
05/18/00: Protecting the next generation

05/11/00: Freer trade with China will advance human rights

05/04/00: How not to save the Constitution

04/28/00: American tripwire in Korea long ago disappeared: Why are we still involved?

04/18/00: Clinton administration believes the IRS is too gentle, wants more auditors

© 2002, Copley News Service