Sunday, July 07, 2002
On Friday morning I felt a little relieved that The New York Times' Paul Krugman column didn't appear on Friday, so I wouldn't feel the need to critique it before I left for my weekend in San Luis Obispo. (The wedding was beautiful by the way.) So, when I returned home on Sunday afternoon I was amazed and dismayed to see another Krugman hit piece online. This one in the wider-circulating Sunday edition.
Unfortunately, the administration has so far gotten the press to focus on the least important question about Mr. Bush's business dealings: his failure to obey the law by promptly reporting his insider stock sales. It's true that Mr. Bush's story about that failure has suddenly changed, from "the dog ate my homework" to "my lawyer ate my homework — four times." But the administration hopes that a narrow focus on the reporting lapses will divert attention from the larger point: Mr. Bush profited personally from aggressive accounting identical to the recent scams that have shocked the nation.
Why would the administration focus on the "least important question" as Krugman calls it? Maybe because Krugman's piece, which spurred the entire "controversy," claimed that Bush's failure to report the sale was illegal and it was only his connections (his father was president at the time) staved off federal prosecution.
I don't live in Texas, but in the days that followed Krugman's "scoop" readers found out that Krugman's piece was old news. Democratic Gov. Ann Richards used this "scandal" against Bush in the 1994 Texas gubernatorial race -- to no avail.
Krugman makes a big deal about Bush's failure to file promptly the documents with the SEC saying that he had sold the stock. Krugman sees something sinister in this, and suggests that everyone who fails to file every set of forms is worthy of prosecution.
Full disclosure: I received a letter last week from the IRS saying that I had failed to sign my 2001 tax return. The letter contained a form for me to sign and mail back in to the IRS. Would Krugman suggest the IRS throw the book at me? Am I worth it?
Prosecutors refuse to file charges all the time. It's just not worth it sometimes.
Oh, and Harken's fake profits were several dozen times as large as the Whitewater land deal — though only about one-seventh the cost of the Whitewater investigation.
Mr. Bush was on the company's audit committee, as well as on a special restructuring committee; back in 1994, another member of both committees, E. Stuart Watson, assured reporters that he and Mr. Bush were constantly made aware of the company's finances. If Mr. Bush didn't know about the Aloha maneuver, he was a very negligent director.
Well, there's lots of negligent directors out there. Enron, Worldcom, Xerox -- they're much bigger players than Bush ever was. If you haven't read it yet, pick up this month's edition of Fortune magazine. There are numerous articles in there that discuss how to fix what's wrong with corporate America -- without taking potshots at people on either side. It's an example that Krugman would do well to follow.
I also like how Krugman juxtaposes Whitewater vs. Harken Energy. However, Krugman plays on the American public's short memory when he does this. Intimately tied in with the infamous land deal was the fact that James McDougal had used the Madison Guaranty Savings and Loan to prop up the Whitewater venture. When Madison Guaranty collapsed amidst the S&L scandal, taxpayers forked out between $50-$60 million.
The point is the contrast between image and reality. Mr. Bush portrays himself as a regular guy, someone ordinary Americans can identify with. But his personal fortune was built on privilege and insider dealings — and after his Harken sale, on large-scale corporate welfare. Some people have it easy.
Every politician paints themselves as regular guys (or gals) -- and it's false for every one of them. Clinton was no different. Gore was no different. McCain was no different. They're all dirty.
Krugman would be a much more effective voice for accounting reform and honesty in corporate America if he could only see that both parties are beholden to Wall Street and special interests. There is no Jefferson Smith in Washington, D.C.