Speech of the Prez on corporate ethics.
July 9, 2002 10:55 AM   Subscribe

Speech of the Prez on corporate ethics. Does it go far enough? Stock market is "uninspired".
posted by beagle (44 comments total)
 
they'd make more impact if they actually indicted some of the enron gang, but I haven't seen 'em arrest anyone yet.
posted by zoopraxiscope at 11:16 AM on July 9, 2002


He wants to double jail time.

Um, two times zero is zero.
posted by mathis23 at 11:20 AM on July 9, 2002


Bush writes off his past illegal trades as "old politics," dragged up by democrats. Well I'm a democrat. If you're going to call it mud-slinging, I'd have to say that Bush more or less filled a bucket with mud, held it above his head, and then pulled some out to throw at Worldcom so that Enron wasn't in the spotlight...

In my eyes, he's got a lot of mud balanced precariously above his noggen in one hand.
posted by zekinskia at 11:20 AM on July 9, 2002


May I add, I think the definition of Chutzpah should be changed in the dictionary...
posted by zekinskia at 11:28 AM on July 9, 2002


The American economy today is rising, while faith in the fundamental integrity of American business leaders is being undermined.
Has anyone ever had faith in the integrity of business leaders?
posted by aladfar at 11:36 AM on July 9, 2002


Nice speech. I'm sure it'll give him and his CEO buddies plenty to laugh about as they go to happy hour later this evening.
posted by Ufez Jones at 11:37 AM on July 9, 2002


Bush: "We've learned of some business leaders obstructing justice and misleading clients, falsifying records, business executives breaching the trust and abusing power. We've learned of CEOs earning tens of millions of dollars in bonuses just before their companies go bankrupt, leaving employees and retirees and investors to suffer."

---

"On June 20, 1990, Bush, a director of Harken Energy, sold the bulk of his Harken stock for $848,000. A week later, the stock plummeted in value on news of a large quarterly loss. Bush claimed that he had submitted a required report about the stock sale but it had somehow disappeared."

Update: "On September 7, 2000, Associated Press reported that U.S. Securities and Exchange Commission documents newly released under the Freedom of Information act demonstrated that before he sold the stock, George W. Bush was fully aware that Harken was suffering from a severe cash crisis and was poised to lose millions. Two months before the stock sale, Harken President Mikel Faulkner had told Bush and other directors that “the full capacity of the company is dedicated toward resolving this liquidity crisis.”"
posted by mr_crash_davis at 11:39 AM on July 9, 2002


I'm waiting for Dubya to utter those five fateful words:

"I am not a crook!"
posted by dogmatic at 11:45 AM on July 9, 2002


Actually, Crash, that should be a big story. Past infidelities of the Prez were high-falutin prime-time entertainment news for nearly eight years.

Now where's that damn liberal media bias when you need it?
posted by dogmatic at 11:51 AM on July 9, 2002


The problem here is that Mr. Bush is trying to act tough and concerned to bolster image against what might be public outrage, but the doing away with regulations that were once in place has been on aongoing precedent since Teddy R saw that they were in place to protect the public and keep the wraps on sharp dealers in the business world. The GOP, I suspect, wants Nice Words whereas the Dems want Laws in place. But if we went back to laws that once wre in place we would be well on our way to restoring controls.
posted by Postroad at 12:14 PM on July 9, 2002


woo hoo, the markets do seem inspired though. to sell, sell, sell.
posted by zoopraxiscope at 12:34 PM on July 9, 2002


"The American economy today is rising, while faith in the fundamental integrity of American business leaders is being undermined."

"RISING" !?
posted by muppetboy at 12:37 PM on July 9, 2002


I guess this must be a whole new definition of "rising" of which I was not previously aware.
posted by muppetboy at 12:38 PM on July 9, 2002


Liberal media, liberal media ... where are those liberal media?

Oh, here they are -- in GW Bush's hip pocket!

"I did not have sex with that woman -- Miss Lewinsky." -- A lie worthy of impeachment.

"There was an honest difference of opinion as to how to account for a complicated transaction." -- A lie that apparently will not be investigated by Congress, and will be forgotten by Democrats and the media by Labor Day, when the election season heats up.
posted by Holden at 12:41 PM on July 9, 2002


I guess this must be a whole new definition of "rising" of which I was not previously aware.

Like an accurate one, maybe?

Economy Grows at 6.1 Percent Rate
Thu Jun 27, 5:42 PM ET

By JEANNINE AVERSA, Associated Press Writer

posted by ljromanoff at 12:51 PM on July 9, 2002


sure, there are some economic numbers that do presage a turnaround in the economy. still, given that the environment has a number of stimulative factors--amazingly low interest rates from the fed, increased government spending, a recent tax cut, etc I'm distinctly unimpressed at the tepid rate at which this recovery seems to be progressing......
posted by zoopraxiscope at 12:56 PM on July 9, 2002


Ljromanoff, you mean the economy that grew at 6.1 percent in the quarter after a recession ended, but slowed to 2.5 percent or a little less in the next quarter? Am I correct in assuming that you credit Bush for the 6.1 percent growth in the first quarter? If so, would I be correct in assuming that you would blame Bush for the recession last year?
posted by Holden at 12:58 PM on July 9, 2002


At this moment America's greatest economic need is higher ethical standards...

Right, tell that to the unemployed.
posted by RJ Reynolds at 1:03 PM on July 9, 2002


Am I correct in assuming that you credit Bush for the 6.1 percent growth in the first quarter?

No.
posted by ljromanoff at 1:04 PM on July 9, 2002


Oh yes: and May God bless you all. *Snicker*
posted by RJ Reynolds at 1:05 PM on July 9, 2002


Though I recognize that this is mostly an exercise in damage control by Bush, I thought this was pretty significant:

The SEC should be able to punish corporate leaders who are convicted of abusing their powers by banning them from ever serving again as officers or directors of a publicly held corporation.

My accountability plan also requires CEOs to personally vouch for their firm's annual financial statements. Currently, a CEO signs a nominal certificate and does so merely on behalf of the company. In the future, the signature of the CEO should also be his or her personal certification of the veracity and fairness of the financial disclosures. When you sign a statement, you're pledging your word, and you should stand behind it.

Of course, none of this means anything without actual support for/enforcement by the SEC, which would be a complete 180 degree turn from the current GOP/DLC position.
posted by Ty Webb at 1:16 PM on July 9, 2002


SEC documents related to honest differences of opinion as to how to account for complicated transactions and other such things.
posted by iceberg273 at 1:17 PM on July 9, 2002


Holden: AFAIK 6.1% growth is a sign of a rising economy, which was the point under discussion...

Actually anything more tends to lead to runaway inflation. Markets will be down, however, until the public is convinced that the accounting bloodletting is over.
posted by clevershark at 1:17 PM on July 9, 2002


"Like an accurate one, maybe?"

From the same article:

Economists believe GDP ( news - web sites) has slowed considerably in the current quarter, with some projecting growth at a rate of just 2.5 percent or lower. The slowdown partly reflects less enthusiastic consumers, whose spending accounts for two-thirds of all economic activity in the United States, analysts said.

Against inflation of 1% (which is probably low after printing almost a trillion dollars recently), that's not a lot of "growth". And in any case, the growth rate is slowing (again), while the markets are MASSIVELY overvalued (still). I wouldn't call the current situation one that is "rising" overall. You can find rising and falling indicators in almost any climate. Worrisome would be a better word for the American economy right now.
posted by muppetboy at 1:20 PM on July 9, 2002


A couple of questions (all of you former Arthur Anderson folk feel free to jump in): When these thieving bastards were lying to stockholders and the SEC were they also lying to the IRS? Is there a real difference between CEOs of corporations looting a company and CEOs of savings and loans looting the S&L?
posted by Mack Twain at 1:21 PM on July 9, 2002


$23.2M loss? After the staggering numbers we've seen in the past two years, that seems little but peanuts...
posted by clevershark at 1:22 PM on July 9, 2002


The Marc Rich saga is but a taste of what would happen if the SEC is allowed to ban dishonest corporate leaders from serving as officers or directors of publicly held companies.

In other words, this proposal by Bush is a way to open up a fund-raising pipeline to the White House. Disgraced former execs will give big wads of cash to the president for political campaigns in exchange for presidential pardons that will let them again serve as officers or directors of corporations.

Who said GW Bush was a dummy? This proposal is inspired! Diabolical, but inspired nevertheless.
posted by Holden at 1:38 PM on July 9, 2002


You can find rising and falling indicators in almost any climate.

So much spin that we're all getting dizzy, muppetboy.
posted by ljromanoff at 1:54 PM on July 9, 2002


So much spin that we're all getting dizzy, muppetboy.

Who said irony was dead?
posted by y2karl at 2:02 PM on July 9, 2002


If there's fraud, we need to see real prison time for the offenders... and not country club or house arrest, but federal pound-me-in-the-ass prison.

</Office Space>

Wouldn't mind seeing that Texan who insider-traded Harken taking a fall as well.
posted by kurumi at 2:14 PM on July 9, 2002


clevershark - That's a lot of peanuts. But I get a special deal where I only have to keep 2 million of 'em at my house.
posted by snakey at 2:21 PM on July 9, 2002


My point is that you're essentially data mining to support your case. Or possibly we're just talking about different timeframes. If we're talking about now as in Q2, 2002, then you have a point. But if we're talking now as in the first decade of the new millenium, I think you are sadly deluded because there is a great deal of information that indicates a high level of probability that the US economy over the next 5-10 years will continue to rapidly weaken: the dollar is weak and likely to continue weakening (george soros recently suggested a possible loss of 30%, and gave a plea for foreign intervention), Tobin's q is still higher than in most past stock market crashes in the past century (PEs also suggest a similar overvaluation of in excess of 50% in the capital markets), MZM has exploded, foreign capital is outflowing, the trade deficit is up (which is probably masking inflation), consumers are at a record level of debt, real personal savings has approximately hit zero, the mass of buyers in the capital markets are (you guessed it) the corporate sector itself (see "conflict of interest"). Frankly, I think the ONLY thing holding the whole house of cards together is artificially low interest rates which are probably responsible for that 6.1% and now 2.5% spurt (dying?) as individuals have been exploiting low rates for home financing. But eventually, the low returns on investment will cause someone in the capital markets to blink, whether it's a realization that markets are going to stagnate or decline for many years now or simply foreign investors pulling the rest of their assets out... then suddenly all these huge mutual funds will start selling to try to cut losses and the capital markets will plummet (as they almost surely must to bring q back to its mean). The capital markets plummetting will in turn cause the debt markets to dry up substantially and the whole economic downturn cycle will have begun in earnest. I believe that intervention has DELAYED, but will not ultimately PREVENT the logical outcome of the wild excess and speculation that was set in motion in 1995 (mainly due to stock options). It's like drinking all night and then expecting not to have a hangover. Not going to happen! Anyway, I don't see anything positive about a near turn growth spurt in the face of what appears to be very high probability of something like the 1970's or worse. If we don't see a major economic downturn after what just happened in the capital markets, it will be a first in all of economic history! New territory is always possible. Just not very probable.
posted by muppetboy at 2:21 PM on July 9, 2002


$23.2M loss? After the staggering numbers we've seen in the past two years, that seems little but peanuts...

No one ever said George was an overachiever.
posted by dogmatic at 3:10 PM on July 9, 2002


No one ever said George was an overachiever.

No, No, No, it's shitweasel that's not an overachiever.
posted by Wulfgar! at 4:05 PM on July 9, 2002


muppetboy: I don't disagree with your assesment of the economy, but almost everyone says colloquially that the economy is rising or falling when they mean GDP is growing or shrinking. That's what I understood Bush to mean, and I'd be surprised too many people were particularly confused by it.
posted by electro at 4:08 PM on July 9, 2002


I often find it hilarious to see dot-commers whining about the Enron and Worldcom CEOs... it would be REALLY interesting to see how many people on MeFi have drawn huge salaries working for companies which had a snowball's chance in hell of succeeding before going under, leading to the so-called 'economic crisis' everyone says we're in...

In other words, there are many of us that made good money in the past few years essentially screwing investors. While it may be fun demonizing the CEOs of wastrel firms, one has to wonder, and sometimes worry, as to how far down the money trail the lynch mobs are willing to get to.
posted by clevershark at 5:03 PM on July 9, 2002


Unfortunately for me, clevershark, I got into this industry just as everything was tanking.

Maybe it's all my fault?
posted by mr_crash_davis at 5:31 PM on July 9, 2002


electro: yeah i kinda figured that. i'm a bit more precise about things usually. i'd say "GDP" or loosely "production" is rising not "the economy" is rising.

the scary thing about the bush speech is that it addresses precisely NONE of the stupendous conflicts of interest which got us in this mess in the first place. i can think of no less than 4 of these issues offhand which could easily lead to the whole thing happening all over again. no wonder various polls (and the indexes) show an overwhelming vote of "no confidence". ridiculous stuff!
posted by muppetboy at 7:07 PM on July 9, 2002


While it may be fun demonizing the CEOs of wastrel firms, one has to wonder, and sometimes worry, as to how far down the money trail the lynch mobs are willing to get to.

Bernie Ebbers made, what, $50-odd million in less than ten years from the sale of shares alone. I don't see a whole lot of trickle-down there to the kind of people who are pulling in a vaguely decent wage on the lower rungs of the corporate ladder, whatever the industry. And while you might be happy to castigate the mules and the monkeys, it diverts attention more than a bit from the barons and the organ-grinders. But that's typical.
posted by riviera at 8:22 PM on July 9, 2002


Worldcom hid four billion dollars in operating expenses. Granted, it wasn't all wages, but it's a safe bet that the lion's share of the $4B served to keep people employed who otherwise would have had to be laid off.

You may not be able to see that... "But that's typical".
posted by clevershark at 9:35 PM on July 9, 2002


Money = Money in corporate eyes; NO MORE wage-Labor-slavery. I call for a revolution. It is the only way.
posted by Kodel at 11:51 PM on July 9, 2002


Clevershark, if Worldcom commited fraud to keep employees on the job for a little longer, they did not do it for the employees, they did it to keep from having their scam collapse.

Deming said "it's the managers fault", and the managers that hired him protested, wanting him to justify such a blanket statement. His answer was always "who had decision authority?".

Good luck on your "big picture" crusade. I suspect most people will still be caught in that "personal responsibility" meme that's been going around.
posted by dglynn at 12:16 AM on July 10, 2002


Slate has a concise piece on Bush's double standards.
posted by muckster at 12:22 AM on July 10, 2002


kodel: best revolution is internal. read "your money or your life". read thoreau. think simple. i have cut my consumption from around $2500/mo (was living in CA at the time) to under $1000/mo. and honestly, i can't think of a single thing that i truly miss about my former way of living. with vastly reduced needs and prudent investment, one does not necessarily have to be a wage slave for a lifetime.
posted by muppetboy at 10:20 AM on July 10, 2002


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