ENRON & FRIENDS

 
July 1, 2002:  Political humorist Dave Ross pointed out today that the federal government is hardly in a position to cast stones at others when it comes to demanding honest accounting practices.  This is a salient point.  We all should be able to remember that one of the most egregious recent examples of the kind of creative accounting that artificially inflates expected revenues was the argument that the Republican party made for justifying George W. Bush's huge upper bracket tax cut.

Many of the contorted accounting practices currently used in the federal budget were unheard of before the early nineteen eighties, when everyone scrambled for ways to deal with the enormous deficit arising from Ronald Reagan's earlier massive tax cut for upper brackets.  First, the GOP fudged their calculations in order to justify the supply-side prediction that it wouldn't create problem deficits -- in one case they went and re-wrote the rules for the most advanced computer model of the economy available at the time, until it gave the answers they wanted.  Basically, they lied their asses off about what the budgetary consequences would be... just as they did again for this most recent tax cut, which even before 9/11 went far beyond killing the Clinton surplus and plunged us into a substantial deficit.  And then, once the huge deficits appeared, everyone cooked up all kinds of bookkeeping distortions just in order to keep the government running, and to get budgets passed through the ideological minefield that then developed in congress, in which dishonest numbers provided fig leaves to politicians who did not want to be seen agreeing to some of the hard decisions that then had to be made.

Keep this in mind when you're deciding things such as whether to trust political forecasts -- especially GOP forecasts -- about such issues as privatizing social security.

Why on Earth did they pull this crap?  In Reagan's day, they had the excuse of tax cuts being a popular issue to win an election with.  In 2000 that was no longer true.  They pulled out this dishonest rationale for a tax cut, I believe, for one reason: because corrupt (and corrupting) corporate outfits like Enron asked them to.
 


 
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