Bush Is to Enron What Clinton Is to...
Why didn't Bush try to bail out Enron, just as Clinton and Rubin bailed out Long Term Capital Management? Partly because the really big banks stood to lose a lot if LTCM crashed, so a fed rescue was engineered.
In the case of Enron two of the company's largest creditors, Citibank and JPMorgan/Chase, well aware of the dodgy state of the company, had packaged up their Enron debt as "credit derivatives" and sold them on to pension funds. So Enron's crash was not going to bring down the big banks, or even damage their profits (which have remained good).
But if the big banks had stood to lose out bigtime then it would have been a different story. The Senate hearings last week confirmed that the banks knew that there were big problems with both Enron and WorldCom?in fact they helped devise the "prepays" (loans disguised as trades) and other devices that concealed how highly leveraged the companies were. See "Banks 'helped Enron disguise debt,'" Financial Times, 7/23. The next day's FT quoted an internal e-mail exchange at Chase: One wrote simply "Dollars 5 bn in prepays!!!!!!!!" while the other replied, "Shut up and delete this e-mail." (FT, 7/24; an exchange later described as "misstatements by young bankers.")
These issues won't go away because the big pension funds are taking the banks to court. CalPERS and CalSTRS (representing teachers) and Lacera (Los Angeles County Employees Retirement Association) have taken action against the large banks, including Citibank and Chase, that underwrote WorldCom bonds even though they knew the dreadful state of their finances.
Angelina and The Times
My plan is to take a few kicks at The New York Times, having caught sight of a front-page headline in last Sunday's national edition that imparted the startling news that "IRS Loophole Allows Wealthy to Avoid Taxes" over a report by David Cay Johnston.
Some NYT editor must have concluded that this headline was too urgently subversive. By the final edition the hed had been cautiously modified to "Death Still Certain, But Taxes May Be Subject to a Loophole."
But first a word or two about Angelina Jolie. I told her right from the start that Billy Bob was a dirtbag who would play her false, and a dirtbag is what he turns out to be. She sends him off to therapy, in a last-ditch effort to save their union, and he seduces the therapist. So say the tabs, and who are we to gainsay them? Into the trashcan go the vials of blood, along with the implement with which they mutilated themselves, the better to express their passion.
I say: Angelina, you're well shot of him.
Back to the Times. I finally got around to reading Ken Auletta's New Yorker profile of the NYT's executive editor, Howell Raines. All 17,000 words of it, printed in the June issue, not one phrase of which escaped the amiable blandness that is Auletta's trademark. How sad to think that The New Yorker, which once featured Liebling and Woollcott, is now content with Auletta's humdrum flatteries of the Fourth Estate.
Outside the Sulzberger empire, who really cares about Raines? Not me, though I do remember him for all those silly editorial sermons about Bill Clinton's sex life.
The pertinent question is whether the Times is a good newspaper, and the answer there is, all too often it isn't. Part of the reason the prose of Paul Krugman and Frank Rich seems so lively is that they shine amid darkness. The news pages are clogged with prose that is either pedestrian or arch, the latter being the besetting vice of journalists trying to turn in quality writing. And even the editorial pages are dimmer than they were when Gail Collins was writing during Election 2000. Collins was a delight, and so they moved her onto the editorial board, and now she's writing much less. My own suspicion is that someone figured out that Collins was showing up Maureen Dowd as the commentator equivalent of Bud Light, and shielded Dowd from further embarrassment by shutting down Collins, via editorial promotion, a familiar stratagem.
The Times spent so many years through the 1990s printing stupid stories about the triumph of neoliberalism and of the free market that even if its foreign and economic correspondents had suspicions that all might be well, they prudently suppressed their doubts. So the Times missed what was actually happening in the former Soviet Union, or in Argentina, Brazil and the other kleptocracies of Latin America. The only reason more isn't made of the stupidity of the Times' editorial pages is that The Wall Street Journal's opinion pages are so violently demented that almost any other editorial voice sounds sane by comparison.
But by and large our opinion-writing classes are even stupider than they were 20 years ago. Take The New York Times' initial reaction to the attempted coup against President Hugo Chavez in Venezuela. If there was ever a coup urgently and publicly demanded by Washington, this was it. Chavez was up there on the Wanted List, just under Saddam. When the attempt on Chavez finally came in mid-April, the Times swiftly editorialized that Chavez's "resignation" meant that "Venezuelan democracy is no longer threatened by a would-be dictator." Eschewing the word "coup," the Times explained that Chavez "stepped down after the military intervened and handed power to a respected business leader." The editorial called Chavez "a ruinous demagogue," and proclaimed that "Venezuela urgently needs a leader with a strong democratic mandate," subsequently undercutting the majesty of this statement by having conceded that Chavez himself actually had a democratic mandate, having been "elected president in 1998."
Three days later, Chavez was back in power and the Times ran a second editorial half-apologizing for its earlier triumphalism. "In his three years in office, Mr. Chavez has been such a divisive and demagogic leader that his forced departure last week drew applause at home and in Washington. That reaction, which we shared, overlooked the undemocratic manner in which he was removed. Forcibly unseating a democratically elected leader, no matter how badly he has performed, is never something to cheer." Which of course is exactly what the Times had initially done, without raising any unpleasant questions as to what role the CIA had in the attempted coup.
The Middle East? The tilt to Israel is noticeable to a powerful extent with straight news coverage, even more obvious with analysis, and blatant with editorial and op-ed coverage. We're treated to frequent features on the personal and psychological impact of suicide bombings on Israelis, but seldom see stories about the impact on Palestinians of the occupation and all its aspects?the civilian deaths, the roadblocks, the land confiscation, the curfews, the depredations by settlers, the shootings by soldiers, the destruction of olive groves, etc., etc. Imbalance in news coverage is chiefly a matter of omission rather than commission, and since the beginning of the intifada almost two years ago, the Times has only rarely given casualty totals for Palestinians and Israelis?one suspects because Palestinian deaths outnumber Israeli deaths by about three to one, which makes it difficult to portray Israel as the party under siege. (In contrast, The Washington Post did report casualty figures with some regularity until Israel's reoccupation of the West Bank in April.)
Most Times editorialists have not yet seen fit to comment on the July 22 Israeli missile attack on Gaza, although they generally do run editorials decrying large Palestinian terrorist attacks. The Times also seldom uses the word "occupation" to describe Israel's 35-year-old rule over the West Bank and Gaza, seldom describes East Jerusalem as occupied territory, seldom informs readers that the 200,000 Israelis who live in East Jerusalem are settlers who reside not in "neighborhoods" or in "suburbs" of Jerusalem but in settlements built on land confiscated from Palestinians, seldom reports on the steady expansion of Israeli settlements throughout the West Bank and seldom indicates that the intifada is an uprising against Israel's occupation. As Kathleen Christison, a former CIA analyst who's written a couple of fine books on the Palestinian questions, puts it to me, "One gets the impression that few if any Times correspondents understand what drives the intifada or accept that there is any legitimacy to Palestinian resistance to the occupation."
The Times demonstrated its partisan approach most noticeably in July 2001 in its commentary on a major one-year-later retrospective on the Camp David summit published by Jerusalem bureau chief Deborah Sontag. Christison points out that "In a striking?and, one must assume, deliberate?effort to maintain its own blame-Arafat position on Camp David, a Times editorial on the Sontag story undermined Sontag by contradicting her principal conclusion."
Having done extensive interviews with Israeli, Palestinian and American participants in the summit and in-depth analysis of what went wrong, Sontag concluded that Arafat was not solely to blame for the summit's collapse and that all three parties were responsible for mistakes made over the entire seven years of the peace process. A "potent, simplistic narrative has taken hold" in Israel and the U.S., Sontag wrote. "It says: Mr. Barak offered Mr. Arafat the moon at Camp David last summer. Mr. Arafat turned it down, and then 'pushed the button' and chose the path of violence." But officials to whom she spoke had concluded that the dynamic was actually far more complex than this, that Arafat did not bear sole or even a disproportionate share of the responsibility. In fact, Sontag concluded, Barak did not offer Arafat the moon at Camp David but rather proposed a solution that might have been generous and even politically courageous in Israeli terms, but that would not have given the Palestinians what they regarded as a viable state.
Rather than accept Sontag's considered assessment of where responsibility lay, a Times editorial two days later took care to praise Barak and blame Arafat. Barak had come to Camp David, the editorial proclaimed, "with a daring offer, a peace plan that essentially vaulted over the interim steps outlined under the Oslo accords? Mr. Barak gambled that Mr. Arafat would accept his approach." But, the editorial went on, Arafat was not up to the task and stirred up "the violent uprising" that erupted two months later.
Of course the worst offender was Thomas Friedman, who in repeated columns over two years heaped blame on Arafat and the Palestinians and seriously distorted what Israel offered at Camp David (repeating the fiction that Barak offered "94% of the West Bank [and] half of Jerusalem," never mentioning that the resulting so-called "state" would have been broken up into several noncontiguous parts).
For which, among other sins of commission and omission too numerous for individual citation, Friedman was given his third Pulitzer, possibly the most ludicrous decision in the long and infamous lifespan of the Pulitzer industry. Why did the Pulitzer board, overruling the various juries on at least two instances, decide to heap seven prizes on the Times last April? I thought Les Payne (himself victim of the Pultitzer board when it overruled a jury's decision to honor him for foreign reporting) put it well in Newsday: "The tilt toward the Times, I suspect, issues, at bottom, from the all-too-American notion of rallying around the flagpole? [T]he Pulitzer board might give the nod to a 'second-tier' paper during peacetime? Once the balloon goes up, however, it's back to the flagpole, and the closest thing the newspaper industry has to a flagpole is The New York Times. The move to The Times is so much easier, given its visibility and clout and number of sheep-dipped Timesmen the paper has spread over the industry and in academia."
So the function of those seven awards was to tell the world, See, we really do have a good newspaper. It must be good if it wins seven Pulitzer prizes.
Trouble is, just like I said at the start, the Times really isn't that good, if you want to find out what's going on.
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