Theocratic Agendas

In the U.S., Christian fundamentalists also escalated their political activism in opposition to America’s secular political traditions. Falwell's Moral Majority and other Christian Right groups led campaigns to demonize feminists, homosexuals, "secular humanists" and liberals in general.

A key figure in supplying a mysterious flow of capital for this undertaking was the Rev. Sun Myung Moon, a South Korean theocrat who espouses a totalitarian form of Christianity that would eradicate American democracy and place the world under his authority. While publicly avowing love for America, Moon privately tells his followers that America is "Satanic" and represents "Satan’s harvest."

In one speech to his believers, Moon said his eventual dominance over the United States would be followed by the liquidation of American individualism. "Americans who continue to maintain their privacy and extreme individualism are foolish people," Moon declared. "The world will reject Americans who continue to be so foolish. Once you have this great power of love, which is big enough to swallow entire America, there may be some individuals who complain inside your stomach. However, they will be digested."

Since 1982, Moon has financed one of the conservative movement’s most influential media outlets, The Washington Times, as a way to build popular support for conservative politicians and undermine liberals and centrists. Moon also subsidized conservative direct-mail operations and sponsored conferences that paid money to influential politicians.

The Reagan-Bush administration worked closely with Moon’s apparatus. Ronald Reagan called Moon’s Times his "favorite" newspaper. After leaving office, George H.W. Bush gave paid speeches in support of Moon, including an appearance in Argentina where Bush hailed Moon’s Washington Times for bringing "sanity" to Washington and called Moon "the man with the vision." [For details, see "The Dark Side of Rev. Moon" series at Consortiumnews.com]

With devastating effect, Moon and more traditional Christian fundamentalists have targeted political leaders associated with "liberalism." For instance, President Clinton was pursued for eight years in a relentless campaign to destroy him and his political influence.

Paula Jones

One of the Christian fundamentalist groups joining in the anti-Clinton assaults was the Rutherford Institute, which was inspired by the teachings of Rousas John Rushdoony, an advocate of Christian Reconstructionism, a movement that would replace democracy with "Biblical law."

The Rutherford Institute financed the Paula Jones sexual harassment suit against Clinton. Rutherford’s leader John Whitehead, who appeared on cable news shows on behalf of Jones, has advocated the reorganization of the United States as a "Christian Nation." In his book, The Separation Illusion, Whitehead opposes religious pluralism and argues that the doctrine of separation of church and state causes "the true God" to be an "outcast" and a "criminal." [See Frederick Clarkson’s "Paula’s Onward-Marching Christian Soldiers" at Consortiumnews.com]

In his political rise, George W. Bush cultivated Christian fundamentalists by wearing his born-again religious fervor on his sleeve.

Bush courted Christian Right leaders with speeches at leading fundamentalist institutions such as Bob Jones University in South Carolina. He won Robertson’s key backing in defeating Sen. John McCain’s primary challenge.

Bush also enjoyed the strong support of Moon’s Washington Times, which aggressively promoted stories questioning Al Gore’s mental stability and his supposed tendency toward "delusions." [See "Al Gore vs. the Media" at Consortiumnews.com]

Since taking power in January, Bush has rewarded his Christian Right followers. He has chipped away at the church-state separation by touting his "faith-based" initiative to put government money into religious organizations engaged in social services.

Bush imposed strict limits on federally funded stem-cell research. He named fundamentalist-favorite John Ashcroft to be attorney general. And Bush has vowed to appoint conservative anti-abortion justices to the U.S. Supreme Court.

Separation of church and state may be a principle that shines with new relevance today amid the bloodshed that stretches from Jerusalem to Kabul to New York City. But Bush has failed to explain the principle's practical logic to the world.

Israel-Palestine

Bush also has failed on a third front, the Israeli-Palestinian conflict, again letting politics and ideology obscure a possible route to a solution.

During his first months in office, Bush repudiated Clinton’s Middle East policy of pressing for a comprehensive peace agreement between Israel and Palestine. Clinton’s policy had been staunchly opposed by right-wing commentators, such as the Washington Post’s Charles Krauthammer, a neoconservative supporter of Israel.

Bush chose to follow the hard-line strategy against the Palestinians charted by Krauthammer and others. Some foreign-policy sources say Bush picked that route out of a belief that his father lost in 1992, in part, because of Israel’s suspicion that the elder Bush privately favored the oil-rich Arab countries and couldn't be trusted.

Possibly with 2004 in mind, Bush cast aside any appearance of balance in the first several months of his presidency. Bush singled out Palestinian leader Yasir Arafat for primary blame for the continued Israeli-Palestinian violence and essentially let Likud leader Ariel Sharon off the hook.

Bush voiced no public sympathy for the worsening conditions of Palestinians living in the squalor of Gaza and other fenced-in areas. In early September, Bush ordered U.S. diplomats to walk out of a United Nations racism conference because of draft language criticizing Israel’s treatment of Palestinians.

The tragedy of Sept. 11 did not alter Bush’s basic strategy toward the Israeli-Palestinian conflict. Many Americans might have favored a stern demand to both sides to accept a reasonable compromise that protected Israel’s security while granting the Palestinians an economically viable homeland – or perhaps a solution that forged a single secular state with constitutional protections for all religions.

But Bush made no such move. His emissaries continued to insist that cease-fires of specific lengths were necessary before more substantive negotiations. However, the time limits turned into deadlines for Islamic suicide bombers to inflict bloody outrages against Israeli civilians. The Israeli government then responded with helicopter attacks and targeted killings of Palestinian leaders.

Four months after the Sept. 11 attacks, Bush seems clueless about how to advance the Israeli-Palestinian peace process. Meanwhile, the post-Sept. 11 public pressure for action has dissipated and the tit-for-tat killings have taken on a grim look of business as usual.

Missed Warnings

Not only has Bush failed to address the larger threats that continue to give rise to terrorism, he did not protect the United States from the Sept. 11 attacks themselves.

Though columnist Andrew Sullivan and other conservative writers have gone to great lengths to blame former President Clinton for failing to stop the Sept. 11 attacks, the reality is that the Clinton administration did thwart previous attacks, including the millennium bombers, and waged covert campaigns to disrupt and kill leaders of al Qaeda.

While Clinton and his predecessors can be faulted for not doing more about terrorism, George W. Bush deserves blame for ignoring the more immediate dangers. It wasn't as if there were no warnings.

On Jan. 31, 2001, just 11 days after Bush's inauguration, former Sens. Gary Hart and Warren Rudman unveiled the final report of a blue-ribbon commission on terrorism that bluntly warned that urgent steps were needed to prevent an attack on U.S. cities.

"States, terrorists and other disaffected groups will acquire weapons of mass destruction, and some will use them," the report said. "Americans will likely die on American soil, possibly in large numbers."

Hart specifically noted that the nation was vulnerable to "a weapon of mass destruction in a high-rise building."

Little, however, was done. Between a news media that still obsessed over "Clinton scandals," such as the later debunked stories of his aides "trashing" the White House, and a new Bush administration focused on domestic concerns, such as tax cuts, the warning drew scant attention.

When congressional hearings on the findings were set for early May, the Bush administration intervened to stop them, an article in the Columbia Journalism Review reported. Presumably, Bush did not want to seem behind the curve.

So, instead of embracing the Hart-Rudman findings and getting to work on the recommendations, Bush set up a White House committee, headed by Vice President Dick Cheney, to examine the issue again and submit a report in the fall.

Former Republican House Speaker Newt Gingrich, who had joined President Clinton in creating the Hart-Rudman panel, acknowledged that Bush's actions delayed progress. "The administration actually slowed down response to Hart-Rudman when momentum was building in the spring," said Gingrich in an interview cited by the CJR study of press coverage of the terrorism issue. [See http://www.cjr.org/year/01/6/evans.asp ]

Alarm Bells

By late spring, other alarm bells were ringing.

Credible evidence of what became the World Trade Center/Pentagon attacks began pouring in to U.S. intelligence agencies. "It all came together in the third week of June," said Richard Clarke, who was the White House coordinator for counter-terrorism. "The CIA’s view was that a major terrorist attack was coming in the next several weeks." [See The New Yorker, Jan. 14, 2002]

The intelligence community also learned that two suspected terrorists had penetrated the United States, but the FBI could not find them.

As these dangers grew, Bush focused not on terrorism but on stem-cell research and other domestic issues that played well with his Christian Right allies. Bush took off the month of August for a working vacation that interspersed relaxation on his Texas ranch with his speech on stem-cell policy and trips to non-coastal cities to praise "heartland" values.

Former Sen. Hart tried to rekindle interest in what he viewed as the pressing threat of terrorism. On Sept, 6, he went to the White House for a meeting with National Security Adviser Condoleezza Rice and urged the White House to move faster. Rice agreed to pass on Hart's concerns to higher-ups. [See http://www.cjr.org/year/01/6/evans.asp ]

Five days later, despite all the warnings, Bush and his administration were caught flatfooted. Two of America's greatest landmarks were leveled, with thousands of people killed. For the first time in history, the Pentagon was attacked and partially destroyed.

After the attacks, however, the nation rallied around Bush. He won praise for unleashing the U.S. military against Afghanistan and pulling together a coalition that backed the war. Ironically, the attacks that his administration had done nothing to stop boosted Bush's approval ratings to historically high levels.

God's Will

The news media's praise for Bush was unbridled. On Dec. 23, for instance, NBC's Tim Russert joined New York Mayor Rudy Giuliani, Cardinal Theodore McCarrick and First Lady Laura Bush in ruminating about whether divine intervention had put Bush in the White House to handle this crisis.

Russert asked Mrs. Bush if "in an extraordinary way, this is why he was elected." Mrs. Bush disagreed with Russert's suggestion that "God picks the president, which he doesn't."

Giuliani thought otherwise. "I do think, Mrs. Bush, that there was some divine guidance in the president being elected. I do," the mayor said. McCarrick also saw some larger purpose. "I think I don’t thoroughly agree with the first lady. I think that the president really, he was where he was when we needed him," the cardinal said. [For the full Meet the Press transcript, go to http://www.msnbc.com/news/677134.asp or see www.mediawhoresonline.com ]

Theologically speaking, it was less clear why God didn't simply let Bush actually be elected, rather than having him get a U.S. Supreme Court ruling to stop the vote count in Florida – or why God didn't give Bush the foresight to act on the Hart-Rudman warnings so he could thwart the terrorist attacks altogether.

More mundane realities can explain Bush's subsequent failure in squandering an unparalleled opportunity to take decisive action against some of the root causes that have fed – and will continue to feed – terrorism. The hard fact is that Bush, weighed down with political and ideological baggage, missed the moment.

AN ENVELOPE has walked onto my desk containing the memorandum for Argentina's "Country Assistance Plan" for the next four years. The document, signed by World Bank President James Wolfensohn, includes a warning that recipients must use the document "only in the performance of their official duties."

Here's the update of my prior report on the IMF, World Bank and Argentina.

In December in Buenos Aires, the Paris of Latin America, police gunned down 27 Argentines after they chose to face bullets rather than starvation. The nation's currency had crumbled and unemployment had shot up from a grim 16 percent to millions more than the collapsed government could measure. The economy had been murdered in cold blood.

Who done it? The killers left fingerprints all over the warm corpse. A "Technical Memorandum of Understanding," dated September 5, 2000, was signed by Pedro Pou, president of Argentina's Central Bank for transmission to Horst Köhler, managing director of the International Monetary Fund. I received a complete copy of the inside report from . . . let's just say the envelope lacked a return address.

The "Understanding" required Argentina to cut the government budget deficit from $5.3 billion in 2000 to $4.1 billion in 2001. Think about that. Eighteen months ago, when the "Understanding" was drafted, Argentina was already on the cliff-edge of a deep recession. One in six workers were unemployed. Even the half-baked economists at the IMF should have known that holding back government spending in a contracting economy would be like turning off the engines of an airplane in stall. Cut the deficit? As my 4-year-old daughter would say, "Stooopid."

The IMF is never wrong without being cruel as well. Under the boldface heading, "Improving the Conditions of the Poor," the agency directed Argentina to lop $40 a month from salaries paid under the government emergency employment program; the order cut the salaries 20 percent to $160. The "Understanding" also promised a 12-15 percent cut in civil-servant salaries and a pension "rationalization" (IMF-speak for cutting 13 percent from payments to the aged under both public and private plans). Cut, cut, cut amid a recession. Stooopid.

Salted in the IMF's mean-spirited plans for pensioners and the poor were economic forecasts bordering on the delusional. In the "Understanding," the globalization geniuses projected that, once Argentina carried out the IMF plan to snuff consumer spending, somehow the nation's economic production would leap by 3.7 percent and unemployment would fall.

It didn't. The IMF plan kneecapped industrial production, which fell 25 percent in the first quarter of last year before keeling over completely to interest rates that, by the summer, were running up to 90 percent on dollar-denominated earnings.

Another envelope that walked onto my desk contained the memorandum for Argentina's "Country Assistance Plan" for the next four years. The document, signed by World Bank President James Wolfensohn and dated June 25, included a warning that recipients must use it "only in the performance of their official duties."

My duty as a reporter is to tell you that the plan amounts to a breathtaking mix of cruelty and Titanic-sized self-deception. Written only months ago, when the economy was already plunging into its death spiral, Wolfensohn wrote, "Despite the setbacks, the goals set out in the last [year's] report remain valid and the strategy appropriate." The IMF plan, cooked up with the World Bank, would, "greatly improve the outlook for the remainder of 2001 and for 2002, with growth expected to recover in the later half of 2001."

In this strange, eyes-only document, the World Bank president expressed particular pride that Argentina's government had made "a $3 billion cut in primary expenditures accommodating the increase in interest obligations." In other words, the government gouged spending on domestic needs to pay interest to creditors, mostly foreign banks.

Crisis, indeed, has its bright side, as Wolfensohn crowed to his banker readers: "A major advance was made to eliminate outdated labor contracts." And "labor costs" had fallen due to "labor market flexibility induced by the de facto liberalization of the market via increased informality." Translation: Workers lost unionized industrial jobs and turned to selling trinkets in the street.

What on Earth would lure Argentina into embracing this goofy program? The bait was a $20 billion emergency loan package and "stand-by" credit from the IMF, the World Bank and their commercial bank partners. But there is less to this generosity than meets the eye. The "Understanding" assumed Argentina would continue its "Convertibility Plan," instituted in 1991, which pegged the peso, the nation's currency, to the Yankee dollar at an exchange rate of one-to-one. The currency peg hadn't come cheap. Foreign banks working with the IMF had demanded that Argentina pay a whopping 16 percent risk premium above U.S. Treasury lending rates for the dollars needed to back the scheme.

Now do the arithmetic. When Wolfensohn wrote his memo, Argentina owed $128 billion in debt. Normal interest plus the premium amounted to $27 billion a year. In other words, Argentina's people didn't net one penny from the $20 billion in "bailout" loans. The debt grew, but none of the money escaped New York, where it lingered to pay interest to U.S. creditors holding the bonds. The creditors range from big fish, led by Citibank, to little biters such as Steve Hanke.

I spoke with Hanke, president of Toronto Trust Argentina, an "emerging market" fund that loaded up 100 percent on Argentine bonds during a 1995 currency panic. Cry not for Steve, Argentina. His 79.25 percent profit that year put his outfit at the top of the speculators' league.

Hanke profits by betting on the failure of the IMF policies. This junk-bond speculation--the players call it "vulture investing"--is merely his lucrative avocation. In his day job as a Johns Hopkins University economics professor, Hanke freely offers a cure for Argentina's woes. The advice would put him out of business: "Abolish the IMF."

And, Hanke advised, abolish the peg. But the importance of this one-for-one dollar exchange rate has been far overstated. When the Argentine government finally devalued the peso in January, it wiped out the value of local savings accounts. The currency peg is best understood as the meat hook on which the IMF hung Argentina's finances. It forced Argentina to beg and borrow a steady supply of dollars to back each peso, and this became the rationale for the IMF and World Bank to let loose in the pampas their Four Horsemen of neoliberal policy: liberalized financial markets, reduced government, mass privatization and free trade.

"Liberalizing" financial markets means allowing capital to flow freely across a nation's borders. Capital has indeed flowed freely. Last year Argentina's rich dumped their pesos for dollars and sent the hard loot to investment havens abroad, bleeding as much as three-quarters of a billion dollars a day from Argentina.

Once upon a time, government-owned national and provincial banks supported their nation's debts. But in the mid-1990s, President Carlos Saúl Menem's government sold these off to foreign operators such as Citibank of New York and Fleet Bank of Boston. Former World Bank advisor Charles Calomiris told me these bank privatizations were a "really wonderful story." Wonderful for whom? With the foreign-owned banks unwilling to repay Argentine depositors, the government has frozen savings accounts, effectively seizing money from regular Argentines to pay off the foreign creditors.

To keep the foreign creditors smiling, the "Understanding" also required "reform of the revenue sharing system." This is the IMF's kinder, gentler way of stating that the U.S. banks would be paid by siphoning off tax receipts that the provinces had earmarked for education and other public services. The "Understanding" also found cash in "reforming" the nation's health insurance system (cut, cut, cut).

And when cuts aren't enough to pay creditors, one can always sell "la joyas de mi abuela" (grandma's jewels), as journalist Mario del Carril describes his nation's privatization scheme to me. Notoriously, Vivendi Universal corporation, the French infrastructure and entertainment giant, picked up a big hunk of the water system in 1995--and promptly cut staff and raised prices (by 400 percent in Tucumán Province). In his confidential memo, the World Bank's Wolfensohn sighs, "Almost all major utilities have been privatized," so now there's really nothing left to sell.

The coup de grâce, spelled out in the "Understanding," was imposition of "an open trade policy." This required Argentina's exporters (with their products priced via the peg in U.S. dollars) into a pathetic, losing competition against Brazilian goods priced in that nation's devalued currency. Stooopid.

Have the World Bank and IMF learned from their horrific errors? They learn the way a pig learns to sing: They can't, they won't and, if they try, the resulting noise is unbearable. On January 9, with the capital in flames, IMF Deputy Managing Director Anne Krueger ordered Argentina's latest in temporary presidents, Eduardo Duhalde, to cut still deeper into government expenditures. (President George W. Bush backed the IMF budget-cutting advice -- the same week he demanded that the U.S. Congress adopt a $50 billion scheme to spend the United States out of recession.)

Wolfensohn's memo insisted that the World Bank-IMF scheme could still work: All Argentina needed to do was "reduce the cost of production," a step that required only a "flexible workforce." Translation: even lower pensions and wages, or no wages at all. To the dismay of Argentina's elite, however, the worker bees proved inflexibly obstinate in agreeing to their impoverishment.

One inflexible worker, Anibal Verón, a 37-year-old father of five, lost his job as a bus driver from a company that owed him nine months' pay. Verón's joined angry unemployed Argentines, known as "piqueteros," who block roads. In November 2000, in clearing a blockade, the nation's military police killed him with a bullet to the head.

Globalization boosters portray resistance to the New World Order as a lark of pampered, naïve western youths curing their ennui by, as British Prime Minister Tony Blair puts it, "indulging in protest." The U.S. and European media play to this theme, focusing on demonstrations in Seattle and Genoa, while burying news of a June 2000 general strike honored by 7 million Argentine workers.

While the July 20 death in Genoa of demonstrator Carlo Guiliani was front-page news in the United States and Europe, Verón's death went unreported. Nor did U.S. media record the June 17 deaths of protesters Carlos Santillán, 27, and Oscar Barrios, 17, gunned down by police in a churchyard in Salta Province, north of Buenos Aires. Only in December, when Argentina failed to make an interest payment on foreign-held debt, did the Euro-American press suddenly report a "crisis," feeding us the images we expect from Latin America: tear gas, burning cars and a parade of new presidentes taking oaths of office.

The "Understanding" and the Wolfensohn memo are irrefutable evidence of IMF and World Bank guilt in the nation's financial assassination. But did they have accomplices?

Adolfo Pérez Esquivel, leader of Buenos Aires-based Peace and Justice Service, (SERPAJ), a Church-based human rights organization, is documenting cases of police torture of protesters in Salta Province where Santillán and Barrios died. Pérez Esquivel, who won the Nobel Peace Prize in 1980, told me repression and economic "liberalization" are handmaidens. SERPAJ has filed a formal complaint charging police with recruiting children as young as 5 years old as informers for paramilitary squads, an operation he compares to the Hitler Youth.

Pérez Esquivel, who last year led protests against the proposed Free Trade Agreement of the Americas, doesn't agree with my verdict against the IMF in Argentina's death. He notes that the IMF's fatal "reforms" were embraced with enthusiasm by Finance Minister Domingo Cavallo, a World Bank favorite. Cavallo, fired in December after mass protests, is best known by Argentines for heading the nation's Central Bank during the nation's 1976-1983 military dictatorship. For Pérez Esquivel, Cavallo's enthusiastic collaboration with the IMF and World Bank suggests that the untimely demise of the nation's economy wasn't murder, but suicide.
© 2002 Greg Palast was this month named Guerilla News Network's 2001 Reporter of the Year for his exposés of the Bush family for BBC television's 'Newsnight.'

WASHINGTON -- Top administration officials are heaving a sigh of relief that they just said "no" to bids for a government bailout for Enron Corp., the giant energy-trading company that collapsed into bankruptcy.

Nevertheless, with Enron investigations brewing in the Justice Department, the Securities and Exchange Commission, the Labor Department and in Congress, more shoes are expected to drop.

Since the government was apparently directly involved, it's not deja vu all over again in Washington, as far as we know.

But it certainly has all the makings of a major corporate scandal with big names, billions blown, deceived workers who lost their life savings, top executives who sold their stock before the fall, cooked books with hidden partnerships and debts, shredded documents by the Andersen accounting firm and unheeded warnings to Enron Chairman and CEO Kenneth Lay from a savvy woman vice president, that the whole house of cards could come tumbling down.

It sure did -- the largest bankruptcy in American history.

Despite the fact that Enron and its executives and employees invested millions of dollars in political contributions, the government didn't rush to the rescue when the company was coming unglued. Thus, the fallout could be limited to the private sector.

But it will have a huge impact there in terms of public confidence in accounting firms, which -- in theory -- are hired by the board of directors to conduct independent, arms-length audits of the company's operations and management.

There are two big problems on the accounting front. The first is that big accounting firms such as Andersen have evolved from independent auditors that work for the board of directors and the shareholders into consulting companies that work for company management.

In the case of Enron, Andersen billed the company $25 million for auditing work and $27 million for consulting work last year. This is an obvious conflict of interest that completely cancels the notion that the auditor is an independent entity.

The second big problem is that accountants get away with this. The SEC, the only government entity that has any hand in policing the largely unregulated accounting industry, has resisted calls to toughen the rules governing accounting firms. The current SEC chairman, Harvey Pitt, used to represent the big accounting firms in his law practice and is on record as saying the SEC has been too tough on the accountants.

Don't look to the SEC to restore confidence in the "audited" financial statements that are relied on by employees, investors, suppliers and lenders. Pitt?s reluctance to get tough on the accounting business led him to devise a new private-sector gimmick for regulating accountants. Sen. Jon S. Corzine, D-N.J., a former Wall Street executive, scoffed at Pitt's solution, saying, "We shouldn't rely on the fox to guard the hen house. It?s time for the SEC to assume this responsibility."

The Enron fiasco also means tough sledding for the president's plans to privatize Social Security with the help of Wall Street. You'd have to be nuts to put your retirement in the hands of folks such as Andersen. Even Enron ended up firing Andersen.

In late October, Lay called Treasury Secretary Paul O'Neill and Commerce Secretary Donald Evans, according to the Cabinet officers. Both O'Neill and Evans smartly decided there was no way that the administration could intervene to save the company from bankruptcy.

Robert Rubin, President Bill Clinton's Treasury secretary who now is chairman of the executive committee at Citigroup bank, called Peter Fisher, undersecretary of the Treasury, to explore the possibility of helping Enron. Rubin's bank had loaned Enron hundreds of millions of dollars. But Fisher declined to help.

White House Press Secretary Ari Fleischer said that when Bush was informed of Lay's spurned appeals for help, the president told O'Neill and Evans, "You did the right thing."

We know there is no such thing as a free lunch, and so the administration has not been totally free of Enron's influence.

According to the New York Times, Lay told Curtis Herbert Jr., chairman of the Federal Energy Regulatory Commission, that he would continue to support him in the job if he would change his views on electricity deregulation. Herbert refused and was replaced.

Although Vice President Dick Cheney has refused to give Congress the documents concerning his energy task force, he disclosed that Enron officials had six meetings with the task force staff at the White House, including a half-hour meeting between Lay and Cheney.

Bush has distanced himself from Lay and Enron. He told reporters he had never discussed Enron's financial problems with Lay. He promised that the administration would look fully into the Enron bankruptcy to make sure that "we can learn from the past and make sure that workers are protected."

Meanwhile, O'Neill did not help the administration take the high ground with his statement on Fox Television that Enron's collapse was "part of the genius of capitalism."

"Companies come and go," he said. "People get to make good decisions or bad decisions, and they get to pay the consequence or to enjoy the fruits of their decisions. That's the way the system works."

The way some in the Washington press have been shilling for the Bush II Restoration, it wouldn't be astonishing to see them turn up on TV wearing periwigs and flourishing gilded snuff boxes. Only last month, you may recall, Newsweek's Howard Fineman was gushing over George W. Bush's exquisite fashion sense: "He's a boomer product of the '60s," Fineman marveled "but doesn't mind ermine robes."

Alas, His Majesty's single most generous supporter turns out to have been running the world's largest bookie joint. It collapsed amid heaps of shredded documents, taking the jobs and retirement pensions of thousands-the biggest financial scandal in U.S. history by a big margin. Nevermind that Enron donated $100,000 to pay for Bush's successful campaign to prevent a Florida recount, placed corporate jets at his disposal, then ponied up another $100,000 to finance innauguration festivities. His Majesty's boon companion "Kenny Boy," an overnight White House guest under George I, got quickly demoted to "that man, Mr. Lay."

Enter Sir Howard, 21st Century courtier. "So far, Enron has done nothing to tarnish George W. Bush's standing as a very popular leader in the post 9/11 age," Fineman wrote last week. "There is no indication that he was was aware of, or interested in, the fate of Enron." Once again the White House pleads ignorance, and again Bush's famous impatience with details makes it almost plausible that his secretaries of commerce and treasury, as well as Chief of Staff Andrew Card--all revealed to be inside the loop after the first inoperable denials had to be revised--neglected to inform him that the most powerful company in Texas was going under, taking 40,000 jobs with it. Any other president in living memory would have fired them all for leaving him in the dark about a political event of such magnitude, but not Bush.

Even Fineman concedes that Bush's fecklessness could cause him trouble. But what does the Enron scandal signify? Let Sir Howard explain: "It signals the arrival of a new issue at the centerpiece of politics: retirement security for the always self-obsessed and selfish baby boom generation," he wrote. "As the century began, it seemed the boomers were, for the most part, headed for Easy Street. The federal budget was showing mounting surpluses. Politicians were vowing to protect Social Security funds in a mythical "lockbox." Workers' 401(k)s were bulging with portfolios of ever-rising stocks."

Pause a moment to let Fineman's disdain for the victims of the Enron swindle sink in. Their jobs and life savings have vanished thanks to con men who bought politicians by the boxcar load. (And despite what you hear, almost 80 per cent of Enron largesse went to Republicans.) Many face personal bankruptcy and worse. Yet this smug little fop sees it as an opportunity to work off a grudge against the storied Woodstock generation, so "self-obsessed and selfish" it seems, as to hope for an old age eating something besides Alpo over rice. Exactly how many Enron employees attended the fabled 1969 rock extravaganza in upstate New York, I wonder?

The arrogance of the Washington press clique and its contempt for the anonymous peasants beyond the Beltway has long been one of this column's themes. Doubtless some readers think I've overdone it. Granted, most pundits lack the sublime combination of smugness and stupidity on display in Fineman's column (available online at msnbc.com/news/690390.asp). Indeed, some pundits normally friendly to Bush, among them Chris "Hardball" Matthews and Bob "Capital Gang" Novak, have criticized the administration's inept handling of the Enron mess.

Even so, Fineman remains as reliable a indicator of the press clique's growing power-worship and disdain for democratic values as there is inWashington. During the 2000 campaign, he was one of the most egregious exponents of the idea that Al Gore's "earth tone" clothing was more important than the fact that the arithmetic for George W. Bush's save-the-millionaires tax cuts and Social Security "reforms" didn't add up. Now he tells us with grim satisfaction that "[t]he triple whammy of recession, terrorist attacks and Enron collapse have left the boomers--a cadre of 73 million now beginning to march into the land of early retirement--suddenly worrying about the finances of their later years."

Bush, Fineman thinks, may have a spot of trouble selling further tax cuts. No hint that two thirds of the public will never see a dime from last year's ballyhooed income tax cuts which have turned projected budget surpluses to deficits for the next ten years. Terrorism and recession have little or nothing to do with it.

Has the Washington press corps lost its taste for White House scandal?

Having just begun to examine the details of the Enron crash and the tangled financial and political strands that connect the bankrupt energy trader to almost everyone who is anyone in the Bush administration, several of the most influential scandalmongers already think it’s time to "move on." They contend that since no evidence has been found that would implicate President George W. Bush or any of his appointees in a crime, this story should be relegated to the business pages.

That judgment seems premature, to say the least, and hardly consistent with the hungry attitude of the Clinton era, when putting officials under oath and demanding reams of documents became the highest priorities for nearly every newspaper and network in the nation.

Back then, if the White House appeared defensive, or if the Presidential press secretary was caught giving false information, or if the President himself made a scandal-related remark that was obviously untrue, journalists who smelled blood would bare their teeth and snarl. Today some of the fiercest pundits of yesteryear sound as if they’re ready to whimper and roll over.

Consider the contradictions that have emerged over the past several days. At another time, such a hastily revised narrative would have provoked weeks of furious commentary about cover-ups and candor (or the lack thereof).

Until Jan. 13, Bush press secretary Ari Fleischer insisted that nobody in the White House knew until last week about calls from Kenneth Lay seeking administration aid for his failing firm last fall. Mr. Lay and his associates contacted Treasury Secretary Paul O’Neill and Commerce Secretary Donald Evans, among others, to hint at the market chaos certain to ensue unless the administration helped them cope with banks and credit agencies.

Now, however, we are told that sometime in November, Mr. Evans, the former Bush campaign chief, told White House Chief of Staff Andrew Card Jr. about the calls from Mr. Lay. According to the commerce secretary, Mr. Card replied, "Thank you very much." But supposedly neither of them ever mentioned the Lay pleas to the President, who was also left uninformed by Mr. O’Neill.

As far as his appointees were concerned, the President had no need to know that the world’s largest energy trader, on the brink of implosion, was asking for federal assistance. Why tell him?

For his part, Mr. Bush has suggested that he hardly knew the man he calls "Kenny Boy" until after he was elected governor of Texas in 1994.

Last week, when reporters asked about his relationship with Mr. Lay, the President replied, "He was a supporter of [former Texas Governor] Ann Richards in my run in 1994. And she did name him the head of the Governor’s Business Council, and I decided to leave him in place just for the sake of continuity. And that’s when I first got to know Ken and worked with Ken, and he supported my candidacy."

That incredible statement is just as misleading as the famous remark another President once made about "that woman, Ms. Lewinsky," and much easier to debunk, as demonstrated in the Houston Chronicle. Actually, Mr. Lay’s support of George W. Bush dates back to his first unsuccessful candidacy for Congress in 1978. Mr. Lay, his wife and Enron executives gave Mr. Bush a total of $146,500 in 1994, compared with $12,500 they donated to the Richards campaign that year.

Explaining this choice in a television interview last March, Mr. Lay said, "When Governor Bush, now President Bush, decided to run for the governor’s spot, [there was] a difficult situation. I’d worked very closely with Ann Richards also, the four years she was governor. But I was very close to George W. and had a lot of respect for him, had watched him over the years … and so [I] did support him."

Tempting comparisons with a previous era can be overdrawn, of course. So far as anyone knows, neither the President nor any of his appointees were doing business with Enron when the firm’s principals were ripping off their stockholders and employees.

They had done a lot of political and financial business with Enron and Mr. Lay for years prior to those unfortunate events. They had provided Mr. Lay and his executives with special access to policy makers, including Vice President Dick Cheney. They had followed Mr. Lay’s advice about who should be appointed to regulate his company and how his company should be taxed. They learned that Enron was heading down the drain before anybody else found out, including the company’s sadly misinformed employees, yet kept their mouths shut and did nothing.

NEW YORK-The Israeli-Palestinian two-step goes like this: Israel commits an atrocity, claiming that it is just retribution for a previous Arab attack. The Israeli atrocity doesn't matter because Israeli atrocities invariably go underreported in the Western media. Then some Palestinian group-Hamas, Hezbollah, Islamic Jihad, whatever-retaliates with its own atrocity. This atrocity does matter, because Arab acts of terrorism always play at the top of the evening news.

Both sides say they want peace. Each blames the other for every renewed cycle of violence. Both are right; both are wrong; both are victims; both are thugs.

Palestinian terrorist groups (or freedom fighters, if you support them) are poor. Suicide bombers are cheap and precise. They blow up buses and malls and nightclubs where 99 percent of the people they kill have never harmed a Palestinian.

This causes Israelis who never hated Palestinians before to change their minds.

The Israeli government, though running a war-torn nation with high unemployment and few natural resources, is rich. (Next year, the U.S. will send the Israelis $3 billion, more than a fifth of the American foreign aid budget and a 50 percent increase over this year.) F-16s and helicopter gunships are expensive and precise. The jets and helicopter gunships blow up police stations and houses and cars where 99 percent of the people they kill have never harmed an Israeli.

This causes Palestinians who never hated Israelis before to change their minds. Ariel Sharon's Israel and Yassir Arafat's Palestinian Authority are engaged in a protracted undeclared war. Israel enjoys a serious weight advantage over its 98-pound opponent. It has bigger and better weapons; the Palestinian territory is landlocked, divided and strategically disadvantaged. The U.S. State Department is probably the only reason we haven't seen a six-hour war leading to the incorporation of Palestine into Israel proper.

In recent months, Palestinian terrorists have shot and blown up numerous Israeli soldiers and civilians. Arafat whines that he can't control groups like Hamas, an assertion that few reasonable observers doubt-but that hardly inspires confidence in his ability to sign a peace deal. Israel nonetheless holds him accountable for Palestinian acts of terror, and has done its best to castrate Arafat. For the last month, it has confined him to the West Bank town of Ramallah. It has emasculated his police by bombing its offices and overtly assassinating Palestinian officials. Bulldozing houses and preventing people from commuting to work also sends a devastatingly clear message to ordinary people: we can attack you with impunity, and there's nothing your so-called leader can do about it.

Both sides have legitimate grievances in this conflict. But on January 11, Israel crossed the line. In one of the most outrageously downplayed news stories in years, the Israeli army bulldozed the Palestinian-controlled Gaza International Airport. (Israel said that the demolition was retaliation for the murders of four border guards two days earlier, an incident for which Hamas claimed responsibility.)

Through a spokesman, UN Secretary General Kofi Annan quietly condemned Israel: "Such collective punishment is in violation of the Geneva Conventions." Otherwise, the world has been silent in the face of Israel's massive escalation of violence.

Oddly, so has Yassir Arafat. While thoughtful souls can differ over fair solutions to the 15-month-old intifada, Israel's strike at a crucial part of Palestinian infrastructure is an act of state terrorism so extreme that Arafat's only appropriate response would be a formal declaration of war.

Unfortunately for the Palestinian Authority, it would have to wage its struggle without the benefit of the 50 tons of arms seized by Israel in the Red Sea last week. "The Palestinian Authority does not need this (arms) deal and has nothing to do with it," Arafat told Qatar-based al-Jazeera television. The latter may be true but the former is not. Palestine doesn't stand a chance against Israel's high-tech American weaponry.

Nonetheless, history leads one to conclude Arafat should abandon his untenable current position and make a bid for the immortality of martyrdom by leading his people into battle one last time. He should go legit, and openly declare war against Israel. He would surely be killed, and the Palestinians would certainly be crushed. Yet from the ashes of that short, terrible war would eventually rise a real, viable Palestinian state, bought with blood rather than inked into existence by bureaucrats on the sufferance of Israel. The world would demand it, and would stand for nothing less. At this point, nothing else Arafat can do will lead to an acceptable outcome.

Perception, however, may prove to be the least of Mr. Bush problems in the coming months.

Enron filed for the largest bankruptcy claim in history on December 2nd. Since the implosion, revelations have come fast and furious that Enron executives hid some $600 million in losses within personal 'off-balance-sheet' accounts that kept the company's bottom line illegitimately in the black. This was done to preserve the health of the company's credit rating, an essential component for so large a business, and to keep the value of Enron's stock from collapsing.

Enron's chairman, Kenneth Lay, appears certain to have violated Securities and Exchange Commission laws during his stewardship of the company. For example, Rule 10b-5 (Employment of Manipulative and Deceptive Devices) of the Securities Exchange Act of 1934 reads as follows:

"It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,

1. To employ any device, scheme, or artifice to defraud,

2. To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or

3. To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security."

On August 14th, months before Enron's collapse became a matter of public knowledge, Lay wrote the following email to his employee/stockholders: "Our performance has never been stronger; our business model has never been more robust. ... We have the finest organization in American business today." On August 27th, Lay wrote another email to his employee/stockholders extolling the value of an employee stock option program, describing a "significantly higher price" the stock would bring in the near future.

In an attempt to save his failing company, Lay contacted Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans last fall in search of some sort of governmental assistance. According to O'Neill and Evans, these requests were rebuffed. The fact that Lay even made the calls, however, is prima facie evidence that Lay was fully aware that the emails he sent to his employee/stockholders were based upon incorrect assumptions regarding the strength of Enron and the viability of its stock. In exhorting them to buy into the employee stock option program, he was effectively defrauding them under Rule 10b-5.

Defenders of the Bush administration point to the fact that Lay's pleas for assistance drew no response from O'Neill, or from Bush, who was likewise informed of Enron's impending collapse last fall. These defenders claim that their inaction is proof of their purity; they let the chips fall where they may, and let the "genius of capitalism," in O'Neill's words, determine the fate of Enron.

O'Neill's inaction, however, could prove to have been a serious violation of the duties of his position as Treasury Secretary. According to the Duties and Functions of the Treasury Office, O'Neill is responsible for "enforcing Federal finance and tax laws." Within the bailiwick of this lies the responsibility for the "development of policies and guidance in the areas of financial institutions, Federal debt finance, financial regulation and capital markets."

Treasury Secretary O'Neill was aware of Enron's impending collapse and did nothing to warn or protect the stockholders. A man so intimate with Wall Street, and with Kenneth Lay, could not have missed the disparity between Enron's stock value and the dire financial news he was getting from Enron's chairman. Rather than perform the duties of his office and step in to protect the thousands of Americans who would lose their life savings within the capital market that deserved and expected his guidance, O'Neill chose only to inform Mr. Bush and then remain silent. This was a dire breach of the clearly stated requirements of his position, one that cost a lot of people a lot of money.

Given the conversations between Treasury Secretary O'Neill and Enron chairman Kenneth Lay, questions about the possibility of insider trading violations come to the forefront. A significant number of Bush administration officials had a great deal of money invested in Enron stock. One such official is Mark Weinberger, Assistant Secretary of Tax Policy in the Treasury Department. Mr. Weinberger was in an excellent position to learn of Enron's approaching doom, and may have used this information to get out while the getting was good.

Considering the number of Enron investors within the administration, it is not so farfetched to ask the questions: Did O'Neill truly keep silent about what he knew? If not, did Weinberger become aware of Enron's situation? Did he use this information to dump his Enron stock before the hammer came down? Did he warn other administration officials to do the same? Given the clear timeline of events, the SEC should have no trouble running down these possibilities.

Mr. Bush, unlike his friends and administration officials, may well prove to be legally inoculated from harm in the growing Enron scandal. This does not, however, save him from the shame of his association, and the association of his officials, with Kenneth Lay and his failed company.

Mr. Bush promised to return honor and integrity to the White House, and put his oath to paper with the release of a memorandum entitled "Standards of Official Conduct." Dated January 20, 2001, the day of Bush's inauguration, the memorandum outlined the moral expectations for all personnel within his government.

No. 2 on the list of expectations following this preamble reads, "Employees shall not hold financial interests that conflict with the conscientious performance of duty." Given the fact that Mr. Bush owed his years of political success to the millions of campaign finance dollars provided to him by Enron, it is fair to say that he had a distinct financial interest in the health of the company. It is also fair to say that Treasury Secretary O'Neill was acutely aware of this when he received Kenneth Lay's phone calls. Did this conflict of interest keep him from acting on behalf of Enron stockholders, an action that would have hastened the demise of Bush's main financial backer?

Whether or not Bush and his administration violated the precepts of expectation No. 8, "Employees shall act impartially and not give preferential treatment to any private organization or individual," remains to be seen. One thing does seem painfully clear: a number of high-ranking Enron executives, including Mr. Lay, will soon face serious charges for criminal and SEC violations. In addition, Bush's Treasury Secretary must answer for his failure to act in accordance to the duties outlined in his department's charter. Questions regarding possible insider trading among administration officials who held Enron stock will also be addressed.

Well, it's 2002 now, and that means it's midterm election year. Usually midterm elections are kind of on the dull side, but I think we might be in for some real entertainment this time. Bush got the recession he wished for while he was campaigning. We are in the middle of an undeclared "war" (with a concept instead of another country or government) on terrorism and "evildoers". And Enron didn't have the decency to wait until after the election to go down the tubes and bilk thousands out of their pensions and life savings.. Could be an interesting election this year.

One of the first shots was fired off by Jerry Falwell, who always looked and sounded to me like a sitcom version of a preacher. In the 80's, I used to watch his "Old Time Gospel" freak show for laughs when Channel 9 would pre-empt the 3 Stooges on Sunday mornings. But he says he's for real, so I'll just have to take his word. I have to wonder when he writes articles like this, though: http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=25943 Looks like Jerry doesn't like people who look at him, his organizations, and tactics and think "Taliban", especially the "Democrat" party.

What could the Democrats be talking about? When you take away Falwell's people's restrictive, angry, and bigoted views on women and homosexuals, the witchhunt mentality, the excessive moralizing, the fundamentalism and thinking it needs to be the law for everybody, they don't have anything in common with the Taliban. Not a thing. Jerry doesn't seem to believe that all men should wear beards and all women burkas. And as far as I know, the Taliban never had a "ministry" and TV show devoted to parting the elderly and the gullible from their life savings.

But back to what Jerry said about what he said the Democrats are saying: "Those who adhere to biblical Christianity are remarkably similar to those who adhere to the Taliban..." and "In America, conservative people of faith continue to be the only group that can be rigorously denounced and persecuted without the American Civil Liberties Union stepping in to defend them. It has become fashionable to detest and denounce Christians because we adhere to true and defining standards – something the situational ethicists in the Democrat Party cannot comprehend". I can't speak for the Dems, but I don't think they are talking about conservative Christians who take comfort and strength from their religious convictions and are content to live their lives quietly, secure in their own faith. I think they're talking about people like Jerry and Pat Robertson who want to run everyone else's lives and make everyone believe the same way. Sort of like...the Taliban.

And trying to gain influence through the government is where many people, including the ACLU, part company with the religious right's aims. First off, there is the whole separation of church and state thing. Falwell and others say it isn't in the Constitution, and they're right; those words in that order aren't there. But the concept is. A section of the First Amendment that goes "Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof...." puts it there. And Thomas Jefferson said "that the American people through the First Amendment had erected a "wall of separation between church and state." When it comes to what's in the Constitution, I'll go with Tom Jefferson over Pat Robertson or Jerry Falwell 100% of the time. It's why the ACLU won't defend people trying to push religious views through the government.

Falwell has always complained about catching a hard time for his views. But my news to him is: if you want to get in the political game, you have to be ready to live under a microscope and answer questions about who you are and what you believe and want to do, just like everybody else. Your version of God may work in mysterious ways, but when you are in public and in politics, that "blind faith and/or obedience" thing you want us to do with you isn't going to happen.

I assume that when I hear Jerry say that we're a Christian nation and should live under Christian laws, he means his interpretation of what the law should be. And it makes me want to ask him lots of questions.

1. Since there are more than 200 denominations and sects in the U.S., whose version of the Bible would we use to base laws on? Jerry's a Baptist; where would that leave Jews, Catholics, Hindus, Muslims, atheists, etc.? Who would decide what was going to be the law for everyone? How would it be imposed on all the people who don't subscribe to that belief (and have the right not to) without forcing it on people? Like...the Taliban does.

2. Would these laws be based on the "eye for an eye" Old Testament, or the "turn the other cheek" New Testament?

3. Which version of the Bible would they come from? There are dozens of versions (translations-all with their own differences. There is no "The Bible") of the Bible; King James, American Standard, New American Standard, Living Bible, Webster's Bible, etc., etc. If I wanted to do my own translation, nobody could stop me.

4. Would we bring back some of the punishments prescribed in the Bible? Stoning people? Burning people? Could parents kill their children for being disrespectful?

5. The Bible has been used to justify some of the worst garbage people have pulled on each other. People on both sides of the slavery issue could quote the Bible to back up their position. White supremacists can find Bible passages that they interpret to say they have the right to kill people like me on sight. Oppression of women can be justified with Bible passages. Would the law be written so that this kind of stuff could be interpreted form it?

6. When Gutenberg came up with the printing press, the first book printed was a version of the Bible. The Church at that time went nuts. Bibles before had to be copied by hand, and only the very wealthy or the Church could afford them. If Bibles could be mass produced, it meant common people could get their own and not have to rely on what the religious leaders said was in the Bible. Isn't this something like what we hear from Falwell and Robertson on their TV shows when they harp on how much they need your donation so they can get the word--their word, or their interpretation--out to people who could just read the Bible themselves? Are religious leaders who want to tell people what to do through the law of the land any better than those old leaders who preferred an illiterate following that followed their every command?

I have more questions, but you get the idea. (I do wonder one more thing: if Jerry Falwell had his say, would we have had Congressional probes into whether or not the TeleTubby Tinky Winky is gay? And if he/she/it/whatever turned out to be gay, what would be the Bible-based punishment for a fictional character)?

But one last thing. Falwell and Robertson already have someone in government who is running their agenda for them: John Ashcroft. Ashcroft is right out there using America's state of constitutional distraction to push some of the issues fundamentalists get the most worked up about. Among these are trying to take away a woman's right to choose, bar human embryo stem-cell research, challenging Oregon's assisted-suicide law and California's medical-marijuana initiative and other laws they don't like. States can pass whatever laws they want, or put them on the ballot for the people to vote on, but if Ashcroft says his God (and Jerry Falwell's, I think) doesn't like the law, he believes he has God's authority to step in and do something. Like the Taliban does. And I never hear Jerry Falwell speak out against any of it.