PREZ WILL TRY TO RALLY INVESTORS

New York Post ^ | Saturday, July 13, 2002 | By BRIAN BLOMQUIST

[JohnHuang2]

July 13, 2002 -- WASHINGTON - President Bush is planning a major economic speech on Monday to restore investor confidence, while his chief corporate crime fighter vowed yesterday to be aggressive in going after crooked execs.

At the White House, Bush met with his new corporate fraud task force - in a gathering that was hastily scheduled just yesterday morning - followed by an announcement that the president will lay out measures to shore up the economy on Monday in Alabama.

[steve50]

I think you're right Tom. New laws on future corruption aren't going to do it.
What Lay, Fastow, and the boys engaged in was a conspiracy to defraud, and is indictable under any laws. If he refuses to prosecute these guys the House, Senate, and re-election are chances are gone.

[Biblebelter]

There is a subtext here. Many Americans understand the subtext. How can politicians and the federal government clean up corporate America? The government can give instructions on solid accounting practices? What does any of the buffoons in the Senate know about business? What does any of them want to know about business? They know that business has given them a lot of contributions and they have looked the other way while Warren Buffet has called those companies which use EBITDA methods of presenting profit-loss statements as crooks.

The great problem is that both political parties have no will to end any corruption. Both parties knew there was massive vote fraud and accounting error in the political system before the 2000 election. The Democrats did not care that many of their votes were going unaccounted in areas such as Cook County. The Dems had such a margin of victory there any way that they were willing to let those votes be thrown away because they were going to win there anyway. Republicans do not have a confrontational bone in their party, and sadly the Democrats give them a lot of corruption to confront.

Neither political party has made it an issue to correct the fraud and waste created by government accounting systems which are a total failure. What about the billions unaccounted for in the Department of Agriculture? Both parties rewarded the Department which has the worst record of accounting with an obscenely bloated farm bill. This in light of the fact that a few years back both parties trumpeted a new direction away from past abuses with the Freedom of to Farm Bill.

The chances of the markets cleaning themselves up without Washington's help is just as great as it is with its help. This is so because it is in Wall Street's self-interest to do so. But are the chances that we will see government clean itself up, so that the INS actually has a computer system that is effective or that the Department of Agriculture will actually be able to account for the taxpayer monies which pass through its office?

I have some contempt for the thieves on Wall Street who bilked investors, but that contempt is not as great as it for the politicians who do not have a clue or the will to clean up their own house and now are seeking to exploit the victims of corporate crime and corruption to serve their own political ends.

[AAABEST]

RE your #12

It seems my online Uncle has brightened up my day once again.

WTF are we supposed to do about all this? I'm truly lost. The Republicans suck. The Dems suck 10 times worse. The large "L" Libertarians have a platform only an idiot could love and all of the third parties are useless and ineffective.

All I know is that things are worse than ever and I'm seriously pissed. We're all standing around in a daze watching our country get flushed down the toilet. I'm starting to think that Americans are going to have to learn things the hard way, as we've been given the chance to learn the easy way and pissed it away via ignorance and selfishness.

All of this out of control spending and contempt for the Constitution is an utter disaster. It really is.

[TLBSHOW]

Tax breaks and cuts are the only way to bringing the economy up right away. I mean stop witholding taxes effective last week for the next 6 weeks to start with. There are so many more ways using taxes to get the economy roaring.

Executive order if needed. Because the rats start to cry.
It would show the people The President means business and the democrats want to stop business.

[Jimmy Valentine's brother]

Very thoughtful, unlike the following

In the nineties everyone had a piece of the action but no one took the time to reseach what they were buying nor paid attention once they bought it. We new in our gut that something wasn't quite right in Silicon Valley but what the heck. Now we're having a shake out after the greatest bull market in history.

I do agree that some people need to be prosecuted and that includes members of the board of directors who have fiduciary responsibility to the stockholders. We don't need more laws. We don't need class warfare. I recall that the Great Socialist, FDR, wanted to limit salaries to $25K. We do need stockholders paying attention to what companies are doing with their money. Damn-there's that personal responsibility thing again.

[Right_in_Virginia]

"Use the speech to announce some indictments. That'll help."

True. But, the president also has to address the national debt and stress the positives of the current economy.,,specifically WHAT the good news is and WHY it's good news.

And, the president needs to rally the nation to be positive, steady and to stay the course as he has he has done with the war. ---The president has to find a tag similar to: "We will not tire, we will not falter and we will not fail" to shore up citizen and investor confidence.

[TomGuy]

If these corporate scandals continue for at least another year and the economy/stock market is still in the tank, there could be fertile ground for a viable third party candidate.

This scandal is affecting both Democrats and Republicans. Neither can take the high road and point fingers at the other. Both camps took corporate contributions--in large amounts.

Thus, a clean slate could be appealing to the voting public. A viable third party can only exist if it has more than the single-issues most of the current/previous "professional presidential runners" have. A Buchanan or Nadar or JJackson or Sharpton, etc., exist primarily because of one or two major issues they've spouted over the years. If a candidate/party would come forth with a candidate who has significant qualities beyond a single issue or two, they could have a good chance. Remember Perot was ahead-or-even with Bush and Clinton in the early part of 1991--until the aliens (no, not from Mexico, from Alpha Centauri) landed in his front lawn.

The general public is getting pretty tired of all the rhetoric and fingerpointing in Washington. "You're bad...you're badder..." That blather has gone on for years, and neither party is pristine. The American people deserve better.

[Uncle Bill]

"All of this out of control spending and contempt for the Constitution is an utter disaster."

I agree. It isn't going to get fixed short of a miracle. The Republic is falling. The American people want socialism. They will get it. Just take social security, medicare, defense spending and interest on the debt. That alone will crush us, easily. Add all the other socialist spending and it simply is heaping the weight of debt to expedite the collapse. I'm not aware of any nation that has reversed this course, and when you consider our size, we can just shake our heads. By the way, I'm not sure if you've seen the following, but the debt the elite want Americans to believe isn't even close to the true figure.

How Big Is the Government's Debt?
"When these obligations are combined with the debt held by the public, the total burden equals $33.1 trillion, or 10 times the official debt measure. This "total debt" is more than three times the size of the nation's total output in 2001, and amounts to $116,381 for every man, woman and child in America."

Consider Free Republic. The vast majority here seem content with socialism in high gear. Think how bad it is across the country. Socialism is slavery and death.

I mean, here's where were at:

Bush Wants Food Stamps For Illegal Aliens

[jrlc]

By the time the RATS get finished passing anti-business legislation in the Senate, business will be twice as hard to do profitably. Then the communists like HELLary can pump their welfare clients -- boosting RAT voting in Newark, for example, in an attempt to capture a Senate seat for the RATS -- arguing for more welfare spending to stimulate the economy. What a sad old refrain. The NASDAQ tanked after the dot/com Klintoon bubble burst. Now it's the DOW's turn to get the Klintoon hype gone from the telecoms and other fake businesses promoted during his corrupt administration. After all, if a BJ isn't sex, then a corporate loss can be booked as an expense, right? Better to have all this fall out now so the economy is on an uptick in November.

[rintense]

I'm going to take a more cynical view here. This whole cook the books problem is actually a Godsend for the Democrats. Why? Because even with President Bush's corporate responsibility initiative, we will continue to see more and more companies reveal that their earnings have been overstated, etc. Bush can not control that. And all the punishment in the world for these corporate liars won't bolster a market that is solely running on estimated earnings in the first place.

With every new instance of fraud, more shocks happen to Wall Street. And with each one of those shocks comes a little chunk out of consumer confidence- which means the economy will continue to take a hit through the election. And who do you think is going to try and spin this for all it's worth? The Democrats.

My knowledge in the finance area is pretty limited. So I want to ask freepers a question. Considerig the scenario above, what do you think is the best strategy for the Bush adminstration to combat the likely book-cooking revelations, and to bolster consumer confidence? A tax cut would be nice, but that simply won't help a consumer's perception of the market or the economy.

[B4Ranch]

It's not the debt that worries me, it's the constant hidden fees and interest.

[Libloather]

Use the speech to announce some indictments. That'll help.

Bookkeeping Errors Contribute to $17.3 Billion Federal Loss
© Copyright 2002 - AccountingWEB US
29th May 2002

Making Enron's $600 million restated financial statements look like a mistake in a child's allowance, the U.S. Treasury has admitted an accounting error and a resulting loss of $17.3 billion.

The admission appeared in the 2001 Financial Report of the United States Government issued earlier this spring and accompanied by the statement by the General Accounting Office (GAO) that once again, for the fifth consecutive year, the GAO is "unable to express an opinion on the consolidated financial statements because of certain material weaknesses in internal control and accounting and reporting issues."

Treasury Secretary Paul O'Neill stated in the report, "I believe that the American people deserve the highest standards of accountability and professionalism from their Government and I will not rest until we achieve them."

The report indicates that three factors contributed to the error: inaccurate bookkeeping by government agencies, errors in reporting contracts among government agencies, and timing problems associated with reporting costs and revenues.

For further information: http://www.fms.treas.gov/cfs/01frusg/01frusg.pdf

[Biblebelter]

Excellent find. Paul O'Neill said the right things, but words from the mouth of a bureaucrat are such hollow things.

[defenderSD]

"Eliminate The Capital Gains Tax."

Also eliminate double taxation of dividend payments by making dividends tax deductable to corporations. This would eliminate the major tax advantage of debt financing over equity financing. Everybody says there's too much debt in our financial system, but Congress never wants to take this simple step to raise dividend payments, encourage equity investments, and stabilize the stock market.

[cgbg]

The fundamental business of the country, that is the production and distribution of commodities, is on a sound and prosperous basis." -Stated the day after the Stock Market crashed, 1929

Hopefully W's speechwriters won't use that famous Herbert Hoover quote. ;-)

But is sure does sound like what a lot of economists and Wall Street analysts are saying these days...

[Hank Rearden]

This president is an economic illiterate, which will impede his ability to impress anybody when talking about the economy.

Only an idiot would put steel tariffs in place and restore the monstrous Welfare Farmer program. Pinheads like that aren't going to turn around an economy with a stupid speech.

Wimp II is more ethical than Sh%*head Clinton, but he's still a dolt - as demonstrated by his actions.

[Mulder]

This president is an economic illiterate, which will impede his ability to impress anybody when talking about the economy.

I've come to the same conclusion. Unlike Reagan, he is uncapable of presenting a clear economic agenda without checking with his pollsters and advisors. The word "puppet" comes to mind here.

Having said that, actions do speak louder than words, so I'm hoping to see him propose a 50% reduction in the capital gains tax, a 30% marginal tax cut for the producers in society, regulation reform, and a downsizing of unconstitutional government agencies. Effective ASAP, not "phased in" over a decade. That would reawaken our economy.

But what we'll probably see is him propose to appoint a commission on corporate fraud, and tell us how great the economy is. If he does propose a tax cut, it will likely be along the lines of some socialistic tax "rebate" for the parasitic lower classes.

I hope I'm wrong here, but I seriously doubt it.

[Mulder]

Paul O'Neill said the right things, but words from the mouth of a bureaucrat are such hollow things.

I wished he had appointed Bill Archer to Treasury.

[Brimack34]

Sounds to me most people here are looking for Government to bail them out again. Blame Bush if it helps you sleep at night. I will blame congress for the big spending, we do hold congress. But I will not look for Bush to bail me out.
The only way a speech would work if some people here and the Demorats do not undermind everything he say's.

[Donald Stone]

Saturday, July 13
Accent | Business | Local News
Main News | Opinion | Sports

Washington's black ink turns red

By Bob Deans, Palm Beach Post Washington Bureau
Saturday, July 13, 2002

WASHINGTON -- The White House said Friday the federal government is
on track to spend $165 billion more than it takes in this year.

That would be the largest one-year swing ever from black ink to red and the
biggest budget deficit in seven years -- $59 billion more than President Bush
forecast just five months ago.

The administration blamed the plunging stock market for most of the
deterioration in the $2.1 trillion budget, citing sharp reductions in shareholder
profits and the taxes individuals pay on them.

"We've had a real whipsaw that was hard, I think, for anybody to foresee in
advance," White House budget czar Mitchell Daniels told reporters Friday in
a preview of a full midyear budget assessment his office plans to release on
Monday.

The numbers will show the federal government $165 billion in the red for the
budget year that ends Sept. 30, Daniels said. That compares with a budget
surplus last year of $127 billion and a surplus of $236.4 billion the year before
that.

Daniels said those strong surplus numbers were caused in large part by the
capital gains taxes individuals paid on stock market earnings. Those taxes
were a big reason why federal revenues climbed nearly 40 percent between
1995 and 2000, he said.

"That was more clearly tied to the stock market run-up than we knew at the
time," said Daniels, director of the White House Office of Management and
Budget. "Now we are seeing the mirror effect."

Now, when individuals sell off stocks, they often have little or no profits upon
which to pay taxes. Worse, from a tax revenue perspective, when they sell at
a loss, those losses are deducted, up to a point, from taxable income.

The result: federal revenues from such taxes are projected to tumble this year
to about $50 billion -- about $121 billion less than they brought in last year,
said Daniels.

Just last February, when Bush presented his 2003 budget proposals to
Congress, he projected a budget deficit this year of $106 billion.

At the time, the White House attributed the deficit to three things: an
economic slowdown; new spending to help deal with the damage of the Sept.
11 attacks, wage a global war on terror and beef up homeland defense; and
the effects of last year's tax cuts -- amounting to $1.3 trillion over ten years.

The economy, though, has done better than Bush predicted. It's now on track
to grow at about 2.6 percent this year, according to numbers Daniels released
Friday. That's about 2 percentage points above February's projections.

The economy grew at a lusty 6.1 percent annual rate during the first three
months of this year, though there are signs it has cooled considerably since
then. On Friday, there was good economic news: retail sales gained 1.1
percent in June, owing chiefly to consumer spending on clothing and
automobiles, a turnaround from a 1.1 percent decrease in May, the
Commerce Department reported.

Daniels said the economy will likely grow at a 3.7 percent rate next year,
improving corporate profits and bringing the deficit down to $109 billion. He
said the federal budget could be back in the black -- with a $53 billion surplus
-- by 2005, but only if Congress holds down annual spending growth to the 4
percent Bush has proposed.

In recent years, he said, spending has increased by an average of 7 percent a
year. If that continues, he said, the government could compile $2 trillion in
deficits over the coming decade.