Enron's energy trading unit goes to UBS
Michael, In bankruptcy management can run the business and engage in ordinary course transactions but they now have to shift their fiduciary duty to include creditors, not just shareholders. Certain transactions require the approval of the bankruptcy judge. The management has 180 days to develop a reorganization plan for the overall future of the company that must be approved by the creditors in a rathe complicated voting scheme. From the following story it seems clear that the expectation is that UBS will generate some future cash flow back to Enron through its independent control and management of the trading operation, so it would likely have been viewed favorably by the court and the creditors. An order approving the deal was probably issued by the bankruptcy court and is probably available on the FindLaw Enron site. Steve Feb. 11, 2002, 11:55PM Former traders for Enron start work under UBS By TOM FOWLER Copyright 2002 Houston Chronicle The fifth and sixth floors of Enron Corp.'s new downtown tower were back in action on Monday as about 650 former EnronOnline traders began operating UBSWenergy.com. UBSWenergy.com, created using the Internet-based trading software and much of the people power of the former EnronOnline, posted prices for four natural gas contracts and two electricity contracts. It was a modest start compared with its predecessor, which at its peak offered more than 1,700 different products, but it was the first step in what may become a source of payment for Enron's hundreds of creditors. While transactions are backed by the Swiss bank's investment-grade credit rating, energy buyers and sellers say it is too soon to know whether UBS Warburg Energy, owned by UBS Warburg AG, can revive a trading business that once generated most of Enron's profit before its Dec. 2 bankruptcy filing. A lot of people are still getting documents in place to set up trading accounts with UBS, said Thomas Padron, head of natural gas trading at energy brokerage GFI Group in New York. He expected it to take two to four weeks before UBS Warburg's new venture's chances for success are known. About 650 former Enron traders and support staff are running the site, which is headed by former Enron President and Chief Operating Officer Greg Whalley. Enron's trading business was the company's largest revenue generator, accounting for about 80 percent of the firm's profits. With 800 trading desks around the world, Enron once dominated the oil, natural gas and electric power markets, while also swapping a host of other commodities. In 2000, the system conducted as many as 548,000 trades, valued at more than $330 billion, according to Enron. Former Enron Chief Executive Officer Ken Lay once called EnronOnline one of the three most significant changes to the energy industry in the past 20 years. When it went live in 1999, it brought a new level of price transparency, liquidity and efficiency to energy and other commodities, Lay said. I believe it will be an enduring Internet success story, he said. But Enron's collapse last fall led customers to flee, helping to bring on the resulting bankruptcy filing in early December. Even in bankruptcy, the company considered the business unit to be valuable, and paid millions to its top employees to stay with the unit. John Lavorato, president and CEO of Enron Americas, received a $5 million retention bonus, while Louise Kitchen, Enron's former head natural-gas trader in London, received $2 million. Both have been hired by UBSWenergy.com. In bankruptcy, Enron tried to lure bidders to take a stake in the business to operate it as a joint venture and begin generating cash for Enron again. Negotiations with two parties, UBS Warburg and Citigroup, ran almost nonstop for two days in January before UBS Warburg was chosen. The deal was not what many expected, however. Instead of paying cash for a stake in the business, UBS Warburg will pay 33 percent of the new trading business' before-tax profits to Enron for the first two years, with higher payments possible later if UBS Warburg buys Enron out. UBS Warburg assumed none of Enron's liabilities or past trading positions, but did agree to pay $5 million of the $11 million in retention bonuses paid to top traders. UBSWenergy.com has its work cut out for it. Following Enron's collapse, many traders took their business to the Intercontinental Exchange, an Atlanta-based Web site that's owned by 13 energy-trading firms, such as BP, Morgan Stanley Dean Witter Co. and American Electric Power Co. Other traders, who lost money because of Enron's collapse, said they wouldn't return until UBS Warburg replaces the former Enron managers. Michael Barbis, an analyst with Fulcrum Global Partners in New York, said the new organization faces a tough challenge to succeed, given its association with Enron. No one expects them to be what they were, Barbis said. It will be a tougher time for them to get going, is my bet. The Associated
Wishful thinking
Wishful thinking by Justin Schwartz 11 February 2002 18:12 UTC Charles' headline implies that I wish that Marxism were dead, and that is why I hold this false belief. In fact I regret that it is dead. so if the belief is false, my adherence to it must have another explanation. Charles says that because Marxsim is true, itw ill be effective. That is a fallacy. Truth is neither necessary nor sufficient for efficacy. Moreover there is the fact that Marxism is discredited; and don't start on the electoral success of the former and remaining CPs in Russia and Eastern Europe, which are not Marxist or revolutionary in any sense. It's time to wake up, guys and gals. Godot aint coming (back). we have blaze our own trails, carry what we can from the wreck. jks ^^ CB: No, no, Justin, I'm the one wishing in this thread. I'm putting forth a utopian socialism. Engels has turned into his opposite. But seriously, I only meant that because Marxism is true, it has a tendency to fulfill itself. But there can be countervailing influences to this tendency. How this struggle will come out in the end is difficult to say. But I don't think you can count out a revival of Marxism, because its truths are confirmed everyday, say in Argentina. I mean the people in Argentina may be foreclosed from becoming Marxists or communists en masse today because of the specific anti-communist institutions that capitalism has built up in response to the SU and the first wave of socialist revolutions. But what about an Argentine depression in the next generation , when anti-communist institutions have faded, and people have no anti-communist trends like today. Marxism will seem like an amazinginly accurate description of what is happening to them. So, it is hard to count out Marxist revival forever , as you do. Also, I would say that people looking at history with objective eyes will not say that Marxism is discredited at all, but confirmed more than all other historical theories. This can only increase the chances that there will grow mass enthusiasm for it again in the future.
KFC outlets total 600 in China
The Times of India MONDAY, FEBRUARY 11, 2002 KFC outlets total 600 in China PTI BEIJING: The US-based fast food giant, Kentucky Fried Chicken (KFC), which has opened 600 outlets in China, plans to open 120 more branches this year, a senior company executive has said. KFC opened for business an outlet in north west China's Gansu province this week, bringing the number of KFC branches in the country to 600. David Novak, president and chief executive officer of the Tricon Global Restaurants Incorporation (TGRI), who owns a number of world famous fast-food stores like KFC, Pizza Hut and Taco Bell, said some 120 more new KFC branches will open this year in China and Pizza Hut will open at least 25 new branches. With the implementation of China's west development strategy, northwestern region will become one of the fastest developing area in the country, Novak said. He believes that drawn by large profits, more foreign-invested companies will move there. During the past four months, 100 KFC branches have been launched in China with their enlarged business area totalling 35,000 square metres. In 2001, sales made by both KFC and the Pizza Hut in China stood around $651 million. As China has become the second largest fast food market after the United States, Novak says that the TGRI has planned to beef up its annual investment here by 25 per cent. Copyright © 2001 Times Internet Limited. All rights reserved.
footenote: Wishful thinking
In the heyday of Keynesian, Hayek was a _young_ fossil; when he was an old fossil, he triumphed. jks Over Keynes? I think not. An Austrian critique of Soviet-style central planning is much more defensible than an Austrian critique of Keynesian demand management. I was not aware that your Austrianism reached such heights, jks! It's a joke, DD. As far as capitalist economies go, I am, as I have said here recently, a Robinsonian-Kalecskian, that is, a left Keynesian. jks How would you explain the recent conniptions in the NASDAQ in a manner consistent with Austrian theory? The best I've seen the Austrians do seems to be to do utter violence to their own concept of malinvestment. Well, Austians would say that it'--what did O'Neill say?--the genius of capitalism. _ Send and receive Hotmail on your mobile device: http://mobile.msn.com
Re: TRIUMPH OF THE MARX METHOD PART 1
2/Triumph of the method of Marx General Overview part 1 Melvin P. The triumph of what is fundamentally an intellectual movement proceeding from the assumptions and conclusions of Karl Marx and Frederick Engels is so absolute in its resounding victory that no one in modern society can approach an analysis of society without using the methodology pioneered by these men. Our free market economy is referred to as capitalism or the capitalist mode of production due to Karl Marx, who popularized and coined the terms. It was none other than Marx who coined the concept of relations of production and mode of production as fundamental categories of material relations in society. Relations of production embody property relations or the relations of segments of society to property; group relations in a specific system of production and the relations of people to one another, identified and clarified by the existing technological application. Marx gave the world this conception of society and the world accepts it as a given outside the man who gave. The universal triumph of the method of Marx is so complete that the individual who comes of age and enters intellectual engagement encounters various modes of expressions coined by Marx. The gigantic hand of Marx has reshaped the form and structure of the world lexicon. As a method of approach one encounter the Marx dialectic - as distinct from the philosophic form articulated by Hegel, as Marxism due to the previously existing body of literature using axioms created or attributed to Marx. It was of course Marx who taught the workers - and his self professed purpose was education of the workers and his material activity towards this purpose was to join and form associations on behalf of laboring humanity, an approach that seeks not to explain society, but to unravel its constituent parts on the basis of the internally connected infinite interactive material relations of reality and discern fundamentality. From Marx earliest days of organizing what can be called an intellectual expression of his conception of the working class movement, or in the language of the Marxist movement an subjective expression of the objective process, scores of distinguished intellectual have rallied to his banner. From time to time with the method of Marx is confused with the ideological mode of expression that articulates the method. Fortunately, an intimate component of the methodology of Marx establishes a conceptual framework, which draws a sharp distinction between ideological forms and expressions, modes of expressions and the internally cohesive movement logic of that which is being expressed. Ideological modes of conception are prehistoric by definition, predating the emergence of society defined as the unity of the productive forces and social relations of production, which together are referred to as the mode of production in man material life. Frederick Engels refers to this prehistoric mode of ideological expression as ancient bunk as much as its existence remains un-deciphered to a large extent. Nevertheless, one would not resist - as methodology, an attempt to separate an ideological mode of expression from the act or process of cognitive functioning. Sovietism as an ism is an ideological mode of expression as distinct from a specific method of inquiry into the law system that governs the self-movement of matter. Sovietism as an ism was an ideological current that more than less articulated or sought to articulate the development and evolution of the industrial production of commodities on a basis of public property relations, or the absence of private owners of the industrial infrastructure and all its diverse components. The men and women who occupied important positions in the state system that sought to protect those property relations manifested a material commitment to teach its society and indeed a vast segment of the world's population the doctrine of Marx and through this doctrine the method of approach peculiar to Marx. What is exceptionally interesting as a special field of inquiry is the apparent connection of the material elements of life that tend to bound and bind ideological expressions to material factors in opposition to the ceaseless striving of the mind to overcome or unravel its own modes of expression. The contribution made by the educational apparatus of the Soviet State in penetrating major areas of the world market and literally publishing a diverse expression of the method of Marx remains difficult to estimate and historic in its outreach. For various reasons, which cannot be abstracted from the quantitative developments in the historic expansion of the system of capitalist commodity production, Marx doctrine or rather method of inquiry called materialist dialectics has remained the focus of sharp dispute as an analytical tool. For purposes of teaching their population the method
Re: Triumph of Marx method/2
2/Triumph of the method of Marx General Overview part 2 Melvin P. The place of antagonism in contradiction or rather the development of contradiction as movement in antagonism has been the cliff from which man Marxist theorist leaped to their theoretical death. Under our current conditions where there exist no more reforms left in capital, and new qualitative features have arisen in the production process, this movement in antagonism can be more easily witnessed and articulated. After all noting ventured, nothing gained. The contradiction of any process is resolved on the basis of the development of the contradiction itself, while its manifestation - form is conditioned by the environment surrounding its field of operation. The development of the singularity (contradiction) identified as man and woman means generations development (babies) and inheritance. In respects to this singularity the external factors are all the things outside, but interactive with the life creation process. The successive generations progression is not an antagonistic development. The premise of development of the singularity identified as man and women can be isolated as - not simply a penis and vagina, but rather, a genetic disposition whose polarity - unity and opposition, is the basis for human life. Development takes place on the basis of the preservation of the genetic premise, its intermingling and synthesis. Antagonism as a theoretical construct means that in the development of a singularity - contradiction, at every stage of its evolution and partial resolution only the premises for its resolution are preserved, ripened and further developed. In a contradiction that is antagonistic, development can never past beyond the stages of its partial resolution. What is required and distinguish antagonism, as a form of development/self movement is the final abolition of a previous polarity by abolishing one of the poles or rather conditions of existence of a previously dominate pole. Periodic crisis of capitalist means of production are a violent form in which the contradictions of a given cycle of capitalist reproduction find resolution, but in relations to private property relations as a whole - totality, these crises emerge as landmarks of the further intensification of the contradiction whose general mode of expression is identified as labor and capital. Antagonistic contradictions are resolved by the kind of leap - transition, in which the internal opposites, - labor and capital, emerge as relatively independent opposites, external to each other, and begins a developmental process, wherein the abolition of the formerly dominant pole - capital, must take place in order for labor to further developed upon the basis of its own internal qualitatively acquired distinct features. In this development of labor, which was once dominated by the power of capital - its previous polar opposite, now becomes dominant and preserves a number of modes of expression from its previous developmental phase, but it now capable of developing further because its polar opposite has been shattered. In contradictions that are not antagonistic - or rather lack do not move in antagonistic as process development, the development or self movement of the contradiction signifies not only the growth of the forces making for its final resolution, but each new step in the development of the contradiction is at the same time also its partial resolution. Synthesis takes place not on the basis of the separation of poles - externalization and the separations of the modes of expression from itself, but as a partial merging and break down of the mode of expression and the achievement of a new unity. The antagonistic character (short speak for movement as antagonism) of the contradiction between labor and capital is expressed in a numbers of contradictions within capitalist production relations. We are familiar with the contradiction expressed in the market, and called the crises of overproduction. Capitalist property relations create a market mechanism based not simple on exchange, but exchange on the basis of profitability for the ownership of means of production. Market exchange periodically collapses - enters a crisis and crisis is defined as the interruption of a process, because the means of production create more commodities than can be consumed by labor on the basis of the cost/price mode and production slows down and collapses until the mass of commodities can be sold, destroyed or dispensed with. This contradiction cannot pass beyond the stages of its partial resolution and its resolution exist in its polar opposite - labor, achieving dominance and abolishing the inherit limitations of modes of operation peculiar to capitalist production and capitalist market exchange. Thus, the contradiction within capitalist commodity production, continues to reemerge in cycles until the
A Future for Marxism? (Was: Wishful thinking)
A Future for Marxism? (Was: Wishful thinking) by Justin Schwartz 12 February 2002 04:30 UTC The argument is historical, and is available to anyone who has eyes in his head. In the era of 2nd International, Marxism was a powerful force among Western European workers. It bounced back, some, after WWII. Today in Western Europe, the PCI is gone, the PFC is a decaying rump, the KPD is many generations dead (and the PDS is a left- S-D formation largely confined to the East). Marxism never caught on in America or Canada, but it was a minor force to be reckoned with up through the start of the First Cold War. The 57 varieties of Trotskyism and Maoism never went anywhere. In the ex-Bloc countries, the Russian Revolution is in ruins, the ex-CPs are at best centrist (and the CPRF is an ugly red-brown Stalinofascist deformity); in the third world, Marxism in is in full rereat. China is officially Marxist but in fact pragmatically procapitalist and ruled by an authoritarian elite committed only to power. Vietnam is following China. N. Korea is a wierd backwater. Only Cuba retains a trace of traditional Marxist elan. Marxist-identified revolutionary movements are no longer vaguards by collections of narcothugs like the remnants of the Shining Path and FARC. There are no mass self-identified Marxist working class movements anywhere, Nor do any show any signs of emerging. CB: Assume all of the above for the sake of argument, why won't future generations, subject to the basic processes of capitalism, not exposed to the anti-communist militarism and propaganda of the current generation become enthusiastic again about socialism as the solution to the problems of capitalism ? And won't Marx's writing and that of many other Marxists fit their reality and be likely attractive to them ? The second thing is that one way that Marxism will never revive is that if we in the smaller number of current Marxists accept what you say , and do not try to pass it on to the future generations. So, your position could become a self-fulfilling prophecy as could our enthusiasm for Marxism become contrariwise important in keeping its theory alive for the next group of practitioners. Justin:Au contraire. I have expressly disavowed that here and elsewhere. I don't believe in historical inevitability. I have plainly said that it is possible, just extremely unlikely, that the situation may reverse. ^^^ CB: What is your specific reasoning that it is extremely unlikely that the situation may reverse ? So many other liberation ideologies in history have had longer histories with ebbs and flows, why are you sure that Marxism cannot survive a period of relative failure when so many others have ? ^^
Re: Wishful thinking
CB: No, no, Justin, I'm the one wishing in this thread. I'm putting forth a utopian socialism. Engels has turned into his opposite. Charles, I didn't know you had it in you. But seriously, I only meant that because Marxism is true, it has a tendency to fulfill itself. But there can be countervailing influences to this tendency. How this struggle will come out in the end is difficult to say. But I don't think you can count out a revival of Marxism, because its truths are confirmed everyday, say in Argentina. I mean the people in Argentina may be foreclosed from becoming Marxists or communists en masse today because of the specific anti-communist institutions that capitalism has built up in response to the SU and the first wave of socialist revolutions. But what about an Argentine depression in the next generation , when anti-communist institutions have faded, and people have no anti-communist trends like today. Didn't someone say something about what happens when history repeats itself the second time? Marxism will seem like an amazinginly accurate description of what is happening to them. So, it is hard to count out Marxist revival forever , as you do. I think what is novel in my position is that I do not deny the substantial truth content of historical materialism; but the truth may not be enough. Someone also said something about the philosophers merely interpreting the world in various way. jks _ MSN Photos is the easiest way to share and print your photos: http://photos.msn.com/support/worldwide.aspx
Re:Confessions of a Bourgeois Politician/Banker
The New York Review of Books February 28, 2002 Feature The Betrayal of Capitalism By Felix G. Rohatyn During my nearly four years as ambassador to France I frequently gave a speech I called Popular Capitalism in America to audiences throughout France. This is a subject of intense interest to the French and to most other Europeans, who envy us our high rates of growth and low unemployment but who often believe that the price we pay for these benefits is an inadequate social safety net, a tolerance for speculation, and unacceptable inequality in wealth and income. They also see the American system as one that inflicts high levels of poverty and unemployment on developing countries by the harsh stabilization measures required by the IMF and other Western-directed financial institutions. I made this speech to dispel some of these notions and to encourage reforms in European countries in matters such as taxes, investment, and employment. These, I argued, would, to our mutual benefit, align our systems more closely. In doing so, I defended our economic model as one that could deliver more jobs, and more wealth, to a higher proportion of citizens than any other system so far invented. A major component of this system is its ability to include increasing numbers of working Americans in the ownership of US companies through IRAs, pension funds, broad-based stock options, and other vehicles for investment and savings. I agreed with, and cited, Federal Reserve chairman Alan Greenspan's statement that modern market forces must be coupled with advanced financial regulatory systems, a sophisticated legal architecture, and a culture supportive of the rule of law. After forty years on Wall Street I had no doubt that, despite occasional glitches, our economy met Greenspan's requirements. However, as I regularly traveled back to America between 1997 and 2001 there were developments in our financial system that deeply troubled me. The increase in speculative behavior in the stock markets was astonishing. In 1998, as a result of reckless speculation by its managers, the giant hedge fund Long Term Capital Management went bankrupt and, in doing so, threatened the financial system itself. The New York Federal Reserve organized a group of banks and investment houses to rescue the company at a cost of several billion dollars. The sharp rise in dot-com stocks came soon after, together with relentless publicity campaigns to push the markets higher and higher. TV ads of on-line brokers urged everybody to buy stocks and trade them day by day. So-called independent analysts made fantastic claims about their favorite stocks in hopes of generating investment-banking business for their firms. These claims were often supported by creative accounting concepts such as pro forma earnings—a management-created fiction intended to show strong results by excluding a variety of charges and losses and one that was implicitly approved by supposedly independent auditors. A large part of the stock market was becoming a branch of show business, and it was driving the economy instead of the other way around. Full: http://www.nybooks.com/articles/15140 Apparently, he see the incongruity - contradiction and intensifying polarization, within all modes of expression of capitalist commodity production, along with rest of the world. However, class have self interest and proclaiming that a current existing system of production is better than all previously existing systems regulated to antiquity is hardly being theoretically insightful. Increasingly valueless production of profits. From boom to bust with ever growing layers of the world population pushed below the threshold of value. Never have so many suffer to enrich so few. Melvin P
Axis of patriarchal systems
Adding Bush's diminishing appointment of women to policy decision making governmental positions (article follows) to an all white, male agenda setting elite constant like, say, the Senate and House committee chairs -- Hollings, Byrd, Baucus, Tauzin, Thomas, Sensenbrenner, Stump, to name a few -- yields the preservation of our patriarchal system... ...AND A MISALLOCATION OF OUR PRECIOUS RESOURCES! Well, if you think this resource misallocation problem is just the inherent inefficiency of the public sector, the second article of this post deals with women and the more efficient private sector and objective/value-free scientific community...perhaps we will see a more efficient allocation under the leadership of our science patriarchs (oops science committee chairs) Sherwood Boehlert and Ernest Hollings. Diane The two related articles follow: Feb 11, 2002 WASHINGTON LOOKOUT Bush Appointments Include Fewer Women By Marie Tessier - WEnews correspondent (WOMENSENEWS)--Far fewer women are making policy decisions in President George W. Bush's administration than during the Clinton administration, a development some observers are calling a major step backwards for women's representation in government. Yet women hold an unprecedented number of power posts on the White House staff. Of the 402 Bush nominees so far whose positions require Senate confirmation, 102 are women, or about 25 percent, reports the Brookings Institution, a progressive Washington think tank. These numbers are down sharply from the 37 percent level in the first 512 Cabinet and sub-Cabinet appointments in the Clinton administration, as measured by a Knight Ridder news service analysis of comparable data in 1993. Bush had 510 positions open for appointments in his first year in office. He held over 42 Clinton appointees and another 63 positions are yet to be filled. What's disheartening to me is what [the data] reflects about the access of women to the White House, especially when we see who does get access--i.e., Enron, said Roselyn O'Connell, an Arizona Republican who is president of the bipartisan National Women's Political Caucus, which promotes women in elected office. We would be seeing different policies and priorities if there were women in more of these key positions. O'Connell is also co-chair of the 2001 Women's Appointments Project, a bipartisan coalition that has advocated representation of women in presidential administrations since 1976. The project has had few opportunities to put forward names and resumes in the current Bush administration, project officials said. The data underscore a trend first reported by Women's Enews last July. At the time, leaders of women's groups said they had been shut out of the appointment process for the first time since the Nixon presidency. Bush Hired Staff Includes Women in Top Jobs The Bush administration's initial round of appointments did include a number of high-profile women. The administration named three women to the Cabinet and two others in Cabinet-level positions, including Agriculture Secretary Ann Veneman; Interior Secretary Gale Norton; Labor Secretary Elaine Chao; Christine Todd Whitman, head of the Environmental Protection Agency; and National Security Adviser Condoleeza Rice. Chao is Asian American and Rice is African American, offering further diversity to Bush's advisors. Pat Carpenter, executive director of The WISH List, a pro-choice Republican political action committee for state and national women candidates, declined to comment on whether she is satisfied with the representation of women among the president's appointees. However, she said that she's impressed with the influence of women advisers like White House Communications Director Karen Hughes. I think he has a lot of bright, outstanding women in the administration, Carpenter said. Hughes is widely viewed as the most powerful woman ever to work officially in the White House. And while scholars said the percentage of women in top staff positions--as opposed to cabinet and sub-cabinet posts--has remained constant with the change in administration, many agree that more women have this president's ear than any previous commander in chief allowed in the past. Examples include Hughes, director of the Domestic Policy Council Margaret Spelling and Vice President Cheney's adviser Mary Matalin. These staff positions and that of National Security Adviser Rice are not subject to Senate confirmation and so do not show up in the Brookings data. It's true that there are fewer women throughout the administration, but if you were to look at how much 'face time' women advisers get with the president on a daily basis, then Bush can arguably claim the lead, said G. Calvin Mackenzie, a Brookings Institution visiting fellow who has developed and tracked appointee data going back to the Eisenhower administration. Burk: We Are Not Talking About a Special
Re: Axis of patriarchal systems
The Washington Post story refers to Brookings as a progressive Washington think tank. Next they'll be calling Heritage and CATO middle of the road think tanks. snip Of the 402 Bush nominees so far whose positions require Senate confirmation, 102 are women, or about 25 percent, reports the Brookings Institution, a progressive Washington think tank. These numbers are down sharply from the 37 percent level in the first 512 Cabinet and sub-Cabinet appointments in the Clinton administration, as measured by a Knight Ridder news service analysis of comparable data in 1993.
Re: Enron's energy trading unit goes to UBS
Steve, thanks for your answer. I knew that it was expected to produce revenue. My question is why the revenue went to Enron rather than the creditors. Why would they approve such an arrangement? Am I missing something. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Enron Creditors
Remember that the creditors do not necessarily want their principal back if there is a way to generate cash flow sufficient to meet interest payments. Of course, if the company is really going down the drain then a reorganization becomes necessary and creditors may be forced to accept new lower yield securities in order to avoid liquidation altogether. So the short answer is that the money UBS pays to Enron (if the trading operation generates sufficient returns) will be used to continue to pay creditors. Of course, while in bankruptcy there are various ways to delay paying out cash to creditors, but only if management gets the approval of the court and that really means in essence approval of the creditors. Keep in mind that Enron is now run by a new CEO (a restructuring expert who is out to please the creditors) and a new Board chairman who are, in effect, agents of the creditors not shareholders now. In 8 out of 10 public company bankruptcies, common shareholders never get their money back, but creditors can often do much better. Stephen F. Diamond School of Law Santa Clara University [EMAIL PROTECTED]
Re: Re: Re: Re: the profit rate recession
I had raised an objection to Fred's theory in 21987 and 99. I have found that Samuel Hollander makes a similar criticism of Marx in his classical Economics: The curve relating the profit rate and accumulation--whatever its slope--is continually shifting outward because of an increase in the purchasing power of profits, because the wants and greed for wealth increase, and because o f various institutional changes which ease the savings-investment process...With capital growing so rapidly, the notion of a supposedly falling growth rate of labour demand comes into question...But too rosy a picture of capitalistic development would not presumably have appealed to Marx. p. 397. Fred, You are probably correct, but here's what's been bothering me: Why should capitalism be more vulnerable to recessions and stagnation simply because the profit rate is falling or low? If the mass of capital advanced is growing, then the mass of surplus value which is extorted can grow even if the rate of profit falls. If the rate of capitalisation of surplus value grows along with the mass of surplus value, then the demand for labor can remain sufficiently strong to absorb population growth, no? A falling profit rate does not ipso facto mean stagnation if by stagnation you mean rising levels of real unemployment. Investment demand (i.e., investment in constant and variable capital) may be strong enough in fact to require that the valorization base be enlarged through immigration. Strong enough in fact that even with the immigration the valorization base may not large enough to sustain investment demand in additional constant and variable capital going forward. Why can't capital accumulation thus founder on a shortage of labor--or at least labor available for accumulation--even if the rate of profit is falling? Jim says that this crisis was not preceded by a rising OCC; I know Shaikh and you have questioned whether K/Y is a good proxy for the OCC (and Shaikh relies on the work of one Victor Perlo here). But the OCC need not have been rising for profitability expectations to have dimmed. Capitalists may not have thought a sufficiently large valorization base would be available for sustained accumulation. They then curtailed their investments, which has then multiplied out into a recession. That is, a perceived shortage of labor may have paradoxically led to an oversupply of labor! I am not suggesting a wage led profit squeeze--unit labor costs which of course is not a good proxy for s/v did nonethless seem stable before the recession-- but a shortage of labor thesis. In fact it may have been the overwork of the population that suggested that the valorization base was coming up insufficient vis a vis the rate of accumulation. I know this sounds absurd in a world of apparent overpopulation but the population that was well placed and suited for exploitation may have been coming up short in the eyes of capitalists, no? If a perceived shortage of exploitable labor was the trigger of retrenchment in investment, then the capitalist way out would be to increase the supply of exploitable labor, e.g., by opening the border with Mexico and improving the investment and labor codes abroad to allow more foreign direct investment that is profitable. The success of the WTO would then be a crucial political battle for the capitalist class. Rakesh
BLS Daily Report
BUREAU OF LABOR STATISTICS, DAILY REPORT, TUESDAY, FEBRUARY 12, 2002: U.S. chain store sales rose in the week that ended Saturday, a possible sign that the economy is edging its way out of recession, according to two reports out Tuesday. U.S. chain store sales rose 2.1 percent during the week ended Feb. 9, after a 0.7 percent drop the prior week, the Bank of Tokyo-Mitsubishi and UBS Warburg reported in their Weekly Chain Store Sales Snapshot. And Instinet Research's Redbook Retail Sales Average rose 0.9 percent in the week ended February 9 compared with the same period last month (Reuters, http://www.usatoday.com/money/retail/2002-02-12-retail-sales.htm). Laid-off employees are finding that they may not be able to get unemployment benefits because they've taken early retirement or severance payments, writes Stephanie Armour in USA Today (page 1B). It can be an unexpected blow to many of the 8.3 million Americans now unemployed. You can have your benefits reduced or be disqualified if you get money from early retirement. You can't double dip, says Jeffrey Wenger, an economist at the Economic Policy Institute, a nonprofit think tank in Washington. DUE OUT TOMORROW: Extended Mass Layoffs in Fourth Quarter 2001 application/ms-tnef
Oil, Sharon and the Exis of Evil
http://www.counterpunch.org/ February 11, 2002 Oil, Sharon and the Axis of Evil The Great Game By Uri Avnery Some weeks ago, something curious happened: Israel discovered that Iran is the Great Satan. It happened quite suddenly. There was no prior sensational news, no new discovery. As if by the order of a drill-sergeant, the whole Israeli phalanx changed direction. All the politicians, all the generals, all the enlisted media, with the usual complement of professors-for-hire, - all of them discovered overnight that Iran is the immediate, real and terrible danger. By wondrous coincidence, at exactly the same moment a ship was captured that, allegedly, carried Iranian arms to Arafat. And in Washington Shimon Peres, a man for all seasons and the servant of all masters, accosted every passing diplomat and told him stories about thousands of Iranian missiles that have been given to the Hizbullah. Yes, yes, Hizbullah (included by President Bush in the list of terrorist organizations) is receiving horrible arms from Iran (included by President Bush in the Axis of Evil) in order to threaten Israel, the darling of the Congress. Does this sound mad? Not at all. There is method in this madness. On the face of it, the matter is easy to explain. America is still in a state of fury after the Twin-Towers outrage. It has won a amazing victory in Afghanistan, hardly sacrificing a single American soldier. Now it stands, furious and drunk with victory, and does not know who to attack next. Iraq? North Korea? Somalia? The Sudan? President Bush cannot stop now, because such an immense concentration of might cannot be laid off. The more so, as Bin-Laden has not been killed. The economic situation has deteriorated, a giant scandal (Enron) is rocki ng Washington. The American public should not be left to ponder on this. So here comes the Israeli leadership and shouts from the roof-tops: Iran is the enemy! Iran must be attacked! Who has made that decision? When? How? And most importantly - Where? Clearly not in Jerusalem, but in Washington DC. An important component of the US administration has given Israel a sign: Start a massive political offensive in order to pressure the Congress, the media and American public opinion. Who are these people? And what is their interest? A wider explanation is needed. The most coveted resource on earth is the giant oil-field in the Caspian Sea region, that competes in scale with the riches of Saudi Arabia. In 2010 it is expected to yield 3.2 billion barrels of crude oil per day, in addition to 4850 billion cubic feet of natural gas per year. The United States is determined (a) to take possession of it, (b) to eliminate all potential competitors, (c) to safeguard the area politically and militarily, and (d) to clear a way from the oil-fields to the open sea. This campaign is being led by a group of oil people, to which the Bush family belongs. Together with the arms industry, this group got both George Bush senior and George Bush junior elected. The President is a simple person, his mental world is shallow and his pronouncements are primitive, bordering on caricature, like a second-rate Western. That is good for the masses. But his handlers are very sophisticated people indeed. It's they who guide the administration. The Twin Towers outrage made their job much easier. Osama Bin Laden did not comprehend that his actions serve American interests. If I were a believer in Conspiracy Theory, I would think that Bin Laden is an American agent. Not being one, I can only wonder at the coincidence. Bush's War on Terrorism constitutes a perfect pretext for the campaign planned by his handlers. Under the cover of this war, America has taken total control over the three small Muslim nations near the oil reserves: Turkmenistan, Uzbekistan and Kyrgyzstan. The whole region is now completely under American political-military domination. All potential competitors - including Russia and China - have been pushed out. For a long time, the Americans have been arguing among themselves about the best route for piping this oil to the open sea. Routes that may be under Russian influence have been eliminated. The 19th century, deadly British-Russian competition, then called the Great Game, is still going on between America and Russia. Until recently, the western route, leading to the Black Sea and Turkey, seemed most feasible, but the Americans did not like it very much, to say the least. Russia is much too near. The best route leads south, to the Indian Ocean. Iran was not even considered, since it is governed by Islamic fanatics. So there remained the alternative route: from the Caspian Sea, through Afghanistan and the western part of Pakistan (called Beluchistan), to the Indian Ocean. To this end, the Americans conducted, ever so quietly, negotiations with the Taliban regime. They bore no fruit. Then the War on Terrorism was started, the US
RE: A Future for Marxism?
It's important to note that Justin is referring below to issues of Marxism as influencing social movements. Though there's nothing wrong with Marxism-as-a-method as far as I can find, what really matters is the social movement. Justin writes: The argument [about the demise of Marxism] is historical, and is available to anyone who has eyes in his head. In the era of 2nd International, Marxism was a powerful force among Western European workers. It bounced back, some, after WWII. Today in Western Europe, the PCI is gone, the PFC is a decaying rump, the KPD is many generations dead (and the PDS is a left- S-D formation largely confined to the East). Marxism never caught on in America or Canada, but it was a minor force to be reckoned with up through the start of the First Cold War. The 57 varieties of Trotskyism and Maoism never went anywhere. In the ex-Bloc countries, the Russian Revolution is in ruins, the ex-CPs are at best centrist (and the CPRF is an ugly red-brown Stalinofascist deformity); in the third world, Marxism in is in full rereat. China is officially Marxist but in fact pragmatically ocapitalist and ruled by an authoritarian elite committed only to power. Vietnam is following China. N. Korea is a wierd backwater. Only Cuba retains a trace of traditional Marxist elan. Marxist-identified revolutionary movements are no longer vaguards by collections of narcothugs like the remnants of the Shining Path and FARC. There are no mass self-identified Marxist working class movements anywhere, Nor do any show any signs of emerging. I wasn't objecting to Justin's facts (and I won't quibble with the above, though I react viscerally to such patronizing rhetoric as to anyone who has eyes in his head). Rather, there's nothing inevitable about the continuation of the above. In fact, though we have to think long-term, there are opportunities. In simplistic terms: During the 20th century, there was a gigantic geographic split inside capitalism, which in turn produced a big split in anti-systemic movements. The geographic split was between the rich -- imperialist -- countries and the dominated countries. Marx had predicted that there would be two general processes generated by capitalist development, i.e., (1) the development of the working class movement in terms of consciousness and power; and (2) the prevalence of economic crises, immiseration, and the like. Though he was familiar with capitalism's geographic expansion and with the phenomenon of colonialism, Marx didn't theorize its impact on his predictions (though there was some speculation about the buying off of the labor aristocracy): the geographic split meant a split in capitalism's dynamics, with the working class movement growing mostly in the imperialist countries and the cost and impact of crises and immiseration hitting hardest in the dominated countries. The anti-systemic movements in the former ended up being infused with left-nationalism of the sort that fit circumstances there: mass working class movements took the form of social democracy or Eurocommunism, often with very anemic anti-imperialist dimensions. In the poor countries, on the other hand, nationalism was not based on mass working-class movements (with the obvious exception of then-somewhat-rich countries such as Argentina). Instead, it was a Gershenkronian-style statist effort by middle class nation-builders to defend their nations against imperialism and to promote economic development. (Strictly speaking, as Brenner points out, Gershenkron's theory about late developers using the state more than early ones was developed first by Bolsheviks.) So, in simple terms, we saw a split between social democracy and Stalinism. Each involved different aspects of the Marxian tradition, with little overlap. But capitalism continues to develop, as seen in the phrase globalization. Strictly speaking, what we're seeing is a new globalization, one that's different from the globalization before 1914 (and of course from the anti-globalization between 1914 or so and 1970 or so). All of the old nation-states are changing their roles under the guns of the new globalization and neo-liberalism. Though the states still have the important role of preserving class systems, they no longer serve the nationalist role as much as they used to. So the role of nationalist forces such as social democracy and Stalinism is much less. Instead, the emphasis among anti-systemic forces is more and more on internationalism (e.g., on uniting Mexican and US workers under NAFTA). There are still efforts to turn back the clock, as with radical Islam, but eventually these will fade, I believe. In this light, there is room in the future for new, more radical, anti-systemic movements based in the international working class. They may not embrace Marxism by name, but they'd have a lot of Marxist content, which is what matters. Obviously, the struggle against the emerging world state (led by and dominated by the US)
Labor confronts big capital at Qualcomm shareholders meeting
This makes great listening. It is part of an initiative by the AFL-CIO to get Enron directors off the boards of other companies. http://www.qualcomm.com/IR/ir36.html Stephen F. Diamond School of Law Santa Clara University [EMAIL PROTECTED]
Re: RE: A Future for Marxism?
It's important to note that Justin is referring below to issues of Marxism as influencing social movements. Though there's nothing wrong with Marxism-as-a-method as far as I can find, what really matters is the social movement. I'd put it slightly differently: when I speak of the demise of Marxism, I mean the demise of Marxism, so identified, as a social movement. This has no particularly obvious implication for whether historical materialism or Marxian political economy is true. I think that HM is largely true; traditional Marxian PE I think rather less wellof, as you know. I wasn't objecting to Justin's facts (and I won't quibble with the above, though I react viscerally to such patronizing rhetoric as to anyone who has eyes in his head). Well, my point is not that the conclusion is compelled, but that the facts are (as you grant) indisputable, and it's certaibly not uhnreasonable to conclude from the facts and tendencies that we see in history that Marxism as a social movement is washed up. Rather, there's nothing inevitable about the continuation of the above. In fact, though we have to think long-term, there are opportunities. How long term? ARe you talking about Keynes' long run? And opportunities for what? [Some valuable historical analysis omitted;) So the role of nationalist forces such as social democracy and Stalinism is much less. Instead, the emphasis among anti-systemic forces is more and more on internationalism (e.g., on uniting Mexican and US workers under NAFTA). There are still efforts to turn back the clock, as with radical Islam, but eventually these will fade, I believe. Because? In this light, there is room in the future for new, more radical, anti-systemic movements based in the international working class. They may not embrace Marxism by name, but they'd have a lot of Marxist content, which is what matters. This is the key thing. I have not beein arguing that we are at the end of history, class struggle is over, blah blah. what I have been arguing is that _Marxism as a mass movement_ is over. You don't disagree with this. You say, perhapsmore optimistically than I, that it doesn't matter so long as future struggles have a lot of Marxist content, i.e., class content, something like socialist aspirations, and the like. I agree,a lthough I worry how much they will be able to sustain this content without the Marxist identification. But we will see. They will have to, because I wouldn't put my bet on millions or even tens of thousands or workers surging through the streets under the leadership of a new communist party. Obviously, the struggle against the emerging world state (led by and dominated by the US) will be complex and bloody, and won't lead to automatic victory, but the development of the movement for democratizing that state (and ultimately the economic system it preserves) will be a fertile field for Marxian ideas. Or ideas inspired in part by Marxism. I said: Au contraire. I have expressly disavowed that here and elsewhere. I don't believe in historical inevitability. I have plainly said that it is possible, just extremely unlikely, that the situation may reverse. Jim said: it looks as if you're instead leaning toward a blinkered empiricism (what is will be) instead of inevitability. One of the key imperatives of Marxian thought is to not take perceived empirical reality for granted but to instead try to ferret out how the current tendencies of the system could lead to structural change. A broad-strokes effort at this appears above. (Of course, I can't really do that, since ferrets are illegal in California.) Jim Devine Well, I'm not how much we actually disagree at the end. Please note that I do not say that anticapitalsit movements are over, just their self-identification as Marxist. That has implications for us, however, I mean the people on this list. It raises real questions about whether there is any point to calling oneself Marxist. jks _ Join the worlds largest e-mail service with MSN Hotmail. http://www.hotmail.com
FW: Re: Iran
--- Original Message --- From: michael pugliese [EMAIL PROTECTED] To: [EMAIL PROTECTED] Date: 2/12/02 2:38:36 PM Like Thomas, I'm wondering why Iran was included in the State of the Union speech as composing one of the three axes. Can only surmise the influence of AIPAC (like this website with numerous articles, mostly mainstream contesting the Martin Indyk originated, Dual containment, of Iran and Iraq policy. http://www.geocities.com/CapitolHill/3163 ) One connected think tank really pushing Iran as a threat is the Washington Institute for Near East Policy. See Patrick Clawson, Policy Watch #601, Iran as Part of the Axis of Evil, Part II, athttp://www.washingtoninstitute.org/ A previous briefing in that same series, #593, on theHezbollah via Lebanon facilitation of 50 tons of weaponry to the Palestinian Authority, is made much of by Clawson and other hawks like Frank Gaffney at the Center for Strategic Policy. See, Karine-A: The Strategic Implications of the Iranian-Palestinian Collusion, by Robert Setloff. I sense a bit of disquiet in the less militarist ruling circles (Daschle on Lehrer News Hour yesterday, one of today's editorials in the New York Times) about a policy that couldn't be better designed to draw together the reformists and hardliners. (Does the punditocracy ever get tired of those overly simple designations?) One other piece making the rounds from Uri Avnery in the latest Counterpunch, seems way too reductionist to me. Hint; It's All Oil!Michael Pugliese
Re: Re: RE: A Future for Marxism?
A Future for Marxism? (Was: Wishful thinking) by Justin Schwartz 12 February 2002 04:30 UTC The argument is historical, and is available to anyone who has eyes in his head. In the era of 2nd International, Marxism was a powerful force among Western European workers. It bounced back, some, after WWII. Today in Western Europe, the PCI is gone, the PFC is a decaying rump, the KPD is many generations dead (and the PDS is a left- S-D formation largely confined to the East). Marxism never caught on in America or Canada, but it was a minor force to be reckoned with up through the start of the First Cold War. The 57 varieties of Trotskyism and Maoism never went anywhere. In the ex-Bloc countries, the Russian Revolution is in ruins, the ex-CPs are at best centrist (and the CPRF is an ugly red-brown Stalinofascist deformity); in the third world, Marxism in is in full retreat. China is officially Marxist but in fact pragmatically procapitalist and ruled by an authoritarian elite committed only to power. Vietnam is following China. N. Korea is a weird backwater. Only Cuba retains a trace of traditional Marxist élan. Marxist-identified revolutionary movements are no longer vanguards by collections of narcothugs like the remnants of the Shining Path and FARC. There are no mass self-identified Marxist working class movements anywhere, nor do any show any signs of emerging. What has been called Marxism, or rather the intellectual movement centered on Marx method of inquiry has significant roots in our history and is more than less an intellectual segment of every institute of higher learning in our country. The degree to which this intellectual movement has taken root amongst the various leaders of organized labor and leaders throughout the labor movement is conditioned by or rather viewed in the context of that, which is specific to the conditions of a particular country and era. What began as the work of two men pioneering a specific method of approach to the life of society has become a powerful world wide current of intellectual endeavor, the rise, peak and retreat and retrench based on the material power of classes, degree of development of modes of production in various countries, the law of the accidental, and an infinite amount of phenomena absolutely outside my field of vision of power to comprehend. The method of approach associated with the name of Karl Marx and Frederick Engels is of course quite different from its various ideological expressions and even the individuals who step forward as proponents of their method of inquiry. Just as no one would base an assessment of a person based on the persons ideological pronouncements about themselves, apparently many individuals within the social movement still remains unable to escape ideological categories parading as assessments of class factors, political groupings, conditions of various states of development of production and ideological pronouncements. Fortunately, the method of Marx penetrates beneath ideological modes of expression and seeks to examine the primary features of economic relations that various political phenomena operate within. The conception of a Marxist working class movement is an ideological category lacking substance, as is the idea of a Marxist country. All countries on earth express a unity of definable relations of production and technologically distinct productive forces, which of course are not ideological categories. Without exception all countries are governed by a state authority whose primary function is to stabilize class relations and protect the existing property relations. Governments are constituted to carry out the administrative functions of the state authority, service the interest of the class whose property relations are being safeguarded as well as other important administrative function necessary for the running of society. The various ruling political parties that have come to power in country's such as China, Vietnam and N. Korea in particular did so under specific material conditions that more than less have nothing to do with ideological utterances. The path to power of these political parties had very little to do with the working class movement as such and emerged from the conditions of the economically backward colonial and semi-colonial world. The path to power was civil war, as witnessed in the long and complex civil was in China. One can of course argue over the set of military tactics and alliances of the Communist Party of China during it various phases of military contest, but this does not bring us one step closer to a qualitative description of these parties as political organizations and the configuration of the working class in each respective country. Without question these parties were not political parties in the meaning of constitutional bodies of political representatives of classes and the fight to impose the will
Re: Re: Re: Re: Re: the profit rate recession
In a message dated 2/12/2002 2:18:34 PM Central Standard Time, [EMAIL PROTECTED] writes: I had raised an objection to Fred's theory in 21987 and 99. I have found that Samuel Hollander makes a similar criticism of Marx in his classical Economics: "The curve relating the profit rate and accumulation--whatever its slope--is continually shifting outward because of an increase in the purchasing power of profits, because the wants and greed for wealth increase, and because o f various institutional changes which ease the savings-investment process...With capital growing so rapidly, the notion of a supposedly falling growth rate of labour demand comes into question...But too rosy a picture of capitalistic development would not presumably have appealed to Marx." p. 397. In Volume 3 of Capital there is a Chapter titled "The law of the tendency of the rate of profit to fall" as opposed to "a supposedly falling growth rate of labour demand," whatever that means. Marx of course spoke highly of the epoch of capitalist development. This is know to anyone that has actually read Marx. Marx will continued to be criticized for things he never said. Melvin P.
No wonder Marxism is dead.
Ken Hanly is right. Google in the hands of Pugliese can find any damn thing. Michael Pugliese Zoroastrian and Parsis in Science Fiction ... Kim Stanley Robinson, Red Mars. New York: Bantam (1993) (Nebula award), 2059, Pg. 418: No wonder Marxism is dead. ... www.adherents.com/lit/sf_zor.html
the triumph
America's imperial war The liberals who backed the Afghan bombing are now lined up with rampant US militarism George Monbiot Tuesday February 12, 2002 The Guardian [UK] Never was victory so bitter. Those liberals who supported the war in Afghanistan, and so confidently declared that their values had triumphed in November, must now be feeling a little exposed. Precisely who has lost, and what the extent of their loss may be, is yet to be determined, but there can now be little doubt that the dangerous and illiberal people who control the US military machine have won. The bombing of Afghanistan is already starting to look like the first shot in a new imperial war. In 30 years' time we may be able to tell whether or not the people of Afghanistan have benefited from the fighting there. The murderous Taliban have been overthrown. Women, in Kabul at any rate, have been allowed to show their faces in public, and readmitted into professional life. Some $3bn has so far been pledged for aid and reconstruction. But the only predictable feature of Afghan politics is its unpredictability. In the absence of an effective peacekeeping force, the tensions between the clan leaders could burst into open warfare when the fighting season resumes in the spring. Iran, Russia and the US are beginning, subtly, to tussle over the nation's future, with potentially disastrous consequences for its people. In the meantime, 7m remain at risk of starvation. Some regions have been made safer for aid workers; others have become more dangerous, as looting and banditry fill the vacuum left by the Taliban's collapse. Already, some refugees are looking back with nostalgia to the comparative order and stability of life under that brutal government. For the Afghan people, the only certain and irreversible outcome of the war so far is that some thousands of civilians have been killed. But other interests in Afghanistan are doing rather nicely. On January 29, the IMF's assistant director for monetary and exchange affairs suggested that the country should abandon its currency and adopt the dollar instead. This would, he explained, be a temporary measure, though, he conceded, when an economy dollarises, it takes a little while to undollarise. The day before, the administrator of the US Agency for International Development revealed that part of its aid package to Afghan farmers would take the form of GM seed. Both Hamid Karzai, the interim president, and Zalmay Khalilzad, the US special envoy, were formerly employed as consultants to Unocal, the US oil company which spent much of the 1990s seeking to build a pipeline through Afghanistan. Unocal appears to have dropped the scheme, but smaller companies (such as Chase Energy and Caspian Energy Consulting) are now lobbying for its revival. In October the president of Turkmenistan wrote to the United Nations, pressing for the pipeline's construction. More importantly, the temporary US bases in Afghanistan, Pakistan and the Caspian states appear to be putting down roots. US military tent cities have now been established in 13 places in the states bordering Afghanistan. New airports are being built and garrisons expanded. In December, the US assistant secretary of state Elizabeth Jones promised that when the Afghan conflict is over we will not leave central Asia. We have long-term plans and interests in this region. This is beginning to look rather like the new imperium which commentators such as Charles Krauthammer have been urging on the US government. Already there are signs that confrontation with the axis of evil is coming to involve more than just containing terrorism. Writing in the Korea Times last month, Henry Kissinger insisted: The issue is not whether Iraq was involved in the terrorist attack on the United States, though no doubt there was some intelligence contact between Iraqi intelligence and one of the chief plotters. The challenge of Iraq is essentially geopolitical. An asymmetric world war of the kind George Bush and his defence secretary, Donald Rumsfeld, have proposed provides the justification, long sought by the defence companies and their sponsored representatives in Washington, for a massive increase in arms spending. Eisenhower warned us to guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. But we have disregarded his warning, and forgotten how dangerous the people seeking vast state contracts can be. In October I wrote that the anthrax scare looks suspiciously convenient. Just as the hawks in Washington were losing the public argument about extending the war to other countries, journalists start receiving envelopes full of bacteria, which might as well have been labelled 'a gift from Iraq'. This could indeed be the work of terrorists, who may have their own reasons for widening the conflict, but there are plenty of
Enron and California: The Smoking Gun?
This crucial story in the LA Times explains the link between the California energy crisis and the collapse of Enron. As the excerpt below indicates, Enron needed huge amounts of cash to act as a market maker in energy futures. The company then assumed that its early profit margins in this segment of their business would continue into the future and by marking to market they recorded as present day revenue those expected future returns. http://www.latimes.com/business/la-10818feb12.story?coll=la%2Dheadlines% 2Dbusiness The only reason the contracts were worthwhile was that mark-to-market, he said. You were able to take today 10 years' worth of minimal profit. But once you're into it, if your curves aren't as good as what you hoped for, your revenue line deteriorates. You lose money. And lose money EES did. Unforeseen problems with California deregulation threw off the models that predicted profits for the California book of retail customers. The exact amount is unclear, but Dickson said, We had a couple hundred million dollars of position that EES had taken for that regulatory risk, where we predicted one thing and now it was different. Stephen F. Diamond School of Law Santa Clara University [EMAIL PROTECTED]
Re: Enron and California: The Smoking Gun?
Steven, thank you for your many illuminating posts. This marking to market seems similar to the false revenue recognition by software firms which were seem to have thumbing their noses at SEC standards which differ for software and hardware firms. Aren't there a whole bunch of lawsuits against software start ups down there in the Valley for false revenue recognition? I would imagine that in these cases those with common shares will be left out in the cold; even those with preferred shares are getting pennies on the dollar, no? At at a time that profitability is already threatened and capital is being dissipated in military and police expenditures, it seems that the US economy can ill afford extraordinary legal expenses. I know VC firms are sitting on a $100bn or so, but I wouldn't think they'd like to see it go to covering enormous legal costs of their start ups. But hell what else are they going to do with it--create another NASDAQ bubble though led this time by biotech and medical equipment firms? rb
Re: Enron and California: The Smoking Gun?
Rakesh wrote: I know VC firms are sitting on a $100bn or so, but I wouldn't think they'd like to see it go to covering enormous legal costs of their start ups. But hell what else are they going to do with it--create another NASDAQ bubble though led this time by biotech and medical equipment firms? I had a conversation with a Silicon Valley VC a few months ago and as far as I recall his estimate was below $100 Rakesh but although I don't remember the exact amount, it was huge. This person, whose title according to his business card was Mentor-Investor, didn't have a clue about what to do next with all the money he had. I am quite curious about what they will do with that money as well. There is lots of money out there waiting to be invested in somewhere. Sabri
Time to bore the masses with endlessness
[I thought economists didn't believe in the soul? Oh, and Fritz Hollings can redeem himself by telling CSpan viewers that, yes, FedEx workers need and have the right to a union just like UPS!, senile bastard pile of frog crap.] Gloom as Kenneth Lay slips off the hook Enron man 'adds years' to inquiry by pleading Fifth Amendment Matthew Engel in Washington Wednesday February 13, 2002 The Guardian Congressional investigators predicted that the unravelling of the Enron affair would now take several years after the fish everyone was most anxious to catch slipped away yesterday. Kenneth Lay, the former chairman and chief executive of the fallen energy company, answered his subpoena to appear before the Senate Commerce Committee and, as predicted, answered no questions, asserting his right under the Fifth Amendment not to incriminate himself. In a brief statement to the committee, Mr Lay said he was deeply troubled by the dilemma and had reached his decision not to give evidence only after deep soul-searching. The senators were left almost gasping with frustration. It's not possible to determine why the Enron ship is at the bottom of the ocean unless we hear from the captain, said Ron Wyden of Oregon. We are all reduced to a sense of futility, said John Kerry of Massachussetts. With the enactment of this time-honoured and ritualised piece of Washington political theatre, the vast number of investigators working on the case have nowhere to go except towards reform of company law and/or a long slog of evidence-gathering to tie corporate executives - up to and including Mr Lay - to specific crimes. The task is being complicated by absurd duplication. Thirteen separate congressional committees are looking into the case: some of them do not expect to begin hearings before the autumn. These are in addition to all the federal and local agencies which will eventually have to place their findings before a grand jury if prosecutions are to result. The task is absolutely gargantuan, said a congressional source. Enron had 2,832 offshore subsidiaries, all of which will presumably need to be studied. So far most of the investigative headway has been made by the media. The Wall Street Journal yesterday compounded the senators' frustration by managing to link Mr Lay, for the first time, to at least one of the executive-run partnerships which helped hide Enron's debts. The Journal had a document with Mr Lay's signature approving a deal with the LJM2 partnership, run by Enron's former chief financial officer Andrew Fastow. Previously, Mr Lay had said he was not fully informed about the partnerships. All the committee could do was force Mr Lay to listen, for an hour and a quarter, to the senators' individual statements. He sat, as upright and impassively as he could, while the politicians - many of whom had taken his money -lectured, hectored and occasionally insulted him. Peter Fitzgerald of Illinois called him a most accomplished confidence trickster and added: I'd say you were a car nival barker, except it wouldn't be fair to carnival barkers. Barbara Boxer of California, whose state suffered an energy crisis last year in which Enron was deeply implicated, told him: I know you're not going to talk to the committee. You have the right, but I have the right to talk to you. My state was bled dry by your price-gouging. And what you did to your employees was without conscience. Mr Lay said his refusal to answer questions was solely at the insistence of his lawyers and added: I come here today with a profound sadness about what has happened to Enron, its current and former employees, retirees and other stakeholders. He is the sixth person involved in this scandal to plead the Fifth Amendment before Congress. And the one significant exception, Jeffrey Skilling, also a former chief executive, was widely excoriated for his insistence that he was ignorant of the company's practices. Nearly all the senators refrained from overt political points, although the crucial House vote on campaign finance reform, expected today, provided a strong undertow to proceedings. The one exception was the chairman, Fritz Hollings. There's no better example than Kenny Boy of cash-and-carry government, he said. Mr Lay tried not to wince.
Reluctant Imperialism
From the Guardian article Jim sent: Yet still the armchair warriors who supported their bombing of Afghanistan cannot understand that these people now present a threat not just to terrorism but to the world. Below is an article by someone who identifies himself as a member of the war party. I don't know if he has any influence on the men who run the military-industrial complex, that is, the people mentioned above, but if his likes have any influence, then George Monbiot, the writer of the article Jim sent, is quite right. Sabri +++ Finishing the Job The clash at the end of history. By Stanley Kurtz Mr. Kurtz is also a fellow at the Hudson Institute February 12, 2002 8:40 a.m. National Review Online www.nationalreview.com The United States is entering an era of reluctant imperialism. That era will be neither a clash of civilizations nor the end of history, but will contain elements of both. The new American imperialism forces us out of a strictly realist posture, in which we nurture our own democracy while trying to achieve a stable balance of forces among our not always democratic civilizational counterparts. Instead, as military success grants us greater control over portions of the non-Western world, we will undertake experiments in democratization. Those experiments in democratization will encounter cultural limits, both at home and abroad, forcing a partial reversion to realism. The challenge of an era of reluctant imperialism will be to find the proper balance between active democratization and realist prudence. Given overwhelming support for this war and for the president, it may seem odd to call our coming imperialism reluctant. Yet the swift and nearly cost-free success of the war in Afghanistan obscures two post-war problems of fundamental importance our culture, and theirs. The problem in our culture is our reluctance to take casualties and make sacrifices in the service of nation-building. The problem in their culture is the lack of fit between many non-Western societies particularly Muslim societies and democracy. Since the collapse of communism, America has been the dominant power in the world. Nonetheless and notwithstanding the claims of the Left to the contrary we have not been imperialists in any conventional sense. Our refusal to finish the job, by ousting Saddam Hussein after the Persian Gulf War, and our abandonment of Afghanistan after the retreat of the Soviets, reflect America's reluctance to take on an imperial role. Yet now that we have conquered Afghanistan and are about to conquer Iraq (and maybe other countries as well), we will be forced to confront the cultural complications, both at home and abroad. Concerns about taking casualties have kept the American presence in Afghanistan small, inhibiting our efforts to root out the leadership of al Qaeda. Major questions remain about the size of the post-war peacekeeping force (which, out of concern for casualties, America has declined to join), about the nature of the emerging Afghan government, and about the problem of consolidating that government's power over local warlords and across the different ethnic groups. All of these problems will emerge again in Iraq after we have conquered it. This is not to counsel passivity or doom. We can and must win a broad-based war against terrorism and rogue states. That war has only just begun. The question is not whether we can or should win such a war, but what happens after we do. In the wake of victory, reluctant imperialism will emerge both as a problem, and as wise policy. The ultimate reluctant imperialist is George Bush, who disavowed any interest in nation building during the campaign, yet is prosecuting a war that will force us to reconstitute not a few governments in culturally alien lands. The president rightly refuses to stand idly by while terrorists and hostile nations prepare to use weapons of mass destruction against the United States. But that does not mean the president's concerns about nation-building have altogether disappeared. On the contrary, as noted, the administration's post-war policy in Afghanistan has already been inhibited by worries over casualties. The advance and spread of technology has both forced us into imperialism and temporarily obscured the nature of our new imperial dilemma. The technology of mass destruction, and the turning of even conventional technology into an agent of mass murder, are forcing America to impose itself upon the world with surprising thoroughness. The British were able to rule Afghanistan indirectly. If we're lucky, we may be able to do the same. But the British did not have to contend with the possibility that a few rogue Afghans might blow up London. The new situation means that we may now require not only a fully cooperative Afghan government, but an historically rare extension of that government's power to the point where the local warlords are defanged something we may not be able
Re: FW: Re: Iran
Michael Pugliese wrote: One other piece making the rounds from Uri Avnery in the latest Counterpunch, seems way too reductionist to me. Hint; It's All Oil! Michael is right. Avnery's piece looks like a fallacy of misplaced concreteness. At the same time, if oil is not under discussion in a piece on the exis of evil, it is like a conference on malaria that does not discuss the mosquito. Mohammad Maljoo _ MSN Photos is the easiest way to share and print your photos: http://photos.msn.com/support/worldwide.aspx
Review of Radical Political Economics statement
I was glad to see on the website of the Review of Radical Political Economics http://www.urpe.org/rrpehome.html the Editorial Board has removed the sanction denying Dr. Kliman the right to submit articles to RRPE for publication It also clarifies what it describes as a misunderstanding, and I am sure could well have been a misunderstanding. While there are much wider issues about the appropriate processes for resolving misunderstandings and conflicts of this nature, and about the degree of openness and pluralism that publications should demonstrate towards contributions from various sources, this statement is a small success in resolving a technical point of dispute. Quite rightly earlier, people were generally very restrained about using the columns of PEN-L to debate differing viewpoints despite the strong personal feelings involved. I strongly suspect Michael would continue to feel the same way. I suggest the above statement should be noted, even if lessons are explored now in more suitable forums. Perhaps if there are any comments on this post of mine, they might restrict themselves to URL references to sites that explain the differing points of view for people's consideration. Chris Burford London
Re: No wonder Marxism is dead.
At 12/02/02 16:42 -0800, you wrote: Ken Hanly is right. Google in the hands of Pugliese can find any damn thing. Michael Pugliese Yes I try to learn from this technique. It is rather like free association in a very large group. You do not always know whether your association is the relevant one, or the previous speaker's/ writer's or the associations that Google shows up. But in a wider sense I think the point is proved that there is a material base that is continually going to throw up dialectical thinking and materialist thinking. Zoroastrian and Parsis in Science Fiction ... Kim Stanley Robinson, Red Mars. New York: Bantam (1993) (Nebula award), 2059, Pg. 418: No wonder Marxism is dead. ... www.adherents.com/lit/sf_zor.html The link here is with the ancient idealist dialectics of Zoroastrianism. They may be out of fashion but G W Bush thinks the world is a battle between Good and Evil. And a science fiction writer who lards his story of the colonisation of Mars with references to Marx, some of which, I suspect, are not wholly irrelevant. Fashions come round faster and fast these days and the taboo against Marxism has largely gone. I mean the winner of Pop Idol in the UK managed to succeed without having to go through a political witch hunt because of a vaguely positive remark about Marx. At a follow up interview with a journalist on the Guardian: I bowl him Karl Marx who he admits to studying for a couple of weeks. Marx made him question the easy option of trying to make a lot of money (something Engels did for his old mate), but it hasn't made him vote yet. I don't know why. Perhaps I've become a bit more cynical. That's fine. Chris Burford London
