Author: PsiFighter37

(cross-posted at Deny My Freedom and Daily Kos)

Some people are deservedly shocked at Senator Barbara Boxer’s apparent betrayal of her liberal roots (and her conscience) in campaigning for Joe Lieberman today. Even more are saddened by Bill Clinton’s decision to speak in favor of Lieberman, even when the senator was at the front of the line to castigate the then-president over his affair with Monica Lewinsky. Knowing that these dual appearances by national figures in the Democratic Party was coming up, one of the questions I asked the staffers with the Ned Lamont campaign when I went canvassing yesterday was whether they were concerned about Clinton’s and Boxer’s appearance with Lieberman. I was a bit surprised to find that they didn’t seem too worried. Sure, they were disappointed that the good senator from California was coming to the aid of a fellow club member who doesn’t agree with her beliefs at all, and they admitted that anyone would turn out to see Bill Clinton. But overall, there was a sense of indifference.

And they were right. Clinton and Boxer may very well show up to support Joe, even lying blatantly when confronted with the facts, but in the end, all this will serve to do is toss a few more logs onto the flames.
It’s a given that despite his personal indiscretions, as well as his general inability to advance Democratic ideals during his two terms, Bill Clinton is a beloved figure in the Democratic Party. He may not have brought us universal health care or real welfare reform, but people remember that times were good under Clinton. The whole world didn’t hate us, and our leader was a rock star not only in America, but in countries spanning the planet. But the fact of the matter is that he isn’t president any longer, and he hasn’t been for more than five years. Nutmeggers may still have a fondness for Bubba in their hearts, but that’s not going to make I-95 become any semblance of an ideal interstate highway. Additionally, as always seems to be the case these days, Clinton didn’t even go after Lamont, taking a markedly different course from Lieberman’s treatment of his opponent:

In a 20-minute speech to a capacity crowd in an ornate theater, Clinton went easy on Ned Lamont, whose challenge gained traction when he accused Lieberman of being too close to Bush on the war and other issues.

“He seems like a perfectly nice man. He’s got every right to run and he’s waged a vigorous campaign,” the former president said.

Contrast that with what Lieberman had to say at the same rally:

Lieberman wasn’t nearly as deferential to Lamont as Clinton was. “My opponent is peddling what I would call a big lie, and that is I’m not a real Democrat,” he said.

Ultimately, Connecticut voters are going to be voting for Joe Lieberman or Ned Lamont. And in recent weeks, it’s become more and more evident that Lieberman is a nasty, dirty campaigner, whereas Lamont sticks to criticizing the senator on the issues while having a little fun. The fact that Bill Clinton says some nice things about Lieberman won’t help him or his campaign hide the fact that they are the ones being smear merchants. Whether it be Lieberman himself, his serially out-of-touch campaign manager Sean Smith, or Marion Steinfels, a spokesperson that would make Scott McClellan proud, the fact is that 20 minutes of Bill Clinton will not do anything to erase the negative image that Lieberman has built up this entire campaign.

That brings me to Barbara Boxer. She is (was?) widely loved in the blogosphere and in the grassroots for being a vocal opponent from Iraq at the onset, being the only senator to contest Ohio’s 2004 presidential results, and forcefully sparring with Condoleeza Rice during her confirmation hearings. However, her support for Lieberman (which was duly noted when she spoke at Yearly Kos) has revealed that she may be nothing more than most politicians: pandering to the base to get their support but abandoning her ideals when she is required to. The aforementioned video from My Left Nutmeg serves well to demonstrate that Boxer is just as insulated from the grassroots as it seems like almost all Democratic politicians are. But will Boxer have any effect at all? She may have garnered the third-highest vote count during the 2004 election, but she does not have the same national profile that some of her fellow senators who have sat out this race do, such as Hillary Rodham Clinton or John Kerry. Even more, Boxer’s base is the liberals and the progressives that are most likely going to be supporting Lamont strongly to begin with. In the end, the senator from California may have come back east to stump for Lieberman, but she may return home with a few less people willing to tolerate her diaries at Daily Kos, where she advertises her political action committee but never interacts with the community.

Clinton and Boxer won’t fire up the Democratic base to vote for Lieberman. It’ll probably do more to induce nostalgia of a Clinton presidency that is a distant memory and amplify the fact that Joe Lieberman has been complicit in helping the Republican Party destroy the prosperity and good standing we once enjoyed. I would venture to say that the two endorsements Lamont received today – one from a former state Speaker of the House, the other the finance chair on Lieberman’s first campaign way back in 1970 – will have a bigger impact. These are people that some Nutmeggers may remember, and it’s the resonance of formerly staunch Lieberman backers supporting his challenger that will stick. As for the blogosphere? Well, those of that are within reasonable distance of Connecticut will be more motivated than ever to volunteer our time on the campaign. As is the case whenever someone tries to shoot down a netroots-backed candidate, there may be an outpouring of donations to Lamont, who is matching every dollar donated by the grassroots. Bill Clinton and Barbara Boxer may think they are fanning the flames of dissent within the Democratic Party, no matter how disingenuous their appeals may sound, but they are simply adding more gasoline to a fire that was ignited a long, long time ago. Lamont is on a roll, and despite having less money than Lieberman, despite running a cleaner campaign, despite having fewer big names come out and support him during the primary – he is ahead…and come August 8, we are going to show the Democratic Party establishment that the passionate fire from the netroots, the grassroots, and the rest of us who feel like our party has long ignored us, is here to stay, burning brighter than ever.

(cross-posted at Deny My Freedom and Daily Kos)

Top-secret location of angry blogofascism

Due to yesterday’s bad weather and some really bad lower back pain, I was unable to make the trip up to Connecticut to volunteer for Ned Lamont’s Senate campaign. Today, however, was a beautiful day, and I made the 30-minute drive from my downstate New York place of residence to the Lamont campaign’s 4th District office in Norwalk, Connecticut. It was a beautiful day for canvassing, and myself, three others from New York (two from upstate, one from Manhattan), and a few of the campaign staff headed out for some door-to-door knocking in the city of Stamford, where gubernatorial candidate Dan Malloy is currently mayor. From what the staffers told me, this is a place where Lieberman is fairly strong, as evidenced by the number of Lieberman/Malloy signs that were paired together in this neck of the woods.

As usual, canvassing on a weekend afternoon proved to be a challenge. Of the 51 addresses that I reached during my 2.5 hours on the ground, I only had people answer at 13 addresses – and only 7 of those had any sort of opinion on the race. My first contact, an elderly gentleman who was on his way out for the afternoon, said that he was leaning towards Lamont because of the screwup in Iraq. 3 other contacts were strongly for Lamont. One woman I spoke with clearly understood what this race was about – she mentioned Iraq, but it was the other things that he has been wrong on that bothered her greatly. So much for the mainstream media talking point that the race is solely about anti-war activists being out to make an example of Lieberman. Even though we were in Lieberman territory, this woman said she’d take a lawn sign as well. One of the people who strongly supported Ned didn’t even know about the race to begin with. She said she would vote for the Democrat (something which was fairly ironic in and of itself), but after I explained Lamont’s positions and how Lieberman has done nothing to help keep jobs in the country, she said she’d vote for him. I felt bad – she’s had a bacherlor’s degree in accounting for 3 years, and she still can’t find a job. That says something when it becomes hard for our graduates can’t find a job in the white-collar service industry. I gave her and her mother some flyers, who said that she would talk up Lamont at her church. You can’t ask for better campaigning than from your neighbors.

My other 3 contacts that had an opinion were for Lieberman. The Lamont campaign does something interesting – if the person says anything remotely positive about Lieberman, we’re told to politely say thank you and move on. It makes sense; with so many people to contact, taking precious time to debate someone on the issues who isn’t likely to change their mind is probably a waste. The most striking thing is that none of the 3 gave any sort of good explanation for their support of Lieberman. One guy said that he was voting for Lieberman, but nothing more. Another said, “Ned Lamont doesn’t exist on this street – this is Lieberman territory.” To say the least, the idea of such enthusiastic support for the dour senator was bemusing. My last contact gave a reason for his support of Lieberman. He said that as a family man, he supported the ‘moderate’ policies of the incumbent. I moved on, but I’m somewhat puzzled by what that means. It didn’t sound like the ‘moral values’ proposition of support that the right wing of the GOP uses, but it still doesn’t make much sense to me. Being a personally decent guy would not be the basis for how I’d vote; I would want someone who will legislate competently and stay true to the values of the party he purportedly is a part of.

Four houses I visited were undecided on who they would vote for. Most of them seemed to not really know much about the race, but one person brought up that although they were decidedly unhappy with Lieberman, their main issue was education and were concerned about Lamont’s vote for cutting education funding in Greenwich as a selectman. Perhaps someone would do well to figure out how to counter this argument, as I did not have the background to confront this issue as best as I probably could have. Additionally, one of the Lamont supporters was extremely worried about what she perceived as the Lamont campaign’s silence on the conflict between Israel and Hezbollah. She mentioned that some people were talking about switching their vote solely on this issue, as Lieberman is known as strongly pro-Israeli, and they know where he stands. Although the issue is discussed at on Lamont’s website, this is something that should probably be publicly addressed, even though it will undoubtedly make some of his supporters in the blogosphere unhappy, no matter what he says.

Afterwards, we headed back to the office, where I said my farewells to the staffers, promising that I’d see them next weekend. As I was driving past the office, I saw three young boys standing outside, Lamont yard signs hoisted above their heads. I broke into a smile. Horrible things go on in the world every day, but when you see something like that, you can’t help but feel in your heart that better days are coming. This time, things will be different. Then it was back to I-95, driving back towards home, hoping that I had made a difference today.

A word on the office and the staffers: most of them are college students of my age; I think the oldest staffer was 24 years old (a former Wharton undergrad, which was quite the coincidence). They’re all enthusiastic about the race, and it was great to see an air of camaraderie amongst them. Even though I walked through the doorstep without knowing any of them, they were quite kind to me and very helpful in filling me in on the campaign. Most of them think that Clinton’s appearance tomorrow is being done to help Hillary more than helping Joe, the same view that I held. The campaign is highly focused on winning the primary, but I discovered that the campaign’s going to need all the support it can get afterwards. Why is this? Simply put, most of the staffers in the campaign offices are college students, and as August comes, we’re going to be returning to school. The top people in Lamont’s campaign aren’t in school, but there is going to be a void of campaign staff once the primary passes and the campaign gears up for the general election. Any help that can be given is going to be greatly appreciated. Donate, volunteer your time, canvass, phonebank – whatever you can do, please, please, PLEASE do it. Don’t even hesitate to think about it.

And a final note, one that bloggers have been apt to point out over and over again. Lieberman’s problem is not bloggers like myself. It’s with the people of Connecticut. While Tim Tagaris has done a masterful job coordinating the online segment of Lamont’s campaign, most of the staffers I spoke to had only recently joined the blogosphere. One of the staff coordinators said that the Internet and the blogs was just too confusing for him. The blogosphere may be aiding the campaign, but it is not fueling it. What is driving this campaign is a group of young Connecticut residents who want a change in their state, a change in the Senate, and most importantly, a change in our party. Ned Lamont’s campaign is the epitome of people-powered politics, and I’m glad I could be a participant – and a witness – to it this afternoon.

(cross-posted at Deny My Freedom and Daily Kos)

I first became actively involved in politics when I arrived at college almost two years ago, even though I had been following the events of this country for several years before. Joining my university’s College Democrats was a perfect way to participate in what was widely acknowledged as the most important election in recent memory. The first meeting that I went to – largely for incoming freshman – we packed a lecture room at the Wharton School’s Steinberg-Dietrich Hall with probably close to 200 eager students. Throughout the fall, there continued to be large enthusiasm on campus for the upcoming elections. I did phonebanking and canvassing for the Kerry/Edwards campaign, along with doing volunteer work on Joe Hoeffel’s Senate campaign. We held an on-campus rally for John Kerry in late September (I took the photo at the top of the crowd at the rally). I had the chance to see both Kerry and Edwards, as well as Howard Dean, Terry McAuliffe, and Bill Clinton. Vanessa Kerry paid a visit to one of our meetings. These were heady times indeed, and even though the election didn’t come out our way, we increased on-campus voter turnout by 200% (this doesn’t include students who lived off-campus), and we turned out an 80% majority for the Democratic ticket.

Once the election finished, though, there was a dramatic drop-off in participation. For the most part, 2005 came and went, and things only started picking up towards the end of last year, when we had Patrick Murphy come to a couple of our meetings and we held a fundraiser for our organization. Atrios and Booman were there, as well as MyDD’s Chris Bowers, and frankly, I was surprised by the student turnout for an event that was not so much a campaign event as it was a social gathering.
The main question I pose is this: how can we ensure that young Americans – including those who are Democrats – stay involved in the political process? It’s a shame that our biggest events are when national elections come around every two years. In 2004, we literally found out Kerry would be having a rally on-campus three days before it happened – and we drew probably 500 people for an impromptu meeting outside of the highrise dormitories. However, it’s a good meeting for us when we get more than one percent of our membership – or 20 students – to come to our weekly meetings. This is not meant as a critique of how my chapter is run (they do an excellent job on what appears to be a largely politically apathetic campus), but it’s meant to question how we get more young Americans to care about the direction this country is moving in.

In the past couple of days, the College Democrats of America have been holding their annual convention in St. Louis. Many of the party’s luminaries – Dean, Wesley Clark, and Nancy Pelosi, to name a few – spoke to the gathering. What struck me was these remarks by Pelosi:

ST. LOUIS (AP) — Now more than ever, the Democratic Party needs the energy of its younger members, House Minority Leader Nancy Pelosi said Saturday during a speech to college-age Democrats.

In a speech to approximately 400 at the College Democrats National Convention at Saint Louis University, the California congresswoman noted that John Kennedy was just above the minimum age for office when he was elected to the Senate, and that Martin Luther King Jr. was in his 20s when he began delivering speeches that changed the world.

Indeed, it’s one thing to say that the Democratic Party needs the youth vote to come out in force for the 2006 elections. However, as I’ve mentioned above, it is extremely difficult to get students to justify spending an hour or two of their time on a weeknight to come to meetings with academics and other obligations. 400 students, to me, shows just how much of a failure CDA is to begin with. That’s 20% of the Penn Democrats’ membership – and that’s only one university. I would venture to guess that the only people who showed up were the leaders of the various chapters of the College Democrats. The organization may exist, but it is largely nonexistent for all intents and purposes.

I’m going to use the Penn Democrats again as an example. We receive virtually no funding from the national organization (College Republicans, on the other hand, are funded by their national organization). The school doesn’t give us money, as we are a partisan organization. In the end, it comes down to us raising a little money from alumni and the parents of current students. For the most part, our fundraiser in April was a test run to see if it would be more successful. We need the money – to help out on local congressional races such as Patrick Murphy’s and Lois Murphy’s races, we have to take a train both ways – which costs up to $20-30 for just one trip. Count in expenses for food, and it’s no wonder students prefer to party or do academic work instead of essentially paying to do volunteer work. In addition, CDA utterly fails to utilize the Internet for doing outreach, as evidenced by their pittance of a blog. I see campaign groups for various candidates for positions within CDA on the popular college networking website Facebook, but I don’t care who runs or what they say they will be doing – because in the end, it’s a popularity contest that won’t make a damn difference in how the individual chapters operate. If this is how I feel – someone who actively participates in my chapter and who is acutely aware of political happenings in America – what does that say of the average young American?

A couple months ago, I proposed that a hybrid website that combines the social networking aspects of Facebook and the political community blogginess of Daily Kos would help bring in more American youth to the political process. But perhaps the more relevant question is this: how do we fix a broken Democratic Party for those coming of age in the present? It’s one thing for Wesley Clark to have a Facebook profile. It’s a completely different thing to utilize the latent energy that my generation has and turn that into a positive force for Democratic politics that has not been seen in decades.

(cross-posted at Deny My Freedom and Daily Kos)

Last weekend, I wrote about the brewing corporate scandal regarding backdated stock options. For a quick refresher, the SEC has been investigating companies that have irregularities with regards to the time when stock options were given to corporate executives and employees. The ongoing investigations were thought to have involved about 50-60 companies and  the question of whether or not there has been ‘backdating’ of stock options given as compensation to executives – essentially changing the date at which these options were given to periodic lows of the company’s stock. This in and of itself is not illegal, as the US Attorney Kevin Ryan pointed out, despite the questionable ethics.

Backdating is not necessarily illegal if it is properly disclosed and accounted for, he said. But “fraudulent intent to take advantage of insider information or accounting malfeasance” as well as “an effort to hide from the market and keep others not fully informed” potentially could be deemed securities fraud, accounting fraud or wire fraud.

Essentially, there has to be intent or a lack of full disclosure to investors in order to have a crime. One might think that this high bar would have the effect of diluting the amount of wrongdoing found. However, the first charges were filed yesterday, and if it’s any indication of what’s to come, the Justice Department and the SEC are going to be taking a very hard line:

Federal authorities issued civil and criminal securities-fraud charges against a former Silicon Valley chief executive and two other executives in a stock-options backdating scheme, signaling they will take a hard line in the widening scandal.

Prosecutors accused 43-year-old Gregory Reyes, the CEO of Brocade Communications Systems Inc. until January 2005, of backdating options he doled out as a “committee of one” to hundreds of employees, boosting the potential value of the options and concealing millions of dollars of compensation expenses from shareholders.

Officials underscored how seriously they view options manipulation by charging not just Mr. Reyes — who isn’t directly accused of backdating his own grants, and who made no profit from them — but also a former chief financial officer and former vice president for human resources at the firm.

It’s stunning, to say the least, to see the former CEO of Brocade (a communications company) to be charged for a crime that he did not, at least on the surface, personally appear to benefit from. Additionally, the CFO of the company did not even directly participate in the effort:

In addition, the SEC has filed civil charges against Antonio Canova, Brocade’s former chief financial officer, saying he learned about the scheme in writing but failed to alert Brocade’s auditors or audit committee.

The issue at hand may be markedly different, but it bears a striking resemblance to what happened at Enron. Top executives colluded in a manner that manipulated the value of the firm and its earnings, while other executives turned a blind eye to the problem. An argument one will hear often from corporate defenders when it comes to regulation is that corporations will be able to police themselves and be able to distinguish what is right and wrong. However, as I learned in my corporate ethics class, corporations often get into trouble because they figure out how to try and get around the law – instead of trying to do what is the ethically correct course of action to take.

More from the Wall Street Journal:

The civil and criminal complaints allege broad backdating at Brocade from 2000 to 2004. The SEC alleged that Mr. Reyes was trying to attract employees to the company with particularly valuable options grants. Brocade’s stock price was rising rapidly for part of the period, meaning that every day that passed before employees received their grants decreased potential gains. The complaints allege that Mr. Reyes looked at the stock-price history and picked prior days when the stock was particularly low to date option grants.

[…]

Brocade restated results in 2005 after an internal probe into options matters. The biggest impact was in the year ended Oct. 28, 2000, which swung from a $67.9 million profit to a $951.2 million loss. The restatement lowered net income in some periods, and raised it in others. In all, Brocade shaved a total of $303 million in net income between fiscal 1999 and fiscal 2001, the SEC noted in its complaint.

In yesterday’s filings and at the news conference, officials described in some detail how the alleged scheme worked. In one instance, according to the SEC complaint, Mr. Reyes interviewed a job candidate on Feb. 1, 2002, and told Ms. Jensen that day that the candidate would be hired and should be included in an options grant being backdated to Nov. 28, 2001. Ms. Jensen included the person and signed a backdated offer letter to the candidate, who was hired. When Brocade shares fell, according to the SEC, Mr. Reyes changed the grant date again, and Ms. Jensen directed preparation of a new, backdated offer letter.

The article makes a good point in that backdating options does not necessarily mean that restated earnings will be lower than before – indeed, it may sometimes be higher, particularly if the stock’s price continues to sink for a given period of time. However, for one fiscal year, there was a restatement of over one billion dollars. Imagine if other companies are discovered to have consistently backdated options to the point where it means that there were actually billions of dollars of losses instead of profits. It could easily destroy a company’s share value and cause investors to sell off the stock.

Although it was originally thought that the investigation of backdated stock options was largely relegated to tech companies, which tend to compensate their executives and employees with stock options when they started up in the 1990s and had very little cash with which to pay them, the SEC revealed that the investigation is much broader than anyone had previously anticipated:

Linda Thomsen, the SEC’s enforcement chief, said: “The scheme was blatant. Undisclosed options backdating is an assault on the integrity of public companies.”

She revealed that the SEC was investigating 80 companies across the US, far more than the combined 60 originally thought to be under investigation by both the SEC and the justice department.

Such companies included members of the S&P 500 stock index, and not just technology companies.

Just recently, the Cheesecake Factory – a far cry from a technology company – announced it was checking into its practice of granting stock options. Barnes and Noble said today that the SEC is investigating the company for backdated stock options. If the indictment of Brocade’s top managing executives is any indicator, there is going to be a lot of hurt coming down the road on this. Unlike previous SEC chairman Harvey Pitt, who believes that firms should still be the ones doing the enforcement on themselves (even though he was chairman when the Enron, Tyco, and Worldcom scandals came to light), current chairman Christopher Cox is using fighting words:

The SEC’s Mr. Cox warned that backdating “deceives investors and the market as a whole about the financial health of companies that cheat in this way.” He added, “It is poisonous to an efficient marketplace.”

The punishment for the Brocade executives, should they be found guilty, is a 20-year jail sentence and a $5 million fine.

This is going to be much uglier than originally thought. Apparently, the Sarbanes-Oxley Act wasn’t too much regulation, as corporations have previously complained. The problem was that it was not enough.

(cross-posted at Deny My Freedom and Daily Kos)

Remember November 1, 2005? That’s the day that Harry Reid forced the Senate into closed session over the issue of prewar intelligence in Iraq. The blogosphere was full of love for Senator Reid that day; I even made a trek over to his PAC’s website and dropped a $10.01 donation for his efforts. In his comments, Reid had fighting words for the GOP and their obstruction of the investigation:

Despite the fact that the chairman of Senate Intelligence Committee publicly committed to examine these questions more than a year and a half ago, he has chosen not to keep that commitment. Despite the fact that he restated the commitment earlier this year on national television, he has still done nothing. …

Mr. President, enough time has gone by. I demand on behalf of the American people that we understand why these investigations aren’t being conducted, and in accordance with Rule 21, I now move that Senate go into closed session.

The Senate Republicans were outraged, none more so than their leader, neophyte Bill Frist.

Frist was indignant. As Senate aides shooed visitors from the galleries and shut down C-SPAN’s cameras, Frist told reporters that Reid’s leadership team resorted to a “political stunt” because it had no convictions, principles or ideas. “For the next year and a half, I can’t trust Senator Reid,” he said.

Most Americans had no clue what Phase II was supposed to be, but we all knew what it was after that day. It was supposed to be the beginning of accountability on the Iraq war. It was supposed to be the day that marked the unveiling of the truth, no matter how ugly and how twisted it was.

Eight months later, there’s been no mention of the bipartisan committee set up to deal with this problem. Each day that the silence passes, the more and more Frist’s claim that it was merely a ‘political stunt’ rings true. Harry Reid may speak softly, but he sure doesn’t carry a big stick.
In Daily Kos’ bimonthly approval polls, Harry Reid is doing quite well indeed – he gets a 71% approval rating from a blogosphere that is largely aligned to the left of the conservatively moderate Reid. It’s a far cry from the reception that Reid originally received in the blogosphere – just check out some comments from this diary (my first on dKos) regarding the race for DNC chairman. However, Reid really isn’t better leader for Senate Democrats: despite allegedly being a better leader and having getting Senate Democrats on the same page more often, if one looks at the record…well, you’ll see a lot of disunity within the Democratic caucus, as usual.

Perhaps the most apt place to start out is the bankruptcy bill. This bill arguably harms the lower and middle classes the most. In fact, despite being framed as reform, it didn’t really solve the root of the problem at all.

Illness and medical bills caused half of the 1,458,000 personal bankruptcies in 2001, according to a study published by the journal Health Affairs.

The study estimates that medical bankruptcies affect about 2 million Americans annually — counting debtors and their dependents, including about 700,000 children.

Senator Joseph Biden is widely hated for his support of this bill, even though he probably has the most valid excuse of anyone – the corporations who supported the bill are arguably his constituents (most companies are incorporated in Delaware). This unfair bill that makes it even harder for Americans to shake off the stigma of being penniless was not even a close fight in the Senate – it passed 74-25, and yet nary a word is said about Harry Reid’s vote for it – or the other Democratic senators who voted for it:

Baucus (D-MT)
Bayh (D-IN)
Biden (D-DE)
Bingaman (D-NM)
Byrd (D-WV)
Carper (D-DE)
Conrad (D-ND)
Inouye (D-HI)
Johnson (D-SD)
Kohl (D-WI)
Landrieu (D-LA)
Lincoln (D-AR)
Nelson (D-FL)
Nelson (D-NE)
Pryor (D-AR)
Reid (D-NV)
Salazar (D-CO)
Stabenow (D-MI)

And that’s not even mentioning Joe Lieberman, who pulled his usual act of voting for cloture before voting against the final bill. No, Harry Reid didn’t even put up a damn fight against this bill. If we are going to say we’re the party of the working class, perhaps we’d best vote the way we speak – otherwise, our words will ring hollow. There is no way we can justify this action, which served to benefit credit card companies and other creditors, at the expense of the average American who may have fallen on unlucky times.

Another example of a bill where Reid utterly failed to lead (even though he voted the right way this time) was the Orwellian-named Class Action Fairness Act. This law shifts many large class-action lawsuits from state courts – where plaintiffs have a better opportunity to present their case – to the federal courts, where Republican-appointed judges (after all, they have dominated the presidency, for the most part, since 1968) that are more likely to be pro-corporation can rule on the claims. However, the main point of the law wasn’t to reform the system – it was a way to cut off lawyers, who are largely a Democratic lobby, from a large source of their income. The judiciary is the last bastion of sanity (mostly) in this environment, and once again, we didn’t stand up for the rights of ordinary Americans to stand up to corporations that treat them unfairly. In a 72-26 vote, here are your disloyal Democrats this time around:

Bayh (D-IN)
Bingaman (D-NM)
Cantwell (D-WA)
Carper (D-DE)
Conrad (D-ND)
Dodd (D-CT)
Feinstein (D-CA)
Johnson (D-SD)
Kohl (D-WI)
Landrieu (D-LA)
Lieberman (D-CT)
Lincoln (D-AR)
Nelson (D-NE)
Obama (D-IL)
Reed (D-RI)
Rockefeller (D-WV)
Salazar (D-CO)
Schumer (D-NY)

I will give credit where credit is due – on the issue of privatizing Social Security, Reid had his shit together when it came to this matter. Instead of even allowing for a fair debate, he came out and said right away – in a masterful strategical move that he needs to use more often – that it had absolutely no chance of passing.

“President Bush should forget about privatizing Social Security. It will not happen,” Senate Minority Leader Harry M. Reid (D-Nev.) told reporters. He initially said all 44 Senate Democrats had made commitments to oppose personal accounts. Later, acknowledging he had not spoken with all 44, Reid said: “I don’t know of a single Democratic senator” who will back the plan.

Both parties campaigned around the country on the issue, but at the end, it became clear that we had finally won a battle – but it was a battle that we should have expected to win from the very beginning. Protecting Social Security doesn’t require a leap of faith – it’s common sense. The mere fact that we had to wildly applaud the Democratic Party for finally taking a stand on an issue – one that is taken for granted in America – is a bit pathetic.

Finally, Harry Reid’s greatest failure of all: matters of the judiciary and nomination hearings. As I mentioned above, the judiciary is the last branch of the federal government where some semblance of sanity exists. Despite having ideologues on the Supreme Court such as Antonin Scalia and Clarence Thomas, it was imperative that we ensured that the balance of the Supreme Court would not shift greatly when Bush nominated his replacements. But Reid lost the battle before it even begun – and we will be paying the price dearly long after he leaves the Senate.

Fourteen Republican and Democratic senators broke with their party leaders last night to avert a showdown vote over judicial nominees, agreeing to votes on some of President Bush’s nominees while preserving the right to filibuster others in “extraordinary circumstances.”

The dramatic announcement caught Senate leaders by surprise and came on the eve of a scheduled vote to ban filibusters of judicial nominees, the “nuclear option” that has dominated Senate discussions for weeks. The deal clears the way for prompt confirmation of three appellate court nominees — Priscilla R. Owen, Janice Rogers Brown and William H. Pryor Jr.

Democratic leader Harry M. Reid (Nev.) called the pact “a significant victory for our country.”

Two weeks before, Reid was going to call Bill Frist’s bluff. Instead, he let the ‘moderate’ members of our party cut out his legs from under him, removing any sort of leverage he would have in future battles over judicial nominations. ‘Extraordinary circumstances’ is a word that should live in infamy forever – because you will never get both sides to agree on what that means; it’s merely a way to address the problem without solving anything. And indeed, Democrats didn’t even bother trying to fight John Roberts’ nomination, and on the matter of filibustering Sam Alito – well, it never had a chance. As I wrote last month, this was the showdown that we could not afford to lose – and we didn’t even bother making it a contest.

Reid’s predecessor, Tom Daschle, hardly gets any recognition in the blogosphere; he is widely scorned for abetting Bush’s run to fight in Iraq (even though Reid, whose job it was to line up votes as minority whip, voted for it as well), and some folks even applauded his loss to Republican John Thune. But you know what? At least Daschle didn’t roll over on federal judicial nominations. Bankruptcy bills and ‘tort reform’ never came close to seeing the day of light. And privatizing Social Security wasn’t an issue then, either. I’m not arguing that Daschle was perfect; his inability to get Democrats to oppose the Iraq war resolution was a profile of incompetence. What I am saying is that Harry Reid, for all the accolades he receives, has little to show for it. He definitely talks the talk that the blogosphere likes to hear, but he has rarely walked the walk…and our country continues to be worse off for it.

(cross-posted at Deny My Freedom and Daily Kos)

Our dear leader was finally confronted with a bill that he couldn’t simply sign and disavow with a signing statement. At the ripe old age of 60, Bush was forced to veto a bill supporting federally funded stem cell research.

WASHINGTON (Reuters) – President Bush cast his first veto on Wednesday to block legislation to expand embryonic stem cell research, putting him at odds with top scientists, most Americans and some fellow Republicans.

“It crosses a moral boundary that our decent society needs to respect, so I vetoed it,” Bush said of the research that involves tiny human embryos.

[…]

“I made it clear to the Congress that I will not allow our nation to cross this moral line,” he told a White House audience including women who had children after adopting and gestating “spare” embryos from fertility clinics. “I felt like crossing this line would be a mistake and once crossed we would find it almost impossible to turn back.”

This administration is probably one of the last authorities that can speak about morals, given its abhorrent record with regards to the so-called ‘sanctity’ of human life. However, one should not be surprised by Bush’s decision to veto this bill, despite the great potential they may hold for curing such conditions as diabetes, Parkinson’s disease, and paralysis.

Why? Simply put, it’s another application of the ‘One Percent Doctrine’ that has seemingly governed how this administration rules.
The phrase, coming from the new book of Pulitzer Prize-winning journalist and best-selling author Ron Suskind, moreso applies to the way the Bush administration has gone about dealing with issues of national security. If there’s even the possibility of something occurring – no matter how remote or unimaginable – it must be dealt with. It’s a good explanation for why we continue to waste time on a missile defense system, and Dick Cheney sums it up pretty well in explaining its application to the war on terror:

The One Percent Doctrine takes its title from an episode in late November 2001. Amid fears of a “second wave” attack after 9/11, Tenet laid out for Vice President Cheney and national security adviser Condoleezza Rice a stunning trove of new intelligence, much of which Suskind reveals for the first time: Two Pakistani scientists who previously offered to help Libya build a nuclear bomb were known to have met with Osama bin Laden. (Later, Suskind reports, the U.S. government would discover that bin Laden asked pointedly what his next steps should be if he already possessed enriched uranium.)

Cheney, by Suskind’s account, had been grappling with how to think about “a low-probability, high-impact event.” By the time the briefing was over, he had his answer: “If there’s a one percent chance that Pakistani scientists are helping al Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response.”

While the subject matter in question now – stem cell research – is markedly different from issues of national security, the basic premise remains the same. Bush’s main argument, which he was unabashedly proud to use as a politically exploitative backdrop for announcing his veto, was that embryos that are slated to be discarded could happen to become children one day. No freakin’ shit. However, this explanation conveniently avoids the facts:

Only about 2 percent of the estimated 400,000 frozen embryos wind up being given to other families, according to a 2003 survey by the American Society for Reproductive Medicine.

You can view the entire study here (PDF format) – you might be surprised by the numbers. Indeed, Bush’s justification for blocking funding for studies that could eventually save millions of human lives is that there is a small chance that embryos that are to be discarded end up being used to bring a child into this world. Given that the GOP frames politics in the strict father model, it comes as no surprise that they rationalize their actions on the basis that there’s a small, if unlikely, chance that something will come to pass. For someone who has touted purveying a culture of life, he has failed miserably on that count. This was a chance to act in a manner that was veritably pro-life – but that damn 2% got in the way.

(cross-posted at Deny My Freedom and Daily Kos)

It must be a strange day to be George W. Bush. He’s just returned home from a summit where he was verbally smacked down by Russian president Vladimir Putin in front of an adoring media. For a person who’s not fond of being exposed to opposing opinion, one has to wonder why he chose 2006, of all the years of his administration, to finally address the NAACP.

Presidential spokesman Tony Snow said Bush decided to speak to the group Thursday because of “a moment of opportunity” for the president to tout his civil rights record and mend fences.

“He has an important role to play, not only in making the case for civil rights, but maybe more importantly, the case for unity,” Snow said. “Because as long as we have a nation that’s in any way divided along racial lines or where politics become a source of division rather one of civil debate and trying to perfect the democracy, that’s a problem.”

Such an Orwellian statement makes one contemplate what kind of bullshit Bush’s speechwriters will cook up for this event.
To be fair, Julian Bond, the chairman of the NAACP, has been a staunch critic of the president. The former president and current MD-Sen candidate, Kweisi Mfume, only met Bush once in the 9 years he was president. Bruce Gordon, the current president of the NAACP, made a more concerted effort to get Bush to speak at the convention, and apparently, he has succeeded. But what kind of progress is Bush going to present to them? The fact that his party held up debate in the House isn’t a good step – and it’s arguably the most that the GOP has done for African-Americans while controlling the government the past 5 1/2 years.

Consider that the Bush administration publicly denounced affirmative action, even though the president was himself a product of that system, albeit the kind that we don’t need more of – legacy. How about the fact that his tax cuts have done nothing to help out the lower and middle classes, even though demographic data shows African-Americans to be predominantly in those income brackets? What about his pathetic response to the onset of Hurricane Katrina, and the federal government’s treatment of displaced residents, the vast majority who are African-American? Maybe someone should show Bush this poll to remind him of just how unpopular he is with this particular demographic:

In what may turn out to be one of the biggest free-falls in the history of presidential polling, President Bush’s job-approval rating among African Americans has dropped to 2 percent, according to a new NBC/Wall Street Journal poll.

Those numbers haven’t gotten much better since that lowest of lows. In one of his more lucid articles, New York Times ‘reporter’ Adam Nagourney chronicles the Republican Party’s utter failure to create much of a shift in the political makeup of African-Americans.

But as Mr. Bush is tentatively scheduled to speak at the N.A.A.C.P. convention in Washington this week — after five years of declining to appear before an organization with which he has had tense relations — it seems fair to say that whatever the motivation, the effort has faltered.

[…]

That perception of Republicans as insensitive to racial issues was fed again by the opposition mounted by some House conservatives to an extension of the Voting Rights Act. The House approved the extension last week.

“I have heard Ken Mehlman talk about the Republican Party as the party of Lincoln,” said Bruce S. Gordon, the president of the N.A.A.C.P. “I have not seen that evidence itself as much as Ken would suggest. If the party wishes to reflect the principles of Lincoln, it has a long way to go.”

As RNC chairman, Ken Mehlman has made it a point to do more outreach within the African-American community. Most of their hopes, rightly or wrongly, seemed to be set on playing up – surprise! – socially divisive issues that may find more support amongst African-Americans, who are more socially conservative than most Democrats are. However, even JC Watts, the former GOP African-American congressman from Oklahoma, dismissed his party’s strategy.

At the same time, Republican strategists have appealed to socially conservative blacks by emphasizing social issues like same-sex marriage.

Mr. Watts, the former Republican congressman, called that a “lame strategy” and said the top concerns of African-American voters were racial and economic issues.

“It’s a little bit insulting to all those pastors out there and people who stand with the party on the social issues,” Mr. Watts said, when the party then does “nothing” to help blacks on opportunity issues.

Mr. Watts, you might want to apply that statement to the entire administration and your party in Congress for all races – unless you have money, they are not concerned about giving you more opportunity.

Democrats shouldn’t take the African-American vote for a given. We need to continue to show a commitment towards reaching true equality amongst all Americans, be they white, black, Hispanic, and so forth. Our congressional platform for the fall, A New Direction for America, addresses a lot of these issues of opportunity – increasing the minimum wage and making college more affordable, to name a couple. However, it’s important that we don’t forget that there are still inequalities in today’s society, and we must be vigilant in protecting the progress that has been made – progress that the right wing so eagerly wants to set back.

It won’t be happening soon, though. One only needs to look at Mehlman’s poor math skills to understand.

“As I said from the day I started this,” Mr. Mehlman said, “there are going to be ups and there are going to be downs — this is going to be a difficult process. It took the Republican Party 40 years, since 1964, to get 8 percent of the vote.”

He evidently doesn’t want to remember the time before 1960, when African-Americans used to support the Republican Party because it was the party of Lincoln, not because it said it was.

As for Bush? One can only imagine the reception he’ll get from this crowd after the unwelcome reception that greeted him at Coretta Scott King’s funeral.

He’ll be facing the music, that’s for sure.

(cross-posted at Deny My Freedom and Daily Kos)

One of the good things about my job over the summer is that I get exposed to just about everything going on in the world. Today, I was reviewing a company in the business of recycling electronics – and it opened my eyes as to just how big this problem really is. One reason the issue doesn’t get much visibility is because we never see much of it to begin with.

For years, developed countries have been exporting tons of electronic waste to China for inexpensive, labor-intensive recycling and disposal. Since 2000, it’s been illegal to import electronic waste into China for this kind of environmentally unsound recycling. But tons of debris are smuggled in with legitimate imports, corruption is common among local officials, and China’s appetite for scrap is so enormous that the shipments just keep on coming.

In Taizhou’s outdoor workshops, people bang apart the computers and toss bits of metal into brick furnaces that look like chimneys. Split open, the electronics release a stew of toxic materials — among them beryllium, cadmium, lead, mercury and flame retardants — that can accumulate in human blood and disrupt the body’s hormonal balance. Exposed to heat or allowed to degrade, electronics’ plastics can break down into organic pollutants that cause a host of health problems, including cancer. Wearing no protective clothing, workers roast circuit boards in big, uncovered woklike pans to melt plastics and collect valuable metals. Other workers sluice open basins of acid over semiconductors to remove their gold, tossing the waste into nearby streams. Typical wages for this work are about $2 to $4 a day.

Electronic waste, or e-waste, is fast becoming an ecological nightmare in this era of rapid technological growth.
It’s difficult to find numbers on a problem that has largely been swept under the rug, as the Salon article above mentions. In 2000, the U.S. created over 2.1 million tons of e-waste, a figure that has surely become higher with our technological advances in recent years. All sorts of devices – personal computer, cell phones, televisions, refrigerators – you name it, and if it’s an electronic device, it probably counts as e-waste. These products contain several harmful substances that can be severely harmful or fatal to humans if we are exposed to it for extended periods of time. If you still have one of those big, box-like CRT monitors, the glass in the screen is composed of 25% lead – necessary to block the radiation from the cathode ray tube that brings your monitor to life. Cadmium comes in semiconductors which are omnipresent within computers and cell phones. Mercury is present in many everyday-life objects. Much of what we use today is a danger to the environment if not disposed of safely.

The dangerous toxins within many of our electronics is the reason why these materials need to be recycled, not simply thrown away in a landfill. The leaking of these chemicals has a devastating effect on the surrounding environment:

Poisonous waste creeps into skin and lungs and seeps into the land and water: Guiyu’s soil contains 200 times the level of lead considered hazardous; the drinking water is 2,400 times over the World Health Authority (WHO) lead threshold. “We found a cyber-age nightmare,” says Puckett. “They call this recycling, but it is really dumping by another name.”

In 2000, 4.6 million tons of e-waste was disposed of in landfills in the U.S. That’s more than 2 times the amount of e-waste that was produced in the year. This high rate of turnover is certainly worrisome, and many of the other disposal methods are not better. Incineration releases dangerous chemicals into the air, and reusing the products merely prolongs the dumping of the electronics. One of the biggest problems, though, is that much of the e-waste that is produced is exported to foreign countries, particularly China, India, along with the African continent. This does nothing to solve the problem; instead, it makes the developing world our dumping grounds. Despite it being in violation of international law and China’s ban on the practice in 2000, it continues to this day due to corruption in the developing world and of lax enforcement policy in the developed world.

From the Salon article:

The EPA estimates that only about 10 percent of all obsolete consumer electronics are recycled. The rest are stored somewhere, passed on to second users, or simply tossed in the trash.

Your end result looks something like this. Here’s a picture from an e-waste dump in Africa.

Photographs taken by BAN in Lagos show scrapped electronics lying in wetlands, along roadsides, being examined by curious children and burning in uncontained landfills. Seared, broken monitors and CPUs are nestled in weeds, serving as perches for lizards, chickens and goats. One mound of computer junk towers at least 6 feet high. Puckett found identification tags showing that some of the junked equipment originally belonged to the U.S. Army Corps of Engineers, the Illinois Department of Human Services, the Kansas Department of Aging, the State of Massachusetts, the Michigan Department of Natural Resources, the City of Houston, school districts, hospitals, banks and numerous businesses, including IBM and Intel.

To face this problem, the Basel Convention was convened to discuss the problem. Its stated goal was to reduce movement of hazardous materials between countries, particularly the one-sided movement from industrialized nations to developing ones. However, it should figure that, just like with the Kyoto protocols, the United States is the only industrialized nation to have not ratified the Basel Convention’s treaties (the only other countries to have signed but not ratified it are Afghanistan and Haiti). Once again, our country has continued to show a lack of leadership on environmental issues. On the other hand, the European Union has instituted WEEE, short for Waste Electrical and Electronic Equipment. It specifies that manufacturers must accept returned items and dispose of them properly, as well as manufacturing electronics that removes many of the toxic elements that compose many of our technologies today.

Although Europe still must deal with the problem of the illegal exporting of such materials, they have made more progress than we have on the issue. Observe how our government disposes of its used electronics:

Much of the federal government’s used but usable computer equipment (including cellphones) is placed with another government agency or donated to a school or community nonprofit (usually chosen and vetted by an individual agency office). The rest (the exact numbers are not known) goes to the General Services Administration — the agency that deals with the procurement, use and disposal of government property — for public auction. State governments work similarly, usually through state surplus property offices or equivalent programs. No one I consulted had any estimate of how many computers state and local governments discard annually. What was clear is that the ultimate fate of significant quantities of government electronics is poorly documented.

[…]

The GSA keeps records of who’s bought equipment, but does not track what happens to equipment that’s been sold, nor does it ask buyers why they’re purchasing the electronics. “Why would we?” asks a GSA staffer in Boston. The result is that at both the state and federal level, large quantities of electronics are purchased by brokers, auctioneers and individual dealers who often sell the equipment for export.

In effect, America has continued to enable the exports of e-waste. Without any sort of accountability, our used computers from our school systems can end up in dumps halfway around the world (the Salon article details this in more depth).

However, states have begun to take action while the federal government ignores the problem. Four states – California, Maine, Maryland, and Washington – have passed legislation that promotes the recycling of e-waste, and several other states are currently considering bills that will confront the problem of disposing of e-waste. Efforts in Congress have been stalled by the GOP-controlled body, despite the bipartisan nature of the legislators pushing for it. In the House, Democrat Mike Thompson of California has been in the lead, along with Louise Slaughter (D-NY), Mary Bono (R-CA), and the now-disgraced ex-congressman Duke Cunningham (R-CA). In the Senate, Senators Ron Wyden (D-OR) and Jim Talent (R-MO) have introduced a comprehensive plan to create a national recycling program, but there has been no further movement on the issue.

The current focus of environmental policy is focused on global warming, in large thanks to Al Gore’s An Inconvenient Truth. However, our country needs to address another truth, one that will become tangibly more visible as we develop new technologies: e-waste is a growing menace, and if left unchecked and unregulated, it could cause irreparable harm to the environment around us. Just as Gore says about alternative energy, instituting a recycling policy will not cost corporations more – in fact, it is a very profitable business. The secondary products produced from recycling, such as glass, can be used easily by other companies in their products.

Political will is indeed a renewable resource. Let’s make sure that our representatives find it when it comes to this issue.

(cross-posted at Deny My Freedom and Daily Kos)

The collapse of the so-called New Economy came furiously and quickly at the end of the 1990s. While its demise was largely characterized by the demise of the dot-bomb startups, it was the ugly accounting scandals of large companies like Enron, Worldcom, Tyco, and many other firms that truly underpinned the ‘irrational exuberance’ of the economy during the Clinton years. It led to the Sarbanes-Oxley Act, a law that required more stringent oversight of the accounting done within each firm.

At this juncture, most people would like to believe that enough regulation is in place. Firms regularly complain about how Sarbanes-Oxley is unnecessary and that it is extremely costly to implement, particularly for smaller firms that do not necessarily have the working capital to pay for such measures. However, there is the rise of another accounting scandal on the way – and it is going to get uglier before all the dirty laundry is aired. This time, it’s about backdating stock options.

The list of companies being investigated in the stock-options saga grows longer by the day and could easily climb much higher, according to the professor whose research brought the issue to light.

More than 50 companies are being investigated by the Securities and Exchange Commission and federal prosecutors over whether they “backdated” or otherwise manipulated the dates they granted stock options to employees to make the options more lucrative, according to Reuters.

Why is this a big deal? To begin with, I’ll begin with a review of what exactly stock options are and how they are used in compensating executives.
There are two basic types of stock options: there are calls and puts. Calls give the owner of the call the right to buy a stock at a pre-determined price, also called the strike price. Therefore, the owner of a call would like the price of the stock to appreciate – if it goes above the strike price, the person can make a profit by exercising the option, buying the stock at the lower price and selling it at the higher market price. Puts give the owner the right to sell a stock at the given strike price. Owners of puts want the stock price to depreciate; therefore, they can make a profit by selling the stock at the strike price and re-buying the stock at the lower market price. Whenever you see stock options in the frame of executive compensation, they are always talking about call options – the firm and the executives will benefit if the stock price goes up, which is why corporate executives are brought on to begin with.

In the 1990s, there was a move away from paying corporate executives in cash to paying them in the form of equity – whether it be stock, or, as has become more prevalent in the last decade, in stock options. The theory behind this move is that corporate executives are supposed to maximize shareholder value (another debate in and of itself); therefore, it would be better to compensate them in a form that aligns the motives of the executive (to make a higher salary) with that of the shareholders (to make money on their investment). Most of the time, options are priced ‘out of the money’ – that is to say that on the day that stock options are granted, the market price of the stock is below the strike price. This provides further incentive for executives to do a better job, thus making the stock price rise above the strike price and making the option ‘in the money’.

This brings us to the current scandal of backdating stock options. In the recent months, it’s been uncovered that several firms have apparently granted executives stock options on days when the stock price of their firms was at a periodic low. Let’s take Broadcom, a semiconductor and communications company, as an example.

As you can see, the options in question were granted at a quarterly low. Essentially, this means that there was a much larger upside potential for the executives to make a profit once the stock price inevitably rebounded. As the term implies, backdating means that the options granted to these corporate executives were not actually given to them on that date; instead, they were granted at a later date but were booked as having been granted at the earlier date. By stating that these options were granted at a time when the stock price was lower, this also means that there is a larger difference between the strike price and the market price of the stock, lowering the intrinsic value of the options (options traded in the market are usually valued with a formula known as Black-Scholes. However, as jwb points out, incentive options such as these have no real value, as they cannot be freely traded). Because the value of these options is lower, a lower stock-based compensation expense has to be listed in the financial statements of the firm – and this is where the accounting link is. The end result is that a company’s income is higher than it should be, and corporate executives get richer by manipulating the date at which the stock options were granted.

To imagine what the effects of such a restatement might be, let us return to the Wall Street Journal’s article on Broadcom:

Broadcom yesterday said its stock option accounting problems primarily relate to a grant of 8.5 million shares awarded May 26, 2000. At the end of that day, shares were trading at $78.917, a quarterly low. Over that summer, the stock would top $180. The company said that, although the option pool was “set aside” on May 26, “allocations to individual recipients were not completed until the summer of 2000.”

The company said none of those shares has ever been exercised and that “substantially less than 1% of those options remain outstanding.” The company said that it has identified “a few additional instances” of timing issues related to grants made in 2000 to 2002. Though it said the magnitude is expected to be less, “the adjustments could be substantial.” The company said it is expected to restate for the years 2000 through 2005 and the first quarter of 2006.

The $750 million hit to Broadcom’s bottom line is a blow to a firm with 2005 revenue of $2.7 billion. From 2000 through 2005, its annual bottom line has ranged from net income of $412 million last year to a net loss of $2.7 billion in 2001. The company said the charges were noncash and wouldn’t affect its financial condition, shareholders’ equity or previously reported revenues.

Consider that the Enron’s share price collapsed in large part due to a $1.2 billion writedown due to the illegal partnerships the company was involved in. $750 million is nothing to sneeze at. Furthermore, this is not just an isolated problem. Apple has found ‘irregularities’ relating to their practices of granting stock options. Microsoft recently revealed that it gave employees the ability to be granted options at monthly lows – for a seven-year period. Even though the firm already wrote off the costs in 1999, executives continued to have the ability to be given options at monthly lows. The original CNN article states that at least 50 companies, most being tech firms, are currently being investigated – Monster, Sycamore Networks, RSA Security, and Marvell Technology Group, are a few of these companies facing SEC scrutiny over their practices of granting options.

Why do I say it’s going to get worse before it gets better? For one, there has been a domino effect when it comes to investigating this latest scandal; firm after firm has been forced to voluntarily investigate itself or to respond to SEC inquiries, and it does not look like it will be slowing down any time soon. Even bigger, though, is the news that federal prosecutors are beginning to investigate the matter themselves:

The top federal prosecutor in San Francisco has formed a task force with the FBI to investigate whether Bay Area companies and executives fraudulently backdated stock-option grants.

The move by U.S. Attorney Kevin Ryan is the first public announcement of a dedicated probe into a financial scandal that has swept up more than 60 companies, at least 25 of them in the Bay Area.

[…]
“We will investigate whether individuals and companies may have deliberately backdated stock options with the intent to defraud,” Ryan said Thursday afternoon at a news conference in San Francisco.

Here’s a list of some of the companies being investigated – and keep in mind that this is only companies in the San Francisco area.

They include Altera of San Jose, Applied Micro Circuits of Sunnyvale, Asyst Technologies of Fremont, Cnet Networks of San Francisco, Equinix of Foster City, Foundry Networks of San Jose, Intuit of Mountain View, Linear Technology of Milpitas, Maxim Integrated Products of Sunnyvale, Openwave Systems of Redwood City, Power Integrations of San Jose, Redback Networks of Sunnyvale, VeriSign of Mountain View and Zoran of Sunnyvale.

As the article mentions, backdating itself is not necessarily illegal (if not an ethical practice to begin with). However, if there is demonstrable evidence that there is a fraudulent attempt to take advantage of the system or an attempt to hide the practices, there is the possibility of securities fraud and wire fraud charges. However, one would have to be the ultimate optimist to believe that it’s merely a coincidence that options happened to be dated at cyclical lows and furthermore, the fact that dozens of firms are now revealing this information means that there was not an attempt to hide this practice.

Finally, some believe that this may not be the only thing that is uncovered by these inquiries into backdating:

“I don’t think the stock market realizes how big this problem really is,” said Randall Heron, an Indiana University associate professor of finance whose research into deceptive option awards helped focus attention on the issue. “If people were willing to push the envelope in this area of accounting, it’s possible these investigations are going to dig up other skeletons in the accounting closet.”

Accounting is a highly discretionary tool that can be easily manipulated to portray the financial results that a firm wants outsiders to see. I have no doubt that if entire firms were audited by the SEC and other regulatory agencies, some very unpleasant things would be uncovered. So grab your popcorn if you will – because we’re only scratching the surface on what is clearly being shown to be a widespread practice of backdating stock options, and it’s going to be a long time before this mess is cleaned up.

(cross-posted at Deny My Freedom and Daily Kos)

[Russian president Vladimir] Putin pounced on the reference to Iraq. “We of course don’t want to have a democracy like the one in Iraq, to be honest,” he deadpanned, to laughter from Russian-speaking listeners.

Upon hearing the translation of Putin’s remark, Bush interjected: “Just wait.”

-from Reuters

The current occupant of the White House is not someone that would probably be described as patient. Indeed, with the exception of rushing to invade Iraq, ensuring that his party’s leadership in Congress brings up divisive social issues biannually, and continuing tax cuts for the wealthy that we cannot afford, the Bush administration and the Republican Party have been quite content to take its merry time doing anything of substance for America. What’s our strategy for winning in Iraq? Apparently, it’s waiting. And a good deal waiting in Iraq has done us, considering that the country is devolving into civil war.

Mr. Bush, perhaps if you bothered to step outside of your bubble for a moment or two, you’d see what your ‘waiting’ has done for the country.
It’s led to the deaths of 2,547 American soldiers in Iraq.

It’s led to an increasingly hostile North Korea launching missiles, threatening to destabilize East Asia.

It’s led to the rise of a hard-line Iranian president and yet another showdown at the UN Security Council over a country with the potential to possess weapons of mass destruction.

It’s led to the recent hostilities between Israel and Hezbollah, leading the Arab League to declare that the Middle East peace process is dead.

It’s led to a global war on terror that has no end in sight.

It’s led to the deaths of thousands due to the inability of the federal government and FEMA to respond at any reasonable time.

It’s led to the unfathomably slow rebuilding of New Orleans.

It’s led to the outsourcing of American jobs overseas, and manufacturing is projected to lose 5.4%, or 777,000 jobs, by 2014.

It’s led to an increase in the number of Americans without healthcare, rising from 39.8 million Americans to almost 46 million.

It’s led to a planetary crisis on global warming, an issue that the GOP will not bother with.

It’s led to an ever-increasing national debt, undermining our economic stability and security.

It’s led to rising costs for students attending college like myself.

It’s led to record prices for gasoline, which in turn has begun to negatively affect consumer spending.

It’s led to a halt of scientific progress in the search for cures to diseases and disabilities that have no known remedies.

It’s led to a burdensome education law that is underfunded and serves to make our public schools worse.

It’s led to an illegal wiretapping program by the NSA, an intrusive financial tracking program, and countless other violations of our basic civil liberties.

“A complacent satisfaction with present knowledge is the chief bar to the pursuit of knowledge.”

–Anonymous

We’ve been waiting long enough for Bush to change the course. Staying the course is not a plan. For a long time, Democrats have had enough, but now the rest of the country is finally seeing the truth.

Mr. Bush, your time is up.