God love Enron. No one else does.

For a while, I held out the vain hope that the Enron scandal would be the means of bringing down the Smiler's administration. That lasted until it turned out that a) the Democrats had accepted 10 grand in campaign money, and b) I remembered that Democrats, unlike Republicans, do not have that much experience in sucking the blood of the opposing party, causing chaos and gridlock. But I can dream - of a world where accepting campaign money does not automatically put one on the same level as a person (Call him Dick Cheney, say. Don't know why.) who actively aided Enron in their amazing financial snake dance.

I honestly find it funny that the various Big Five accounting firms were rejoicing at the fate of Andersen - until they realized that they had done just such dubious accounting schemes themselves. I mean, seriously folks, the idea that Enron was hiding their debt under an amazing paperchase should not be quite as earthshattering as it was. After all, what do you think the US economy is built on?

Debt. Governmental debt. Massive governmental debt. Yet we still had a 'surplus' this year that would allow everyone to get a tax refund. Never mind that the national debt is in the TRILLIONS of dollars, the Smiler wants to be reelected in 2 years and didn't know at the time (yeah, right) that bin Laden was going to start the rhubarb. The answer is that the US economy is built on exactly the sort of paperchase, found a) in the stockmarket and b) Congress, that Enron came up with.

But this time I'm not directly skewering the government. Instead, I'd like to take a look at the stock market, using laymen's terms that could be understood by a C-average Yale student, say.

Basically, the investor in the stock market plunks down a wad of theoretical* money, in exchange for a piece of paper that says that they will get thus and such profits on their theoretical money, should the company issuing the very-real paper theoretically make a profit. In other words, you're paying money to a company on the hopes that it will make money. Other than yours.

The company does this through several means. It develops something (DOS, say) that many, many people and industries want and are prepared to pay a large amount of money for. It promises to generate a profit sometime after it manages to figure out how to sell books online. Or - the Enron way - it lies about its profits, vastly overinflating them. All of these have the salubrious effect of causing others to buy the stocks, causing the value of the shares, including yours, to go up. You get money, go to the bank, invest the money, get killed in a car crash on the way home, and your heirs are happy people indeed.

The key to all this - and the part that makes me extremely wary of investing in the stock market - is the idea of "consumer confidence". The way I understand this, is that, basically, the people who've theoretically paid money to the company, if they get scared at the reports on the company, will sell their shares to someone else, getting out hopefully before they lose their shirts.

The idea of trusting my money to a group of people who can be made very, very nervous on the basis of unfounded rumors is not one to make my day bright and shiny. I do not trust the idea of consumer confidence, largely because a) I don't trust people, let alone concepts concerning people anyway, and b) companies such as Enron can lie about their profits to keep Enron's stock value high, or the case of (I think) a genetics outfit a few years back, where their competitors illegally spread a rumor about the company, causing the shares to drop like a lead life preserver. Consequently, I don't see why I should assume that the stock market and its assorted investors, all invested with consumer confidence no doubt, guarantees the safety of my money, which, since we don't live in Communist Russia, is in fact my money, and I want it all, thanks. In fact, this is the problem that I have with the Smiler's idea of social security reform - we might as well take the pensions that we've been working on building up over the years, going to Vegas, and hitting the slot machines. Good plan.

So basically, if you invest in the stockmarket, which is not my idea of a good time, you're trusting that the other cattle who've invested will not be misled by false rumors, the employees of the company you've invested in are not engaged in off-balance-sheet accounting, and - joy of joys - that there's not going to be a revaluation of the dollar in regards to other currencies. And looking at the Smiler's tax plan from here, I'm inclined to think that there might be. New meaning to the phrase "fuzzy logic", folks.

So now, with this tax plan that the Smiler has unveiled (guess I will be skewering the government after all) we're back to deficit spending, in a big way. Socially, spending is going up 2%, down from an average of 7% under Clinton, and the defense spending - including homeland security, not that you assumed that wasn't included; I just like to say homeland security - is the largest since Reagan. Now, Reagan's spending included slashing the tax cuts he planned to make.

The Smiler's plan includes an insane number of people paying the AMT tax. This tax assumes that you make a certain minimum and have to pay the tax, rather than claiming that you have 15 children and are a registered non-profit charity anyway. Never mind that this tax is aimed at making the wealthy pay SOMETHING, now the tax is going to apply to people who shouldn't be in the tax bracket that qualifies for AMT.

The decline of the middle-class-aristocracy is an entire different subject. Let's just let it stand that, in the wake of the stockmarket/dotcom bubble of the late nineties, there are fewer people who should qualify to pay AMT. Because in modern America, the income gap is widening at a frightening rate. The rich are getting richer, the poor are getting poorer, and the upper middle class - a group to which I've firmly considered myself to belong to, at least when living with my parents - is disappearing. This group of people has to go somewhere. And yeah, some of them made it into the big leagues on the stock market. But a lot of them didn't. America has a debt rate of something like 118% of personal disposable income. This is an average.

This means a lot of things. Number 1, consumer spending is at an all-time insane rate. (Frighteningly, the British, Japanese, and Germans all average a higher percentage of credit card debt.) Number 2, there are fewer people with the money - if only because it's committed to making minimum monthly payments - to pay the AMT. Number 3, the Smiler's tax plan seems to be along the lines of an entire exercise in off-balance-sheet accounting. I repeat what I said in an earlier rant - Texas was glad to get rid of him, simply because it meant that he couldn't fuck up their state anymore. And his idea of "accounting" was one of the problems. Yay.

Back to Enron (before I turn into Linda Blair and need an exorcism). I don't think that the company should be considered to be the lone black sheep in the fold. I do think that there needs to be a serious reevaluation of accounting procedures, but I also think that this is exactly the sort of crap that we can expect from any multi-national organization. Because they exist to make a profit. And to make a profit, they will tell any lie they have to. After all, Kenneth Lay was making his money off of Enron's profits, and if the profits were reported as higher, the cattle in the stockmarket would buy more of the stock, thereby making his piece of the pie even larger, and on and on in a vicious circle. Although I doubt Lay thought it was vicious at the time.

So...murder, lies, false profits, pollution of other countries, wholesale governmental purchase, lap dancing...all the perks of corporate life.

I don't think that Enron's the only one, Dorothy.

Getting ahead in the lucrative field of artist management,

Channon

*If you think your money is backed up by anything real, or that you could even have all your money, you're insane. The gold that used to back up the money was sold off in the 1970's, I do believe, and our vastly-overinflated money is no longer tied to anything real. And credit cards are only assisting in this - now the money is just a bunch of ones and zeros (look for a later rant on the illegality of cash). In fact, if you and all your friends wanted "your" money out of the local bank, you would precipitate a run on the bank, where many people would not get their money, since it doesn't exist - the government doesn't like the inflation that tends to follow when massive amounts of actual paper-or-metal money are dumped into the market. Then a panic starts, the economy collapses, looting and rioting occur, the weak are killed, the smart save the bodies for when we run out of food - since grocery stores have, at most, a week of stock and generally less - and the population hits the "knee" of the Malthusian curve, where there are more people than the available food supply can feed, drops like a rock, and, if we're lucky, the whole thing pulls out with enough people to sustain civilization but not to rebuild it to the point where we can spend theoretical money on stocks again. Oh, and the best part about being American - you can bet if that happens, the only people who could help us out will be in a tailspin too. But as long as you could keep raiders out, you'd get to keep your house free and clear. And I didn't even mention guns. Don't forget to write if you find food.