Arianna Huffington
The SEC goes AWOL
Chairman Harvey Pitt is as bold a Wall Street watchdog as Scooby Doo.
You know things have really gotten out of hand when the most scathing attacks on corporate greed and Wall Street malfeasance are being launched not by knee-jerk business haters and anti-globalization Jeremiahs but from the glittering towers of corporate America.
Surveying the view from his No. 2 perch on the Forbes 400, Warren Buffett, the grand pooh-bah of American capitalism, opened fire with both barrels this month when he told an audience of more than 10,000 Berkshire Hathaway shareholders that Wall Street loves a crook, investment bankers don’t care about investors, stock-option-engorged CEOs are shameless, and American business is teeming with fraud. Come on, Warren, tell us how you really feel.
With big business in such a sorry state, what we need more than ever is a courageous crusader at the helm of the Securities and Exchange Commission, someone who will do everything in his power as America’s top securities cop to root out corporate corruption and restore the public’s trust.
Instead, we have Harvey Pitt, a chairman so ineffectual and compromised that immediately after his commission adopted a set of feeble, industry-generated ethics rules for stock analysts last week, he turned around and said: “One of the questions we must ask ourselves is whether these proposals have teeth and bite.” Isn’t that a question he should have asked before rubber-stamping the toothless, biteless regulations?
Pitt is the wishy-washiest watchdog since Scooby-Doo.
Now I really hate to say I told you so (actually I don’t hate it; I love it — after all, honesty should begin at home), but back in December this column called for Harvey Pitt to resign before the year was out on the grounds that naming as the SEC chairman a person who had made a career out of butting heads with it was a little like naming Osama bin Laden to run the Office of Homeland Security.
Since then Pitt has done everything in his power to prove me right. He spinelessly coddled his old pals in the accounting industry, allowing them to continue to double-dip as highly paid consultants, took halfhearted sloppy seconds on the New York attorney general’s probe of Wall Street stock shenanigans, and raised the red flag on conflicts of interest by holding meetings with former clients currently under investigation by the SEC.
Forget corporate watchdog: How about corporate lapdog?
Pitt’s mishandling of the job comes at the very moment when the average shareholder desperately needs a champion. In a recent letter to his shareholders, Buffett described himself as “disgusted by the situation, so common in the last few years, in which shareholders have suffered billions in losses while the CEOs, promoters and other higher-ups who fathered these disasters have walked away with extraordinary wealth. To their shame, these business leaders view shareholders as patsies, not partners.”
Last week, the recognition that the SEC was failing in its “primary mission” — which is, as its own Web site boasts, to “protect investors” — led even the Wall Street Journal and London’s Financial Times to finally join this solitary Greek chorus and call for Pitt’s ouster.
The Journal ended its biting editorial by deriding the White House’s ludicrous claim that Pitt was doing “a great job getting tough on corporate misconduct”: “We doubt,” read the editorial, “anyone at the White House really believes that. At least we hope they don’t; because no one anywhere else does.”
I’m not even sure that Pitt believes it. Indeed, when I saw him 10 days ago at the White House Correspondents’ Dinner, I asked him what he thought of the latest wave of corporate misconduct stories. “There is no doubt,” he told me with confidence, “that we need to find out if some companies went too far.” Find out if some companies went too far? Gee, Harvey, are you sure you want to go out on a limb like that?
Talking to Pitt about corporate greed is a lot like talking to Cardinal Law about pedophile priests. It’s crystal clear that these guys just don’t get it.
Let’s hope that Washington proves more responsive than the Catholic hierarchy. Perhaps the outrage coming from Buffett and the other holy fathers of the free-market faith will serve as a wake-up call to those charged with cleaning up post-Enron America.
But I wouldn’t count on it. It’s really not in Harvey Pitt’s DNA to even notice the stink wafting up from the corporate sewer, let alone get down into the muck and clean it up.
Unreality TV
It's become painfully obvious that the only enemies Rumsfeld can defeat are the straw men he creates in his mind. It's time to cancel his show.
If you could distill this administration down to one single thing, it would be this: a complete inability — indeed a pathological aversion — to changing course, even when the current course is taking us over a cliff.
Combine that with rank incompetence, and you’ve got quite a potent — and deadly — combo. It was on full display last night during the president’s speech on Iraq and last week during Donald Rumsfeld’s multiple public appearances.
First the president’s speech.
Continue Reading CloseJudging what’s news
When the major networks cover stories like the Michael Jackson trial instead of the Downing Street memo, just click the remote.
I was thinking a lot over the weekend about the news and about how the news becomes the news, and then I read Jay Rosen’s brilliant take on the Downing Street memo coverage. Rosen elaborates on Josh Marshall’s assertion that “news stories have a 24-hour audition on the news stage, and if they don’t catch fire in that 24 hours, there’s no second chance.” Rosen’s theory is that blogs have become the news cycle’s appeals court, and that the Downing Street memo story is still alive because it won on appeal. And thank God.
Continue Reading CloseWhere are the Democrats?
A majority of Americans say the war in Iraq hasn't made the U.S. safer. Why aren't more Democrats demanding that the White House develop an exit strategy?
“What Korea was to Truman, and Vietnam was to LBJ, Iraq will be to George W. Bush,” Arthur Schlesinger told me last week. In all three cases, the public grew weary of a drawn-out war with no end in sight. History shows that there is nothing sacrosanct about wartime presidents. There is no guaranteed immunity for them. Rally round the president when the nation is at war is the American tradition — but only for a time. The Korean War forced Truman to pull out of the 1952 race. Vietnam forced Johnson to pull out in 1968.
Continue Reading CloseMaking Mehlman more comfortable
Tim Russert lets RNC chair Ken Mehlman dodge the Downing Street memo, blame the deficit on 9/11, and "respectfully disagree" with criticism from his own party.
Sunday’s “Meet the Press,” featuring RNC chair Ken Mehlman, was another classic example of why host Tim Russert is fast becoming journalism’s answer to the E-ZPass, that electronic tag that allows drivers to go through toll booths without having to stop. On the show today, Mehlman was allowed to distort, twist, manipulate, obfuscate and “disassemble” his way through every stop on the disinformation highway.
The key to the E-ZPass method is no follow-ups — or lame follow-ups quickly abandoned. And Mehlman is a master at dealing with those. His technique? Just repeat or slightly rephrase his talking point, and trust that Russert will give up, wave him on, and proceed to the next prepared question.
Continue Reading CloseIraq: The next Democratic battlefront
With the situation in Iraq at its bleakest, it's time for Democrats to do battle with Republicans.
Now that the Democrats have won the battle over the nuclear option (or, at least, come away with a tie), they need to turn their attention to what it will take to become more than a minority party that wins a fight every now and then. They have been surprisingly successful at battling Bush’s domestic agenda, but if they’re going to broaden their appeal, they first have to broaden their battlefronts to include Iraq.
After John Kerry lost in November, the conventional wisdom was that he hadn’t been “me too” enough about Iraq. But the truth is the exact opposite.
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