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Okay time to say

Okay, time to say it: Who's the big winner in all this? The Democrats? Way too general. It's Al Gore.

Consider just a few of the many reasons ...

1. The first is the simplest. The 2000 election and a possible 2004 rematch are zero-sum games. What hurts Bush helps Gore. This hurts Bush so it helps Gore.

2. Gore ran on a people versus the powerful, anti-corporate-wrong-doing message. That sounds pretty good right now. And it would give Gore a strong 'I told you so' theme to go along with attacks on the various other ways Bush has run the country into the ditch. But wait, you say! Shrum just told him to say that. He never really believed any of that populist stuff. Well, I never really bought into that cynical read. But say you're right. Who cares? He still said it.

3. In 2000 no one doubted that Al Gore was experienced and competent. But it almost ended up being a liability. People just never warmed to him. And they liked George W. Bush. Right now, who you'd rather hang with at the barbecue just doesn't seem quite as important. Competence and experience does.

And if you thought the people who invested in stocks lost their shirt, just talk to the folks who put their money on the Bush team's rep for competence.

There is an article

There is an article in Wednesday's Washington Post ("Bush Bids to Regain Economic Initiative") which is a weird mixture of bizarre and hilarious and downright terrifying.

In any case, it's a must-read. It's yet another piece on the White House's response (if you can call it that) to the corporate scandals and stock market tumble. But this one just perfectly captures the mix of ideological rigidity, bizarre denial and whistling-past-the-grave trash-talk which is now the coin of the realm at the White House.

Remember the big tin robot in those early sixties sci-fi films? Remember how there'd come a point at the end where the hero would outwit the robot or set him on some problem he couldn't solve and the robot would slip into a feedback loop and smoke would start coming out of his ears?

The White House is the robot.

It's really that bad.

The upshot of the article is that Wall Street and congressional Republicans are going nuts. They think the sky is falling. But the White House thinks things really aren't so bad. And they have a clever plan! The administration will use the August congressional recess to get a jump on Congress by pressing lawmakers to vote on fast track. That, and the President and Secretry O'Neill will travel to companies around the country that are doing well.

Phew! And I thought they didn't have a plan...

The article accurately, if with understatement, notes that the White House's response is "greatly constrained by administration philosophy ... [which] does not believe in dramatic intervention, either in the markets or the economy."

Sound familiar?

But here's the graf that launches a thousand ships ...

More dramatic economic proposals have so far been squelched. According to one economist close to the administration, White House economic adviser Lawrence Lindsey has suggested a narrowly tailored cut in the tax rate paid on stock profits for investors buying new stocks. That could lure buyers into the market. But the proposal was roundly shot down because it could be interpreted as a gift to affluent taxpayers at a time of economic uncertainty.
This is what I mean by the feedback loop and smoke coming out of their ears. Larry Lindsey is the president's chief economic advisor, the top cheese, as good as it gets. His solution to the fix we're in is to jigger the capital gains tax. Obviously his advice is being blocked by political advisors who happen not to be insane. But if Lindsey is being sidelined because he's taken up residence on another planet who does that leave guiding the nation's economic policy? Not Paul O'Neill. No one likes or respects him at the White House. Don Evans? Dick Cheney?

I think the answer is pretty obvious: No one.

We're in trouble.

I write little about

I write little about technology on these pages. But this story left me incensed. A crew of Texas scammers or rather cyber-highwaymen are trying to shakedown the Internet economy for tons of cash by claiming that they own the patent to the jpg image format, the format in which at least half the images on the web -- and I suspect many more -- are stored.

The company is (the perhaps appropriately named) Forgent Networks and they claim that they got the rights to jpg when they bought Compression Labs back in 1997. They've apparently aleady gotten a few Japanese companies to cough up millions of dollars.

Up until now everyone had been going on the assumption that the basic jpg specifications were in the public domain -- with ample facts to back up the assumption. (The precise ins and outs of the matter are a touch more complicated. And they're discussed here. But this is the essence of it.) And now the Joint Photographic Experts Group, the committee which manages jpg (thus the name) is mobilizing an effort to prove the point.

If you don't do much work with computer graphics or have never looked under the hood of a website, I grant you, this may all seem a touch nerdy and obscure. But really it's not. Your digital camera? It uses jpg. Your Palm Pilot? Pretty much every electronic or computer device you own? The same thing. The sharks at Forgent want to get a cut from pretty much everyone who makes a product that uses computer images, and no doubt jack up the price you'll have to pay.

I'm all for securing real intellectual property rights. But this, I assure you, is a scam. They are the cyber-era equivalents of highwaymen, sharks, cheesy protection racketeers. Let's hope the folks at the Joint Photographic Experts Group and the courts won't let them.

I read the next

I read the next day's Wall Street Journal online very late in the evenings. And the Journal is particularly good at times like these because -- at least in the news section of the paper -- one gets a concentrated view of how professional market observers see what's going on, absent much of the distracting glosses of the political right and left.

The most sobering article (subscription required) I read was on Williams, the telecom and energy trading company. I only have a layman's understanding of such matters. But the essence of the story seemed to be that Williams hasn't been caught in any clear shenanigans and it's not that they're some house-of-cards, never-to-be-profitable business like so many dotcoms. They're just caught in the massive downdraft in the entire market. And now, for these various reasons, they've been unable to renew a certain unsecured credit line. And this may lead them further into the ditch.

Particulars aside, the sense one gets from reading this article is how the chaos in the market -- and of course the flat-on-its-back telecom industry -- is creating a massive economic downdraft that might force decent companies -- a number of which control a lot of critical infrastructure -- into the ground.

What makes this all really unsettling is that the executive branch, frankly, seems not to have any idea what's going on.

That's a strong statement and obviously I make some of my living being critical of Republicans. But it's really true. I think most honest observers are starting to see that. And frankly that's scary.

On Monday the president made some rambling remarks about bright times being around the corner and buying on the dips and a few other points that were virtually incomprehensible. Beside that he argued why he shouldn't can his Treasury Secretary, Paul O'Neill, a man who is essentially a non-entity in the administration, whatever his own virtues may be. O'Neill has been pretty much silent through all of this. But he's prone to gaffes. So maybe it's a good thing.

The vice-president is silent because he's under investigation by the SEC.

Economic advisor Larry Lindsey is silent or maybe just can't figure out what to do.

The same pretty much goes for Commerce Secretary Don Evans, the third member of the president's economic brain-trust which gave him the sage advice not to include any serious reforms in his early July Wall Street speech.

Can anyone honestly deny that no one seems to be at the helm?

Friends I have had

Friends, I have had a wave of emails asking for the link to the Reuters news story about Karen Hughes' husband's decision to move back to Washington and the secret government "pre-cog" historians. Friends, this was satire. Admittedly, reality has been rubbing up against fantasy in recent days. But these developments, so far at least, haven't occurred.

P.S. TPM's accounting isn't really done by Arthur Andersen either ...

Reuters In a surprise

(Reuters) In a surprise turn of events today, Karen Hughes' husband Jerry decides that Washington, DC. is a pretty rockin' place after all. Hughes family to re-relocate to Washington, DC. Karen Hughes perhaps to be rehired at White House?

Meanwhile, secret government "pre-cog" historians ponder the implications of recent events for LJ "Dutch" Bush, great-grand-nephew of George W., currently scheduled to assume the presidency in 2072.

They say a picture

They say a picture is worth a thousand words. But sometimes you get a bargain. Like this one of President Bush expressing his support for the American economy outside Chicago, Illinois -- which is worth about 78 million words. Look at the faces. Each one.

If we just all

If we just all agreed in advance by mutual consent that the Dow is now really at 6,000, wouldn't that just make for a more relaxing next few weeks?

Just a thought.

I didnt want to

I didn't want to do any posts this weekend. But this article by Chris Caldwell in the New York Press merits an exception. It's simply devastating and the most apt statement of the White House's predicament I've yet read. Every word of it practically is worth reading and reading again.

There's always an element of unmerited, guilty pleasure you feel when you hear someone on the other side making your side's case for you. But it's equally true that sometimes a political point can only be made clearly by someone who has to say it with an element of regret, whose words are free of the dross of wishful-thinking and mindless overstatement.

Consider this peerless paragraph, which comes after Caldwell argues that no actual illegality was likely involved in Bush's Harken stock sale ...

What kills the President is that every time Harken comes up, Democrats get to retell the story of how he made his money. And this, basically, is the story of the spectacular unfairness with which moneymaking opportunities are lavished on the politically connected. It is the story of a man who has been rewarded for repeated failures by having money shot at him through a fire hose. It is the story of a man who talks with a straight face about having "earned" a fortune of tens of millions of dollars, without having ever done an honest day’s work in his life.
More than anyone else thus far, Caldwell gets bracingly to the heart of the matter.

What's so damning about this current round of revelations isn't so much the law-breaking. Nor is it that people make the wrong choice when forced to choose between playing by the rules and taking shortcuts to cash in big. What's so damning is that there is apparently a whole class of people who never have to face that tough decision, the sort of decision that defines most people's lives.

The insiders' we hear about never seem to have broken any law. Or they never knew the key inculpating fact at the key moment. But somehow they manage to cash out at the right time and everything works out okay.

One group of people seems to live in a world where the economic god comes out of the theology of John Calvin, while the other lives in a world with a god of ever-abiding love, universal salvation, endless second chances, and never having to say you're sorry ...

Welcome to the responsibility era ...

If youre wondering if

If you're wondering if Tom White helped himself in his Senate testimony yesterday, the Army brass that works under him apparently isn't. White got a standing ovation from the hundred-odd officers present at this morning's staff briefing at the Army operations center. And it's little surprise. The Senate Dems just hadn't done their homework and it showed, as Josh Green makes clear in this earlier post.

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