Not once, ever, did they mention that during most of the years of false growth and cooked books, Clinton was President. It was during these times, that some people began to get suspicious and nothing was done. Bush had only been in office a few months when Enron finally collapsed, and this documentary tried waaaaay too hard to make it look like Bush helped hide the scandal or had a hand in it somehow. It was pretty ridiculous. At the end I thought, well, why didn't the Clinton administration, while in control of regulatory agencies do anything? I don't know enough about the situation to claim that Bush had no connection to this, because I have no idea. All I'm doing is posing the question, where was the Clinton administration all those eight years, and why did the documentarians ignore this question?
Anyhow, my main point about this movie comes from an article at Michelle Malkin's blog today. Her article is about the frightening possibility that the administration and certain Democrats will try for another Porkulus bill. She happens to go over the GOP's report on the failures of the 1st Porkulus to do anything that its supporters claimed it would, especially in regards to jobs. I'll post a portion of the excerpts that she posted, because it reminded me of one of the key, if not the key, element of the Enron scandal.
According to the documentary, Enron's ability to cook the books for so long came from an SEC approved type of accounting called Mark to Market (MTM). It seems like this is a legitimate and commonly utilized method of accounting from what I could find out by doing some online research, but it also seems like it allows for fraud more easily. Again, according to the documentary, MTM allows a company to use possible future earnings as real-time value and assets. In this way, a business could propose a new venture, flamboyantly predict its own profits, and then simply add those predicted profits to their bottom line. Wa la! It now looks as though your company's profits have exploded, everybody's happy and making more money. In the case of Enron, even when those ventures went south, they counted those fantastical profits real profits. Turns out MTM also had a hand in the subprime mortgage crisis... Now, how does this relate to the growing Porkulus debacle? Here's how.
From the GOP's memo and via MM's article:
President Obama asserted on June 8 that stimulus spending would save or create 600,000 jobs over the subsequent 100 days. 9 The Administration has essentially “rigged the game” of reporting the tangible effects of its stimulus program by creating an immeasurable metric – “jobs created or saved” – that no one can disprove. [emphasis added]
In addition, OMB’s guidance includes a loophole that would allow prime recipients of Recovery Act funds to use statistical estimates to report aggregated project-level job numbers: However, in limited circumstances, the prime recipient can employ an approved statistical methodology to generate estimates of job impact, thereby collecting data from a smaller subset of sub-recipients and vendors in order to extrapolate an estimate of job impacts to all applicable sub- recipients and vendors. 15
This job reporting method is available when the recipient deems the project-level requirements to be “overly costly or burdensome.” 16 Given that every recipient has an incentive both to minimize the costs of reporting as well as to maximize the number of reported jobs “created or saved” (so as to be more likely to receive future Recovery Act funds), this loophole could lead to many recipients simply estimating job numbers in a way that is not auditable, much as the Administration has done so far with its macroeconomic job claims. [emphasis added]
Now, I'm not an expert, but it seems to me that if a large corporation uses a method of accounting that seems a little dubious to this financial neophyte, and allowed for astronomical fraud to occur because they could basically make up whatever they wanted to in terms of profits, then how is this similiar type of shady "estimation" and unsubstantiated prediction any better when the government does it regarding jobs "created or saved?"
I just couldn't help but notice the similarities between Enron's dizzying financial acrobatics, and the President's eerily similar circus act of just making stuff up about the economy and jobs, and wasting our money to do it. Just a thought.
Also, check out the article that Michelle got her info from, it will make you want to move to Mars. Note to Dave Reichert: you should also read the article, then apologize to your country for voting for such rubbish.