What bokononists whisper whenever they think of how complicated and unpredictable the machinery of life really is.



By Elton Beard

There are two kinds of people in the world, those who divide people into two kinds and those who don't. I don't.



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02/10/02 01:15pm link

Money counts and the government should eliminate my taxes. An article in today's Washington Post describes a computer model developed by Enron economists to predict the cost or benefit, to Enron, of any existing or proposed federal regulation. The data generated by "the matrix" (did these guys have a thing for movies or what?) was used to optimize the distribution of cash to politicians in order to obtain the best return on investment.

There's nothing wrong with that. Enron was playing by the rules, and the rules say it's OK to contribute to politicians who best represent your interests. In fact, it's possible that government-dependant companies like Halliburton and Carlyle are remiss in their fiduciary duties if they don't run computer simulations of various what-if scenarios for military spending and energy policy, in order to maximize return on their investment in politicians.

Gia Maisashvili, an economist who had worked on the Enron computer model, ultimately quit in disgust at the way it was used. He told the Post:

They could have cared less if that was a good thing [for the public] or not. They cared only if this was good for Enron.
Mr. Maisashvili may have let his conscience guide him, but we can't expect corporations to have a conscience. Corporations exist in order to maximize profits for investors, and they shouldn't be expected to elevate some concept of the public good above profit. They shouldn't even be expected to discern what the public good is, other than to obey the rule of law.

It's up to government to decide what is in the interest of the public and the country, not corporate CEOs. Capitalism works, but it only works to the benefit of all in the context of sufficient government regulation and oversight. The fiduciary responsibility of corporate management is to maximize shareholder value; attendance to the public good is the duty of government.

More from the Post (via JMM):

"The ingrained philosophy was, me first, money counts and the government should eliminate my taxes," said another former manager. "That's all they cared about -- what impacted them personally."
Paul O'Neill
But "I got mine" is the defining principle of conservative economic philosophy, and of the Republican philosophy as a whole. Can an administration that adheres to such views be trusted to properly design and enforce rules that regulate business in the public interest?

The administration recently produced a budget document featuring a drawing of Gulliver tied down by Lilliputians. The analogy, presumably, is to the constraints imposed by on business by elected politicians.

Treasury Secretary Paul O'Neill had this to say on the issue:

I've dedicated my life to doing what I can to get rid of rules that limit human potential, and I'm not going to stop.
Don't have your secret decoder ring handy? No problem. To understand what he really meant, just substitute "corporate" for "human" in that quote. And that should answer the question of whether this administration can be trusted to look after the public weal.

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What bokononists whisper whenever they think of how complicated and unpredictable the machinery of life really is.



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