Beating the Bushes:

What Pray Tell is the "Enron Loophole?"

   Its never ceases to amaze how every week brings new words and phrases into the national political vocabulary,  especially during election season. Some, like "Creationism" "Stagflation," "sound byte," and "Swiftboating" have become so familiar as to elicit nary a hiccup from one's computer spell-check. Others, like "Teapot Dome," "vicuña coat," "hanging chad" and "The Keating Five" are best known to those of us who proudly wear the political junkie's lapel pin -- a garland of placards in a field of greenhouse gases.

   The latest -- and potentially most damaging is the "Enron Loophole."  And although my spell-check is none too certain what to make of "Enron," Google sure does; as of ten minutes ago, a search for that term brought up no less than 175,000 different sites. Within less time than it takes to solve the Rubik's Cube [another term that the old spell-checker recognizes] the "Enron Loophole" has become so omnipresent that one would presume that everyone knows to what it refers.

   For those who don't we humbly offer -- as a public service to our readers -- a brief history, synopsis and dramatis personae of that which could -- and undoubtedly should -- become the one 2008 election-year phrase that will live in everlasting infamy.  For the "Enron Loophole" is one, which by all rights, should surpass "Whiskey Ring," "Credit Mobilier," and "Abscam." 

    Back in 2000, then-Texas Senator Phil Gramm slipped a little-noted Enron-backed provision into the Commodities Futures Modernization Act.  Simply stated, this provision exempted from regulation energy trading on so-called "electronic platforms" or "dark markets."  Heretofore, energy trading [electricity, natural gas, etc.] was done mainly under the auspices of either the Commodity Futures Trading Commission [which was chaired during the first Bush Administration by Senator Gramm's wife Wendy] or the heavily-regulated New York Mercantile Exchange [NYMEX].  Their rules and regulations are in place in order to "prevent price distortions and supply squeezes."  With passage of the Gramm-sponsored, Enron-backed bill, traders and speculators moved the lion's share of their business over to the unregulated Atlanta-based Intercontinental Exchange [ICE] -- the so-called "dark market."

   It should be noted that at the time of its enactment, Republicans controlled Congress, and Senator Gramm was the Senate Banking Committee chair; even worse, his wife Wendy, not five weeks after leaving CFTC was named an Enron director.  The bill, which was signed by President Clinton in December of that year, was approved without so much as a Senate hearing.  Internal Enron documents which were released in 2002 [after the company had imploded and gone bye-bye] reveal that the then-Houston based company not only helped write the legislation, but baldly lobbied Senator Gramm ["Gramm needs to fully understand how helpful the bill is to Enron," went one internal memo].

   Within a year of its being freed from "regulatory interference," Enron began creating false energy shortages in California.  They wound up bilking consumers out of an estimated $40 billion.  And despite the new Bush Administration's attempts to come to come to Enron's rescue  -- W. personally joined in with those fighting against imposing caps on soaring electricity prices --  the Houston energy giant soon went the way of the Stegosaurus and Slide Rule.

   But wait; there's more!

  In 2006, the "Enron Loophole" permitted a hedge fund called "Amaranth Advisers" to corner the  natural gas market.  Now trading on the unregulated "dark market," the Amaranth "hedgies" wallowed up to the crap table, plunked down their gelt, and bet that futures prices on natural gas would go "up, up, up and away!" 

   Oops! 

    In September 2006, natural gas prices fell to a two-year low.  Amaranth Advisers lost their well-heeled clients about $6 billion, thus proving the truth of the old axiom "He who plays around with unregulated energy futures will most likely get torched."  About a year ago, the Federal Energy Regulatory Commission [FERC] charged Amaranth with manipulating prices and has suggested a fine of $291 million plus the forfeiture of "unjust profits," whatever that means.

   It is highly likely that the high price of oil is also a result of unregulated activity in the "dark market."  Recently, Michigan Senator Carl Levin released a report concluding that "speculative markets" are "partly to blame for surging oil prices that have pushed gas at the pump toward $4 a gallon."  And Senator McCain [not to mention President Bush and Governor Charlie Crist] would have us believe that the answer to high prices at the pump in June 2008 is drilling off the coast of Florida!  Hey guys, it ain't a question of supply and demand; its a rigged game!

   So why has interest in the the "Enron Loophole" issue grown to the point where there are now more than 175,000 sites devoted to it?   And, what role might it play in the 2008 presidential election?

   First question first: Why has the loophole resurfaced precisely now?  Why not six months or two years ago?  Simple: the recent $307 billion farm bill.  When questioned, Senator McCain said he was against the bill, because "it would dole out wasteful subsidies."  One McCain aide, told journalist Jason Leopold that McCain opposed the farm bill because "it rewards lobbyists" by granting rich farmers "lucrative subsidies." OK, that's reasonable. However, the same aide noted that one additional reason for his boss's opposition was a section containing "regulatory language on the energy futures market."

   There's that word again . . .    REGULATION!! 

   ARGH!!!

   Who put this idea of hating any form of government regulation into the head of a man who freely admits "I don't know as much about the economy as I should?" 

   Why former Senator Gramm, that's who.

   Gramm, who is often described as "one of McCain's closest friends in politics," is also the campaign's chief economic adviser.  Anyone who has followed politics over the past twenty years will know that Phil Gramm hates government regulation and oversight even more than a Dodger fan hates the Giants. And this is the man to whom John McCain has entrusted his economic game  plan?

   Let Republicans and Obama haters of all shapes and sizes decry his relationship with Jeremiah Wright.  Let them question whether or not he thinks Louis Farrakhan is a stand-up guy.  For my money, the two  of 'em are full of sound and fury, signifying nothing.  To the best of my knowledge, neither has provided a platform whereby consumers could be bilked out of $40 billion or pay more than $4 at the pump. Neither one has paved the way for the richest one-tenth-of-one-percent to profit by human misery.  All these two gasbags have done is exercise their big fat mouths.

   Instead of continually wondering about Senator Barack Obama's alleged "relationship" with people whose words we may find abhorrent, we would be far wiser to question Senator John McCain's verifiable relationship with the man who made the term "Enron Loophole" such a hot term in the Google galaxy.

   Move over "Whiskey Ring."

   Stand aside "Teapot Dome."

  The "Enron Loophole" is about to overtake you!

©2008 Kurt F. Stone

"But That Was Yesterday . . . and Yesterday's Gone"

   We begin with a heartfelt -- albeit pro forma -- declaration: Senator John McCain is a man of uncommon valor and fortitude.  What he went through during his five tortuous years as a P.O.W. is beyond human comprehension.  He was tested in ways that not even Franz Kafka could imagine, and emerged to greet the sun of a new day. Senator McCain was, is, and shall always be, a shining example of the ineffable in man.

   Having unburdened ourselves of the plaudits due the man, let's get to the subject at hand: the genius of John McCain . . .

   For years, editorial writers have used the words "maverick," and "principled" to describe Senator McCain.  Time and again, he has been applauded for bucking Republican orthodoxy, for being the "heir" of Teddy Roosevelt.  At one point this was undeniably true.  Consider that in past years, Senator McCain co-sponsored a patients' bill of rights with liberal stalwarts Ted Kennedy and John Edwards.  He united with Senator Chuck Schumer to sponsor one bill allowing the reimportation of prescription drugs and another permitting the wider sale of generic alternatives.  All three of these drove the health care industry, the White House and the GOP leadership up the wall.  Despite pressure, Senator McCain did not cave.

   Senator McCain joined John Kerry in co-sponsoring a bill raising automobile fuel efficiency standards.  Another time he teamed up with Joe Lieberman on a measure imposing a cap-and-trade regime on carbon emissions.  He was also one of only six Republicans to vote against drilling in the Arctic National Wildlife Reserve.

   He has worked with Michigan Senator Carl Levin to close tax shelters, co-sponsored bills to close the gun-show loophole and federalize airport security and, perhaps most notably, voted against both the 2001 and 2003 Bush tax cuts.   Talk about a maverick!

   In fact, his moderate bona fides were so accepted, so much of the myth that is John McCain, that in 2004, John Kerry actually wooed him to join his ticket as vice president.  According to the New Republic's Jonathan Chait, the two held no less than a half-dozen clandestine conversations on the topic which, as Chait noted, was "about a half-dozen more than would have been needed if McCain was a dyed-in-the-wool conservative Republican."

    At this point, a lyric from Chad and Jeremy comes to mind: "But that was yesterday . . . and yesterday's gone." [For all you guitar enthusiasts out there, that's E7, A, Bm7-5, E7, A, Bm7-5, A D9, E7.] 

    Where then is the John McCain of yesteryear?  What became of the man who, like T.R., was dead-set against repealing the estate tax, and once called the Reverends Falwell and Robertson "agents of intolerance?"  Is this the same man who now wants to make the Bush tax cuts permanent, and is "very honored" to have the endorsements of Pastor Rod ["America was created to destroy Islam"] Pasley and Reverend John ["The Catholic Church is a whore"] Hagee?  How is it that a man who spent so many years working in tandem with Feingold, Kennedy, Schumer, Levin et al, can now claim the mantle of George W. Bush? 

   During the Republican primaries, many of the nation's most influential papers lauded McCain as a principled, straight-shooter:

• The Boston Globe: "Voters may disagree with his policies, but few doubt his sincerity."
• The Los Angeles Times: "The Arizona senator's conservatism is, if not always to our liking, at least genuine."
• The Wall Street Journal: "His philosophy is best described as a work in progress."

   Truth to tell, McCain's metamorphosis from "maverick" to "true believer" is not all that surprising.  After all, he is running for president, and will need both the hard-core right and big money if he is to win in November.  That's just the way politics works.

   What is a bit surprising -- and more than a little frustrating -- however, is the relatively free ride he has gotten from the media.  Articles and editorials enumerating his many flip-flops are in short supply.  Nowhere do we find commentary on his weak, dunderheaded rationalizations about why he wishes to make permanent the very tax cuts he originally voted against. When repeal of the estate tax first hit the senate floor, McClain noted "I follow the course of Teddy Roosevelt who talked about the malefactors of great wealth and gave us the estate tax."  Likewise, his votes against both the 2001 and 2003 tax cuts.  Today, he declares that voting to make those cuts permanent is not in the least inconsistent: "To let them expire would amount to a tax hike." 

   Excuse me? Isn't this the height of illogic?  While it is perfectly natural for some to oppose -- and others to support -- tax cuts, where is the logic in claiming that the repeal of said cut is tantamount to a tax hike? It buggers the imagination.    

   Those who have made a cottage industry out of harping on Senator Obama's "relationship" with Jeremiah Wright are strangely mute on the subject of the "Straight-Shooter" and his ecclesiastic minyan.  Where the Reverend Wright spewed his bilge in front of a couple of thousand each Sunday, the Reverend Hagee's, national television and radio ministry reaches an estimated 99 million homes a week [source: http//www.ministrywatch.org]

      There has been a great deal of speculation over which Democrat -- Obama or Clinton -- has the best chance of defeating John McCain.  Yes, we're well aware of those exit polls that purport to show an unhealthy percentage of Clinton supporters who claim they will vote for McCain if their candidate doesn't capture the nomination.  To our way of thinking in early May, those polls don't mean a whole heck of a lot.  We've yet to see a head-to-head debate between McCain and Obama.  Our money is on the Illinois senator; he has the issues, the message, and ability to make himself understood.  And, his thermostat is set a lot lower than McCain's, who has long been known for possessing a volcanic temper.

   One wonders if Senator McCain -- unlike Senators Obama or Clinton -- is immune to media scrutiny because "attacking" him -- i.e. revealing the truth -- would be tantamount to trashing an American hero.

   It is indeed a long, long journey from working with Ted Kennedy and having serious chats with John Kerry to climbing into bed with John Hagee and Rod Paisley.  It takes seven-league boots to make the leap from maverick to mossback. 

   Chad and Jeremy were right: But that was yesterday, and yesterday's gone.

    It only remains to be seen if the American voting public and the Fourth Estate know how to sing that refrain.

©2008 Kurt F. Stone