Posted on 01/26/2002 4:28:30 PM PST by JameRetief
READING the Australian press in recent weeks, one could be forgiven for thinking that the collapse of Enron was simply due to crony capitalism. One reporter even suggested that a free-marketeer [chief executive officer Ken Lay] sought political help from long-time mates in the Bush administration to avoid bankruptcy. The real story about the US gas and energy trader is much more interesting.
Rent-seeking in Washington is a highly developed art form. When really humungous amounts of money are involved, it is always the case that a "Baptist-bootlegger" coalition has been put together to get the necessary legislation through Congress.
The expressive term Baptist-bootlegger derives from the days of prohibition. Under prohibition bootleggers and those who transported and supplied illegal alcohol made fortunes. It was in the interests of the bootleggers and their associates to maintain prohibition, but their capacity to engage openly in politics was circumscribed.
But they had allies in the Baptists, who believed that alcohol was a deadly threat to the social order, and had worked for decades to get prohibition on to the statute books. The Baptists provided the political cover, and the bootleggers pocketed the proceeds.
The two groups maintained a great social distance from each other. The middleman in the coalition was a politician who would receive the bootleggers on Sunday morning and accept campaign donations, then reassure the Baptists at a convenient weekday appointment that he was firm for prohibition.
Enron was at the centre of an awesome Baptist-bootlegger coalition. But there is no shortage of evidence of the connections that Enron and its CEO Lay had with their Baptist allies. The rents that Enron energetically sought were truly gargantuan, but could only be realised if the Kyoto protocol became established as part of US and international law.
Lay saw Enron as not only making billions from sales of the natural gas, which was to displace coal as the preferred fuel under the Kyoto commitments. He also realised that, as a trader in carbon credits, Enron could realise hitherto unimagined wealth. Such credits, of course, would only become bankable pieces of paper if governments, particularly the US Government, established and policed a global policy of decarbonisation under which a global tax on carbon was to be enforced.
So, as the movement to establish the Kyoto protocol developed momentum, Lay built up alliances with the Greens, his contemporary Baptist allies. On December 12, 1997, just a day or so after the Kyoto meeting had concluded, an internal Enron memo asserted that the Kyoto protocol "will do more to promote Enron's business than almost any other regulatory initiative outside of restructuring the energy and natural gas industries in Europe and the US". It described the protocol's endorsement of international trade in carbon credits as "another victory for us", adding "this agreement will be good for Enron stock". The memo claimed that Enron had "excellent credentials with many green interests" including Greenpeace. These groups, in turn, were described as referring to Enron "in glowing terms".
THE organisation that has done more to build and sustain the Baptist-bootlegger coalition that continues to push for US ratification of Kyoto, or an equivalent decarbonisation program for the US, is the Pew Centre on Global Climate Change led by Eileen Clausen, a frequent visitor to Australia.
Clausen was one of president Bill Clinton's environment advisers. When she realised that the US Senate would vote against Kyoto in 1997, she resigned her post within the State Department to build a coalition that would reverse that position. Enron was a founding member of her Business Environment Leadership Council.
Everyone knows that a few hundred votes in Florida tipped the 2000 presidential election to Dubya. But few people are aware that West Virginia, normally a Democrat stronghold, went for the Republican. After all, that state's coal industry knew Bush would not endorse Kyoto. Without West Virginia, the vote in Florida would have made no difference.
For Lay, cultivating the Republicans was the obvious strategy. He had Kyoto partisans inside the Republican tent. Indeed, the party policy platform proposed to regulate carbon dioxide emissions from US power stations, just as Enron had been arguing within the Clinton White House for years.
The new Bush cabinet met for the first time in late January 2001. Treasury Secretary Paul O'Neill called for carbon dioxide regulation and limitation. He precipitated a major row within the new administration. Only now is it emerging that a key figure in persuading O'Neill to step outside his portfolio brief and carry the environmentalist flag was Timothy Wirth, another Clinton environment adviser and close confidant of Lay.
The investigation into Enron's collapse will reveal much more about the intricacies of the Baptist-bootlegger coalition that promoted the Kyoto cause within Republican and business circles. Bush can sleep soundly these nights, secure in the knowledge he made the right call in declaring that the US would not ratify the Kyoto protocol. Clearly, Enron's influence in this case counted for nothing.
Ray Evans is secretary of the Lavoisier Group in Melbourne
Because the mainstream media a.) worships Kyoto and b.) practices ignorance as an artform. Further, they hate capitalism and corporations. But, in their ignorance, they made Ken Lay and Enron foremost among their demons. Being from Texas, and all...
Now, too late, they find their demon was really on their side.
Enron needed to grease some journalistic wheels as well as political palms. They tried (handsome "consulting fees" to Paul Krugman, William Kristol, etc.) -- but these guys were too dumb to get the message...
Clean Power Group
Principles and Positions
Senate Committee on Environment and Public Works
Stakeholder Meeting
September 11-12, 2001
Clean Power Group Membership
· Calpine, El Paso, Enron, NiSource, Trigen
· Geographically diverse.
· Diverse fuel and technology mix.
· Account for 20% of new generation under development.
Key Principles
· A suitable multipollutant cap and trade program can be an environmentally beneficial replacement for conventional new source review while improving industry certainty and reducing costs to industry and consumers.
– Under a cap, NSR does not provide emission reductions.
– A suitable cap without NSR will yield lower emissions than a conventional program with NSR.
· NSR reform must include both new and existing sources.
· All participants in a trading program should be treated the same with respect to allocation.
· Allowances should be redistributed frequently, based on output.
· New technology needs to be encouraged for all fuels.
· Caps should be phased in gradually with an economic circuit breaker.
Clean Power Group Proposal
· Apply gradually declining caps on NOx, SOx, mercury and potentially CO2 for all generators.
· Caps replace BACT/LAER, offsets, mercury MACT, regional control programs.
· Backstops:
– NSPS requirement and local air quality impact review.
– Guaranteed cap “way-points”.
– Minimum compliance levels for mercury.
· Economic circuit breaker slows tightening of cap if required.
Benefits
· Earlier reductions and more continuing reductions than other approaches.
· More complete/efficient NSR reform.
· Promotes adoption of energy efficiency and new technologies for all fuels.
· Minimizes cost through gradual implementation and technology forcing.
· Promotes timely development of new generating capacity.
· Compatible with future potential programs to control CO2.
For more information contact:
Joel Bluestein
703-528-1900
www.eea-inc.com/cleanpower/index/
I'm glad to see the President reading "Bias". I just ordered it today. I also ordered "At any cost". I want to be prepared before the next election.
The reason is obvious. It absolutely defeats the notion that the Bush Administration was in the pocket of Enron, and it's a slap in the face of Kyoto to link Enron with it, something the press is loathe to do.
Brilliant! We knew you could supply a sensible answer to all this. LOL!
They ain't committing suicide (or Arkancide) because they're the darlings of the energy consumers or stock holders...
....They can take their Kyoto's, their phony carbon taxes, their phony pollution credits, their phony BTU taxes and their phony deregulation scams and sove'm up their a$$es....
Another 2 cows philosophy. Perhaps we shall call that one Fraudulism, to be included along with:
Socialism: You have two cows. Your government sees your neighbor in need and gives him one of your two cows.
Christianity: You have two cows. You see your neighbor in need, you give him one of your two cows.
Communism: You have two cows. The government takes them both and provides you with milk.
Fascism: You have two cows. The government takes them and sells you the milk.
Nazism: You have two cows. The government takes both and then shoots you.
Bureaucracy: You have two cows. The government takes them both, shoots one, milks the other, pays you for the milk, and then pours it down the drain.
Capitalism: You have two cows. You sell one and buy a bull.
Corporate: You have two cows. You sell one, force the other to produce the milk of four cows and then act surprised when it drops dead.
Democracy: You have two cows. The government taxes you to the point that you must sell them both in order to support a man in a foreign country who has only one cow which was a gift from your government.
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