KeNo's Housing and Economic Portal: Sunday November 29 Housing and Economic stories

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Goodbye to Reforms of 2002‎ - (www.nytimes.com) t took just five weeks after the WorldCom accounting scandal erupted in 2002 for Congress to pass, and President George W. Bush to sign, the Sarbanes-Oxley Act. That law required public companies to make sure their internal controls against fraud were not full of holes. t took three more years for Bernard Ebbers, the man who built WorldCom into a giant, to be sentenced to 25 years in prison for his role in the fraud. Mr. Ebbers will be 85 years old before he is eligible for release from prison. He may be freed, however, before the law is ever enforced on the vast majority of American companies. A Congressional committee voted this week to repeal a crucial part of the law. Other parts are also under attack. Sarbanes-Oxley was passed, almost unanimously, by a Republican-controlled House and a Democratic-controlled Senate. Now a Democratic Congress is gutting it with the apparent approval of the Obama administration. The House Financial Services Committee this week approved an amendment to the Investor Protection Act of 2009 — a name George Orwell would appreciate — to allow most companies to never comply with the law, and mandating a study to see whether it would be a good idea to exempt additional ones as well. Some veterans of past reform efforts were left sputtering with rage. “That the Democratic Party is the vehicle for overturning the most pro-investor legislation in the past 25 years is deeply disturbing,” said Arthur Levitt, a Democrat who was chairman of the Securities and Exchange Commission under President Bill Clinton. “Anyone who votes for this will bear the investors’ mark of Cain.” Those who favored the amendment saw it differently. They were simply out to help small businesses, which would be burdened by having to report on whether they maintained acceptable financial controls, and to have auditors check on whether those controls did work. They also suggested that more foreign companies would list their securities in the United States if they were spared that onerous requirement. No one seems to have asked if investors really would benefit from making it easier to invest in companies that fear such an audit. There are other threats to Sarbanes-Oxley as well. The law set up a long-overdue system of regulating the accounting industry, which had proved time and again that it was incapable of effective self-regulation. The Public Company Accounting Oversight Board has done a credible job, but a month from now the Supreme Court will hear a case that could drive it out of existence. The Sarbanes-Oxley law also took steps to reinforce the independence of the Financial Accounting Standards Board, which writes accounting rules in the United States. By giving the board a secure source of financing, legislators said they were protecting it from the threats of the companies that had previously made donations to keep the board functioning.

Healthcare Reform is Economic Malpractice - (www.safehaven.com) As Washington continues debating healthcare reform the rest of the country is primarily concerned about jobs and the economy. It is still uncertain what policies will be implemented, but I am certain about one thing: It will only further devastate our economy and our dollar. The leadership has come up with a proposal they are confident will be what they consider fiscally responsible, only to have it scored as nearly twice as expensive by the nonpartisan Congressional Budget Office. Estimates of past healthcare spending programs have been off by as much as 100 percent so there is no telling what the actual cost will be. The past century should have taught us one thing: that government intervention is expensive. Government programs lend themselves so easily to waste, fraud and abuse. Combine that with overall inefficiency and it all adds up to a hefty price tag for the taxpayer, with not much leftover for actual services. An outright takeover of an entire sector of the economy, especially one as important as healthcare, is something that we just cannot afford for the government to do right now. Not to mention the fact that it is completely unconstitutional. But Washington insists on torturing the numbers and tinkering around the edges rather than facing this truth. If healthcare reform does indeed pass, we should not be under the illusion that it will be free. The money to pay for it will have to come from somewhere. They say they will get the money from cutting waste, fraud and abuse, but all of that is seemingly intrinsic to government programs. Since they want to expand the government's reach we have to assume we will be trading waste, fraud and abuse for waste, fraud and abuse with a bigger budget. The powers that be have insisted the money won't come from higher taxes, it won't come from rationing of care, and it won't come from higher premiums. This can only then put more pressure on the Fed to print the money out of thin air. We already have a weakening dollar. They are accelerating everything that weakened it in the past. Adding this new, monumental pressure could very well be the straw that will break the dollar's back. Foreign creditors are already nervous about continuing to invest in the US because of our skyrocketing debt. The explosion of debt that is certain to accompany the enactment of this national health care bill can only add to that nervousness. Ironically, enactment of the health care bill could help the cause of liberty by hastening the day when Congress is forced by economic circumstances to stop increasing the welfare-warfare state and return to the Constitution. There are many problems with our current healthcare system, to be sure. There are many tragic stories to be told. However, we need to look at the root of our problems in order to address them properly. More government intervention and bureaucracy injected into healthcare will take a flawed system and make immeasurably worse.

The New Face of American Day Labor - (www.lasvegassun.com) It sounds like a George Lopez joke. “Times are so bad that I saw an Anglo day laborer standing outside Home Depot the other day.” Except it’s true. In the latest sign of the Las Vegas Valley’s economic free fall, U.S. citizens are starting to show up in the early mornings outside home improvement stores and plant nurseries across the Las Vegas Valley, jostling with illegal immigrants for a shot at a few hours of work. Experts say the slow-starting but seemingly inexorable trend is occurring nationwide. “It’s the equivalent of selling apples in the Great Depression,” said Harley Shaiken, chairman of the Center for Latin American studies at the University of California, Berkeley. But it is not only a sign of the times, they add. If the numbers of citizens among the day laborers in cities across the country continue to grow, it’s likely to increase the ire of followers of TV host Lou Dobbs and others who will see illegal immigrants as stealing food off the tables of the nation’s native-born or naturalized poor. Or, it may flip certain canards upside down in the immigration debate, easing tensions in some communities. In the Las Vegas Valley, where the most recent unemployment rate was 13.9 percent, one face of this phenomenon is Ken Buchanan. The 50-year-old describes himself as a “food and beverage” guy, most recently working for four years at Renata’s Sunset Lanes casino and, before that, 30 years in a string of restaurants, hotels and casinos here and in his birthplace, Chicago. But in 2006 Renata’s closed for remodeling. When the casino reopened as Wildfire, the management did not rehire Buchanan, he said. In the months that followed, Buchanan discovered the difficulty of seeking work in his fifth decade, eventually winding up at Green Valley Car Wash, where he stayed for about two years, he said. The banks foreclosed on the house he was renting. In the attempt to grab his things two steps ahead of the constable, he wound up missing work. He lost his job. He became homeless. A Hispanic man Buchanan met in Renata’s sports book told him he had picked up work standing outside the Home Depot on Pecos Road at Patrick Lane. One July day, Buchanan gave it a try. At first, he got nothing but sunburn. But then he started to get work. Now he’s at the Home Depot six days most weeks. Pablo Alvarado, executive director of the Los Angeles-based National Day Laborer Organizing Network, said he has been seeing the same thing elsewhere. “It’s happening, though still not in massive numbers,” Alvarado said. In the past six months or so, he has heard of “americanos” on the street corners and parking lots of Silver Spring, Md., Long Island, N.Y., and Southern California locations.

Israel Proposes Slavery for Illegal Migrants - (www.haaretz.com) The government is considering establishing work camps in the south of the country, where illegal migrant workers will receive shelter, food and medical care, Army Radio reported Wednesday. In exchange, illegal migrants would perform manual labor outside the camps, but would not earn a salary. They would stay at the camp until their asylum claims are decided, which could take months or years. The proposal, part of the effort to address the problems posed by illegal migrants, would place asylum seekers at jobs in communities in the Negev and Arava. Their salaries would go to the state, in order to fund the camps. The issue of illegal foreign migrants and refugees has made the headlines due to the efforts by human rights organizations to block the deportation of 1,200 foreign workers' children. One of the main arguments by deportation advocates, including Interior Minister Eli Yishai (Shas), is that allowing them to stay would bring hundreds of thousands more illegal migrants. They would bring in "a range of diseases such as hepatitis, measles, tuberculosis and AIDS [as well as] drugs," said Yishai. "I fear how far we have fallen," said MK Dov Khenin (Hadash) in reaction to the work camp proposal, adding that he thinks the plan would encourage many more asylum seekers to try to enter Israel. "The plan [would] induce refugees to come to Israel. A bed is an incentive compared to where they come from. Israel has the right to close its borders, but when someone comes here, you cannot fight with him. This shows that we haven't learned a thing, as people living in a country established by refugees for refugees," Khenin added. In addition to the opposition of human rights groups, communities in the south may also not respond favorably to the plan. In April 2008, during a court hearing on the government's policy of putting asylum seekers in the northern and southern peripheries, north of Hadera and south of Gedera, an affidavit was presented to the court on the migrants' employment prospects. In the document, Sigal Rosen of the Hotline for Migrant Workers declared that kibbutzim in the south had not shown an interest in hiring the migrants.

Goldman Sachs: Doing God's Work - (www.reuters.com) Check out the headline at the bottom left of the Sunday Times front page. The man the London paper calls the most powerful banker on Earth says he is “just a banker ‘doing God’s work’”. The report says Goldman Sachs chief executive Lloyd Blankfein“proudly pays himself more in a year than most of us could ever dream of — $68m in 2007 alone, a record for any Wall Street CEO, to add to the more than $500m of Goldman stock he owns” . Goldman Sachs looks set to pay about $20 billion in bonuses for its top traders this year, at a time when the fallout from last year’s financial crisis is still being felt and the United States unemployment rate has hit 10.2 percent, a 26-1/2-year high. In his defence, Blankfein said in the interview: “We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle … We have a social purpose.”