Tilting At Windmills

The owners of the Washington Redskins appear to be exploring the frontiers of capitalism in a way that does not seem sporting. They are refinancing $500 million in club debt with a $700-million loan. Why should I object? After all, they are probably seeking lower interest rates, just like thousands of other Americans. True, but it’s the explanation of the increase from $500 to $700 million that I find a bit dicey. “The difference between the old debt package,” we discover in the ninth paragraph of a story about the transaction in The Washington Times, “will go to [Dan] Snyder and his investors–father Gerald, sister Michelle, and [U.S. News & World Report publisher] Fred Drasner–as personal loans.” It looks like part of those painfully high prices fans pay for Redskins tickets will go to financing personal loans for the owners.

The first Bush administration was controlling the White House press corps’s agenda, deciding what issues were to be emphasized each day and relegating to the back burner all other matters, however important they might have been. So wrote James Bennet, now of The New York Times, in our November 1991 issue. The article caused enough embarrassment in the media that it almost immediately ceased to be true, and remained untrue during the last year of Bush I and the entire Clinton presidency. But its validity resumed under Bush II and gained strength from the surge of patriotism in the media after 9/11. This spring, however, stories of corporate malfeasance began to threaten the White House’s control. You can imagine Karl Rove’s worry when stories began to focus on participation by the president and vice president in questionable business practices. So they have given us Iraq, which has proved to be gloriously successful in pushing everything else off the front pages, including pressing domestic problems that desperately need the nation’s attention.

We thought we had found the last of the great expense-accounters with the Petrus gang featured here last month, but just after we went to press, we learned about Michael Murphy, a lawyer in Coral Gables, Fla. He is accused of spending $111,000 on prostitutes and, according to The Washington Post, billing them to a client as “routine litigation expenses.”

“A cigarette in the hands of a Hollywood star onscreen is a gun aimed at a 12- or 14-year-old,” writes Joe Eszterhas, a prominent screenwriter who started smoking at 12 because he “wanted so very much to be cool” and whose recent throat cancer cost him much of his larynx. When smoking is written into or made a part of a scene by a writer or director, it is justified on the ground of “creative freedom” and “artistic expression,” writes Eszterhas, who then nails the real reason on the head: “laziness.” I’ve made this point before, but Eszterhas makes it better, and he speaks with the authority of an insider and former sinner. “The truth is, there are 1,000 better and more original ways to reveal a character’s personality.”

Have you noticed that the word “capitalism” is now back in vogue? It had nearly vanished when the “market” was chic. It appears that people like to use “capitalism” when they’re attacking the system and “markets” when they’re advocating or defending it.

In the course of doing research on a book about events that took place in 1940, I have been delving into newspapers of the era. Not surprisingly, I found a good many examples for the How Times Have Changed Department. One example is that, back then, you could buy a new car–Ford, Chevrolet, or Plymouth–for less than $700. But my favorite is an International News Service article that quotes a physical education expert, Dr. Jay Nash, on “why young people today are such a bunch of softies.” Said Nash, “Instead of obtaining stimulation from work, the young people of today are to be found sitting around soda fountains devouring ice cream sodas.”

Is there a “housing bubble”? Have escalating real estate prices created a danger akin to the stock market bubble that burst last year? I am definitely no expert, but I do recognize one troubling sign: refinancing homeowners are pressing appraisers for high estimates of their homes’ value, so that, like the Redskins owners, they can increase the amount of their loans. “Appraisers from around the country say homeowners are increasingly urging them to jack up the estimated prices of their homes,” reports Sheila Muto of The Wall Street Journal. Those of us who remember the 1980s know that inflated appraisals were a significant factor in the savings and loan scandal. When real estate prices declined, the inflated appraisals were exposed. Borrowers who had to sell at lower prices could not repay their loans. The S&Ls that had made the loans either went under or were bailed out by the taxpayers.

The defects in the Bush education bill are beginning to show. As Alexander Russo made clear in our September issue and The New York Times recently confirmed, the right the bill was supposed to confer on parents to transfer their children from failing schools has turned out to be illusory. There just isn’t enough room in the good schools for those who want to transfer.

Another difficulty with the bill, this one pointed out by The Washington Post, is that the definition of a failing school is left to the states. The Post found one school in Arkansas where only 10 percent of the students were proficient in English, but which the state still managed to avoid classifying as “failing.”

Mark Knowler of CBS Radio is the media’s unofficial keeper of presidential statistics. His findings were recently reported by The Washington Post‘s Dana Milbank. Two of them might be of particular interest to you. W. has spent 250 days–42 percent of his presidency–at Camp David, Kennebunkport, or his Texas ranch. He has held only six solo press conferences during the first 19 months of his presidency. His handlers must quail at the prospect of having the quality of his mind exposed to the world. Recall how frequently confident presidents like FDR and JFK met with the press–FDR did it twice a week.

Even if your indignation threshold is high, your blood may heat up when you learn that Merrill Lynch will probably be able to deduct from its taxable income the $100 million it paid to settle the New York at-torney general’s charge that it hyped stocks it knew were losers in order to please big corporate clients. The key to getting the tax deduction, explains The Wall Street Journal’s John D. McKinnon, is having the agreement defined not as a fine, but as a civil settlement, as Merrill Lynch succeeded in doing. “It’s a subsidy for corporate wrongdoing,” says a prominent tax attorney.

One of the more unfortu-nate aspects of the Cold War was the tendency of American foreign policy makers to ally us with any dictator who shared our distaste for the Commies. Now it appears that we are falling into the same pattern in the war against terrorism. Pakistan is a notable example. Now comes Indonesia. Three years ago we cut our ties with that county’s armed forces after they had slaughtered hundreds of people in East Timor. Now, reports Karen DeYoung of The Washington Post, “The administration is renewing the military training despite scant evidence that the Indonesian army has substantively investigated and punished the human rights abuses that led to the cutoff.”

Some of you will recall that in 1969, the nation was shocked to learn that 155 individuals and couples with incomes of $200,000 or more paid no tax. As a result, Congress passed the alternative minimum tax that was supposed to eliminate this problem. But now The New York Times‘ David Cay Johnston reports that in 1999 –the last year for which figures are available–2,250 individuals and couples paid no federal income tax, even though they had incomes in excess of $200,000. The alternative minimum tax shouldn’t be abolished, as Bush proposed to do, but it clearly needs fixing. Too many people who should be covered are escaping. And too many people are covered who shouldn’t be. For example, the tax can apply to a single parent making only $28,000, while most of those making more than $600,000 avoid it.

Dick Cheney’s Halliburton problem may not go away. The evidence shows that while he was the company’s chief executive officer, its accounting was changed to show certain uncollected payments as income, instead of losses as the company treated them and as common sense would indicate. Did Cheney know about the accounting change? The answer is yes, according to the company’s present CEO, David Lesar. Was the change disclosed to investors at the time? Only if we accept as disclosure the kind of fine-print whisper perfected by Enron and Arthur Andersen.

You may recall that over the years there have been a good many reports of airport employees smuggling dope onto planes while they’re engaged in routine maintenance, cleaning, and re-stocking of food and beverages. But suppose, asked a recent Learning Channel documentary about airport security, the employee is told he is being handed a bag of dope and it actually is Semtex or some other explosive? He will still think he is only supplementing his income by doing something naughty but relatively harm-less–and the result could be catastrophic.

Boston Cath-olics recently set up their own fund to provide money for worthy Catholic charities without going through the archdiocese. Why, they asked, should we give money just to support the church bureaucracy or to aid and abet Cardinal Law’s stonewalling? The cardinal, however, has refused to let the charities accept the money. “I think he has a classic tin ear,” one Boston Catholic told Pam Belluck of The New York Times. I agree.

Andrew Fastow, the Enron CFO who devised all those lovely schemes to enrich himself and other Enron executives, had a Lucite cube on his desk. Its different sides explained the company’s values. One, according to The Wall Street Journal, said, “When Enron says it’s going to ‘rip your face off,’ it will ‘rip your face off.'”

Speaking of Enron, it and other corporate scandals do seem to have restrained the Bush administration’s mad rush to deregulate practically everything. Consider the case of Michael Powell, the chairman on the Federal Communications Commission. In March, as part of that mad rush, he disbanded the agency’s Accounting Safeguard Division and announced a reduction in the amount of information companies must supply to the agency. But in April he “placed a moratorium on any relaxation of the rules,” according to The Washington Post‘s Christopher Stern, and told a Senate committee that the financial scandals are causing him to “question” his deregulatory zeal.

The latest cal-endar of “Coming Attractions” from the local Vassar Club lists six events. Four are for “Over 30 Ivy Singles,” hosted respectively by MIT, Stanford, Yale, and Bryn Mawr. But one the Scholarship Benefits Lecture, shows that the alums have not totally forsaken the life of the mind. And the last one, a New York Yankees versus Baltimore Orioles game, demonstrates that they are willing to mix with the masses at least once in a while.

Maharishi Mahesh Yogi–you may recall that he was once guru to The Beatles–has announced that his Global Country of World Peace will issue Peace Bonds paying 6 to 7 percent. The bonds will finance 3,000 Peace Palaces where his followers will practice yogic flying in which, writes Peter Carlson of The Washington Post, “meditators sort of hop around the room while sitting cross-legged.”

Maharishi is confident that yogic flying at 3,000 locations will produce world peace. But how is he going to pay you that 6 or 7 percent? Not to worry. “Each Peace Palace,” writes Carlson, “will be surrounded by an organic farm that will produce food that will generate the profits that will pay the bondholders.”

This may sound like a put-on, but I can assure you Carlson is a sober fellow, having personally seen him survive a three-Negroni lunch and still get up and walk out of the restaurant. (Come to think of it, maybe he was a little cross-legged.)

Twenty-two percent of graduates from the University of the District of Columbia’s law school passed the bar exam last year. This compares with a national average of 73 percent. Yet UDC spends $11,043 per student compared to the national average of $5,687. “Every dollar spent on the law school is a dollar that could be spent on elementary education,” D.C. Council member Sharon Ambrose tells Jim Keary of The Washington Times. She has a point.

Richard Perle’s threat– “The failure to take on Saddam after what the president said would produce such a collapse of confidence in the president that it would set back the war on terrorism”–reminds me of how the CIA’s Allen Dulles and Richard Bissell conned John Kennedy into finally okaying the Bay of Pigs, when he had seemed to be coming to his senses and threatened to cancel that misbegotten enterprise. They told Kennedy that if he backed out, the CIA’s Cuban brigade would have to be disbanded, and its members would disperse throughout the Americas spreading the word that JFK was a sissy and that the “pay any price, bear any burden” in his inaugural address was just so much phony rhetoric. Kennedy caved. The moral for Bush is that he should not.

The Bush plan to go to war against Iraq reminds me of the British-French-Israeli attack on Egypt in 1956. Egypt was not attacking them, just as Iraq is not attacking us. Or anyone else. What Egypt had done was to seize the Suez Canal. But since the canal had long been controlled by an Anglo-French company, they were used to calling the shots and were outraged that an uppity wog like Egypt’s Gamal Nasser would dare to offend them.

The consequences of the invasion were truly disastrous. It was immediately condemned by the United Nations. Much worse, the invasion came just as the Soviet Union was pondering whether it could get away with sending tanks into Hungary to suppress the 1956 Hungarian uprising. World opinion was clearly on Hungary’s side. But the invasion of Egypt by three of America’s closest allies deprived the West of the moral high ground, and the Russians figured they could get away with a little invading of their own.

One has to wonder what will be the unanticipated consequences of our invasion of Iraq. Certainly it is distracting us from the main chance. Just as the British, French, and Israelis should have been more concerned with what was going on in Hungary, we should be more concerned with what is happening between the Israelis and the Palestinians. A just solution there would do more to win the war on terrorism than anything else we could do.

Peter Carlson has another item about yogis that I just can’t resist repeating. It concerns Bikram Choudhury of Beverly Hills, the self-styled “Guru of the Stars” whose pupils have included Michael Jackson and Madonna. When he is accused of having sex with his students, he asks: “What happens when they say they will commit suicide unless you sleep with them? What am I supposed to do? Sometimes having an affair is the only way to save someone’s life.”

Suppose there is a biological attack on the United States–how are we going to find out it’s underway? We can wait until the streets are littered with corpses, but to find out before that we must depend on the detection of early symptoms by individual physicians and hos- pitals. One hole in this safety net was recently explored by Science magazine: the very large number of people who tend not to consult doctors when they first show signs of illness because they are uninsured, underinsured, or illegal immigrants. How many people does this add up to? There are no reliable statistics. But I would guess it’s at least 100 million.

Something else to worry about: the water supply. “Through-out the country long-neglected mains and pipes, many more than a century old, are reaching the end of their lifespan,” report U.S. News & World Report’s Marianne Lavelle and Joshua Kurlantzick. “When pipes fail, pressure drops and sucks dirt, debris, and often bacteria and other pathogens into the huge underground arteries that deliver water.” I had written about this problem before and was wondering whether I should bother repeating it. But when I went to my faucet to get a drink of water, nothing came out. Then I heard noises from the street. I went outside and saw a bunch of workers gathered around a large hole. They told me that the water main had “split.” I looked down into the hole and what I saw reeked of the early 19th century, or perhaps earlier. I wouldn’t have been surprised to see some arrowheads.

Here is a fact all of us sort of subconsciously know, but the actual statistics are still impressive evidence of the computer re-volution. In 1991, the federal government em-ployed 103,000 secretaries. Today, the figure is 47,000. I wonder how many of those remaining reflect their boss’s technological in-eptitude (as was the case with me) and how many represent a sacrifice at the altar of his ego.

The purpose of that 1940 book I’m working on is to explain the significance of the nomination of Wendell Willkie as the Republican candidate for president. His opponents for the nomination were all isolationists. They opposed all-out aid to Britain, even though it was fighting for its life, and they opposed the military draft that was needed to give us a remotely adequate Army. If Willkie hadn’t won, Roosevelt would have faced an isolationist opponent in an election year. He wouldn’t have been able to get away with doing the right thing. There’s a good chance Britain would have gone under and that we would have faced Hitler and Japan without a major ally and with an army of merely 200,000. That’s the momentous part of the story. The fun part is that it was the most exciting convention of my lifetime.

Charles Peters

Charles Peters is the founding editor of the Washington Monthly.