Mark-To-Market / It’s Time To Gore Sarbanes-Oxley Now

Former House Speaker Newt Gingrich is a senior fellow at the American Enterprise Institute (AEI). [Fox News interview YouTube video links at post end] Image Credit: episcopalifem.wordpress.com

Mark-To-Market / It’s Time To Gore Sarbanes-Oxley Now

In the wake of the ENRON Corporation accounting fiasco, congress rushed in with the passage of the Sarbanes-Oxley Act of 2002 to show that they were paying attention to the outrage seen in the voting public to lying from corporate executives.

Definition from Wikipedia:

The Sarbanes-Oxley Act of 2002 (Pub.L. 107-204, 116 Stat. 745, enacted 2002-07-30), also known as the Public Company Accounting Reform and Investor Protection Act of 2002, enacted on July 30, 2002 was put forward by Congress in response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. Named after sponsors Senator Paul Sarbanes (D-MD) and Representative Michael G. Oxley (R-OH), the Act was approved by the House by a vote of 334-90 and by the Senate 99-0. President George W. Bush signed it into law, stating it included "the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt."

Tucked into this bill was an accounting practice that is known by the term “Mark-To-Market”. “Mark-To-Market” was designed to have assets of a corporation be valued on a market valuation basis. Simply put … the assets of a corporation would be valued not on the time and intrinsic value of the assets held, but on the confidence level of those assets as shown in the stock market price of the company marked at a particular point in time.

Several recognized leaders have begun to ask the Bush Administration to act against this practice and change it so that the value of corporate assets would be calculated based upon an average taken over a three month period backwards from the time the assessment is required when businesses are applying for swing loans upon which a company takes advantage of an opportunity to expand (leveraging assets).

Newt Gingrich, Donald Trump, and Steven Forbes are three of the recognized names calling for this free market change upon which about 70% of our economy’s liquidity crisis can be solved. By making the Executive Order TODAY to suspend the “Mark-To-Market” accounting practice of corporate valuation mandated by the Sarbanes-Oxley Act, corporations would be able to show assets valued at a more realistic rate thus banks would have the confidence to lend them money and our economy would gain some liquidity without taxpayer money.

This excerpted and edited from Forbes Magazine -

Suspend Mark-To-Market Now!
Newt Gingrich 09.29.08, 6:05 PM ET

Today, Congress voted against passing the bailout package for Wall Street. The stock market reacted immediately, falling almost 800 points. It is clear that something needs to be done, and in the coming days, a new package must be constructed that has the support of the American people that both deals with the liquidity crisis and sets the stage for long-term economic growth.
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Today the Treasury secretary released the following statement: "I and my colleagues at the Fed and the SEC continue to address the market challenges we are facing on a daily basis. I am committed to continuing to work with my fellow regulators to use all the tools available to protect our financial system and our economy."

While Congress and the White House consider next steps, the Treasury and its fellow regulators should follow their own counsel and take without delay the one regulatory action within their discretion that can help immediately to calm markets and dramatically reduce the taxpayer risk in any necessary government intervention: suspend mark-to-market.

Chief economist Brian S. Wesbury and his colleague Bob Stein at First Trust Portfolios of Chicago estimate the impact of the "mark-to-market" accounting rule on the current crisis as follows:

"It is true that the root of this crisis is bad mortgage loans, but probably 70% of the real crisis that we face today is caused by mark-to-market accounting in an illiquid market. What's most fascinating is that the Treasury is selling its plan as a way to put a bottom in mortgage pool prices, tipping its hat to the problem of mark-to-market accounting without acknowledging it. It is a real shame that there is so little discussion of this reality." (Emphasis added.)
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"Mark-to-Market" Accounting and the Origins of the Financial Crisis: Mark-to-market accounting (also known as "fair value" accounting) means that companies must value the assets on their balance sheets based on the latest market indicators of the price that those assets could be sold for immediately. Under such a rule, declining housing prices don't just reduce the value of defaulting mortgages. They reduce the value of all mortgages and all mortgage-related securities because the housing collateral protecting them is worth less.

Moreover, when a company in financial distress begins fire sales of its assets to raise capital to meet regulatory requirements, the market-bottom prices it sells out for become the new standard for the valuation of all similar securities held by other companies under mark-to-market. This has begun a downward death spiral for financial companies large and small.

More foreclosures and home auctions continue to depress housing prices, further reducing the value of all mortgage-related securities. As capital values decline, firms must scramble to maintain the capital required by regulation. When they try to sell assets to raise that capital, the market values of those assets are driven down further. Under mark-to-market, the company must then mark down the value of all of its assets even more.

The credit agencies see declining capital margins, so they downgrade the company's credit ratings. That makes borrowing to meet capital requirements more difficult. Declining capital and credit ratings cause the company's stock prices to decline.

Panic sets in, and no one wants to buy mortgage-related securities, which drives their value under mark-to-market regulations down toward zero. Balance sheets under mark-to-market suddenly start to show insolvency. This downward spiral shuts down lending to these companies, so they lose all liquidity (cash on hand) needed to keep company operations going. Stockholders--realizing that they will be wiped out if the companies go into bankruptcy or get taken over by the government--start panic selling, even when they know the underlying business of the company is fine.

The end result for the company is stock prices driven toward zero and bankruptcy or government takeover. The criminal liabilities imposed under Sarbanes-Oxley have driven accountants to stricter and stricter accounting evaluations and interpretations and have prevented leading executives from resisting them.
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Reform or Bust: Because existing rules requiring mark-to-market accounting are causing such turmoil on Wall Street, mark-to-market accounting should be suspended immediately so as to relieve the stress on banks and corporations. In the interim, we can use the economic value approach based on a discounted cash flow analysis of anticipated-income streams, as we did for decades before the new mark-to-market began to take hold. We can take the time to evaluate mark-to-market all over again. Perhaps a three-year rolling average to determine mark-to-market prices would be a workable permanent system.
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For companies like Bear Stearns, Lehman Brothers (nyse: LEH - news - people ) and American International Group (nyse: AIG - news - people ), suspending mark-to-market rules will come too late. But for the remaining vulnerable banks and corporations, doing away with the current mark-to-market accounting rules will safeguard against destructive pricing volatility, needless bankruptcies, job loss and huge taxpayer bailouts.

Suspending Mark-to-Market Only the First Step to Economic Recovery: In the wake of today's vote, suspending mark-to-market is an extremely important first step to take, but it is only a first step.
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Congress should look at the impact of the Irish 12% corporate income tax on attracting investment and jobs to Ireland and consider a dramatic cut in the U.S. corporate income tax (the highest in the world when combined with state taxes) as a step toward attracting high-value productive and desirable jobs back to the United States.

The Congress should look at the Chinese and Singapore growth patterns and match them by zeroing out the capital gains tax to induce massive flows of private capital to rebuild the market and minimize the need for a taxpayer-funded bailout.

The Congress should repeal Sarbanes-Oxley, which failed to warn of every single bankruptcy but provides a $3-million-a-year accounting and regulatory expense for every small company wishing to go public.

This is the kind of pro-growth, pro-entrepreneur program that would accelerate the American recovery and lead to the next economic period of real growth.
Reference Here>>

It’s time to gore Sarbanes-Oxley now!

Newt Gingrich lays out the problem and the solutions to this liquidity crisis in three parts - in order HERE, HERE, and HERE.

Of Howdy-Doody and WAMU

Now children of all ages can join Howdy, Buffalo Bob, Clarabelle and the lovable Doodyville characters in a good family atmosphere, the way it used to be. You will agree ... GREAT CHILDREN'S PROGRAMMING IS ETERNAL. You and your family will love that old fashioned feeling of fun and love that Howdy Doody will bring into your home. Image Credit: Doodyville

Of Howdy-Doody and WAMU

Just WHO does late night television entertainer and talkshow host David Letterman think he is … after all, he is just the Howdy Doody of the evening television airwaves who helps most people promote books, movies, and events as we all try to get some sleep at the end of a long day.

This week, Senator John McCain, the Republican Party nominee running to be the next President of the United States and leader of the free world decided to suspend his activities campaigning so that he could direct his attention on his duties as a senior Senator and presumptive head of the Republican Party on the pending liquidity crisis looming over the housing mortgage industry.

This excerpted and edited from the Associated Press –

Letterman unloads on McCain for not showing up
NEW YORK (AP) - September 25, 2008

"Late Show" host David Letterman treated John McCain's decision to cancel an appearance on his talk show more like a stupid human trick than the act of a statesman.
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"This doesn't smell right," Letterman said. "This is not the way a tested hero behaves. Somebody's putting something in his Metamucil."

McCain spokeswoman Nicole Wallace said Thursday that the campaign "felt this wasn't a night for comedy."

"We deeply regret offending Mr. Letterman, but our candidate's priority at this moment is to focus on this crisis," Wallace said on NBC's "Today" show.
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Letterman later asked: "Are we suspending it because there's an economic crisis or because the poll numbers are sliding?"
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McCain told the CBS show that he was immediately flying back to Washington, Letterman told his audience. Then Letterman showed a TV feed of McCain being made-up for an appearance on news anchor Katie Couric's "CBS Evening News."

"Doesn't seem to be racing to the airport, does he?" Letterman said. "This just gets uglier and uglier."

As McCain spoke to Couric, Letterman shouted at the feed: "Hey, John, I've got a question. Do you need a ride to the airport?"

Letterman later said: "We're told now that the senator has concluded his interview with Katie Couric and he's now on Rachael Ray's show making veal piccata. ... What are you going to do?"
Reference Here>>

Last night, we were greeted with the news that Washington Mutual (WAMU), one of the largest banks that participated in the Fannie Mae/Freddie Mac social engineering concept which got its start in 1995 during the Clinton administration, FAILED.

President Bill Clinton wanted to try and achieve a potential 70% home ownership by the citizens of our country. He felt that in order to allow people who could not come up with the standard 20% down payment - which was the custom - the federal government could stand behind a looser, eaiser set of qualifying rules with its money (taxpayer money … read that OUR money) and help more people into home ownership.

WAMU commercial where a potential customer shouts "Whoo hoo!" as she imagines herself blistering along in a dragster on the Bonneville saltflats in an illustration as to how fast one could set up an account. Presumably, this also what happened when people applied for a home loan ... the real parachute to slow the dragster down came from JP Morgan. (Ctrl-Click to see video) Image Credit: AdFreakyFan

This Excerpted and edited from the Guardian (UK) –

America's largest banking failure sees JP Morgan pick up Washington Mutual
Julia Kollewe, guardian.co.uk, Friday September 26 2008 11:23 BST

The escalating crisis in the global financial system has claimed its biggest victim yet with the collapse last night of the US savings and loan group, Washington Mutual.

In America's largest-ever banking failure, Federal regulators seized the group's assets in the early hours of this morning and sold them to JP Morgan Chase for $1.9bn (£1.03bn).

Founded in Seattle in 1889 and known as WaMu, the group is the nation's biggest savings and loans company - the US equivalent to a British building society. The deal will make JP Morgan the largest bank in the US, ahead of Bank of America.
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The face of the global financial industry has changed dramatically in the past fortnight. The US government has taken over mortgage finance giants Fannie Mac and Freddie Mac and bailed out the insurer American International Group for $85bn. Lehman Brothers filed for bankruptcy, and Merrill Lynch has been sold to Bank of America. In Britain, Lloyds TSB has agreed the takeover of the troubled mortgage lender HBOS.
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The move came as the Bush administration's $700bn bailout plan for the financial sector ran into trouble. The package could have helped WaMu, but regulators decided that waiting any longer "was not a responsible decision to make," Bair said.
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WaMu has seen its share price virtually wiped out after it made thousands of mortgage loans that its borrowers cannot repay, saddling it with billions of dollars in bad debts. The company has posted losses for the last three quarters, including a loss of $3.3bn for the most recent quarter, ending in June. It put itself up for sale last week but could not attract any bidders.
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JP Morgan's chief executive Jamie Dimon said he was undeterred by WaMu's financial problems. "We're getting franchises of this company for a long period of time," he said. The bank will gain long-desired presence on the west Coast as WaMu's branches are concentrated in California.

In March, WaMu rejected an offer of $8 a share from JP Morgan. The company's then-chief executive was subsequently fired.
Reference Here>>

To make a long story short … WAMU, as many other banks had done, granted loans on houses with little or no collateral by people who had no ability or intention to pay and were now left being responsible for assets that were worth at least 40% less value than they had used to secure additional operating capital. Hence, the liquidity (money) dried up and the operations had to be sold to another organization … the bank FAILED to continue operations.

What John McCain did was to stop the endless promotion of his run for the highest office in the land so that he could do his job as Senator to help negotiate and focus on the interest of taxpayers.

What Howdy Doody-David Letterman did was to whine and throw a hissy fit because John McCain canceled a campaign stop-over to appear on Mr. Doody’s neighborhood due to the fact he really had better, more important things to do.

With his efforts to forge an agreement between both political parties … and to protect taxpayer interests, maybe a few less banks will succumb to the lack of cash in the housing and mortgage banking system which has its additional ripple effects on business in general.

Maybe Howdy Doody should just go to his corner of the peanut gallery and shut his pie hole on the subject … Barack (present!) Obama may not be ready for primetime but John McCain, in this time of our country’s leadership activity, does not need to be taking any “Howdy Doody Time.”

We, at MAXINE, graduated from watching “Howdy Doody Time” a long time ago – Whoo hoo!

O.C.D. In The D.N.C.?

Platters a plenty … as long as they are biodegradable, organic, locally grown, and have all the right and approved colors. Image Credit: sandwichmart.com

O.C.D. In The D.N.C.?

The fanatic level of control exhibited by the planners and leaders of the Democrat Party in the run-up to their convention in Denver is beyond belief ... almost obsessive. One is left to assume that this is exactly the level of control they would like to exert over ALL of our lives if they are given the chance.

As a natural rollout of events which began as “scare everyone” tactics initiated by the claim that Global Warming/Climate Change is created by human beings, the leaders are implementing and holding everyone (who will be attending the convention in Denver) to rules that set the “GREEN” bar very high.

Hundreds of free bikes will be available for anyone looking for an alternative to automobiles during the Democratic convention in Denver. From left, Denver Mayor John Hickenlooper, Director of Bikes Belong Tim Blumenthal, convention organizer Parry Burnap and Dan Oftedahl of Humana, which will provide the free bikes, announced the initiative in early May. Image Credit: Associated Press/Humana

From the strict policies and handling procedures regarding disposable food utensils, to the descriptions of the very colors of acceptable food items served, to strict definitions of what can be worn by service workers ... to the manufacturing composition of balloons to be used for the celebration, to an argument of whether to allow bottled water or not ... this would all be very humorous if this were a parody ... but, unfortunately, it's not.

It is widely assumed that Republicans want to control peoples’ lives, although Republicans staunchly support limiting government and maximizing self-determination. The truth is, the major control initiative over the last few decades comes down to the abortion issue. There, Republicans really only want to protect the unborn human by allowing every baby to be “brought” to term and have a life.

The Democrats, through this extreme approach to green initiatives during their 2008 convention, are making an interesting statement to Americans of all parties. This Democrat Party wants to be able to control every aspect of the lives of all citizens. The D.N.C. discomfort with many matters of self-determination by convention attendees is weirdly controlling ... and smacks of Obsessive Compulsive Disorder (OCD).

Ms. Robinson says all the signs and placards will be made from post-consumer recycled or biodegradable materials. It will all be recycled after the event. Confetti and banners lay on the floor at the end of the 2004 convention in Boston. Image Credit: Associated Press

This found, excerpted, and edited from the Wall Street Journal and the Denver Post -

The Greenest Show on Earth: Democrats Gear Up for Denver
From Organic Fanny Packs to 'Pure' Trash, Party Planners Face Logistical Nightmare
By STEPHANIE SIMON - June 25, 2008; Page A1

As the Mile High City gears up to host a Democratic bash for 50,000, organizers are discovering the perils of trying to stage a political spectacle that's also politically correct.

Consider the fanny packs.

The host committee for the Democratic National Convention wanted 15,000 fanny packs for volunteers. But they had to be made of organic cotton. By unionized labor. In the USA.

Official merchandiser Bob DeMasse scoured the country. His weary conclusion: "That just doesn't exist."

Ditto for the baseball caps. "We have a union cap or an organic cap," Mr. DeMasse says. "But we don't have a union-organic offering."
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Convention organizers hired the first-ever Director of Greening, longtime environmental activist Andrea Robinson.
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Ms. Robinson suspected modern-day delegates would prefer air conditioning. So she quickly modified the mayor's goal: She'd supervise "the most sustainable political convention in modern American history."
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To test whether celebratory balloons advertised as biodegradable actually will decompose, Ms. Robinson buried samples in a steaming compost heap.

She hired an Official Carbon Adviser, who will measure the greenhouse-gas emissions of every placard, every plane trip, every appetizer prepared and every coffee cup tossed.

The Democrats hope to pay penance for those emissions by investing in renewable energy projects.

Perhaps Ms. Robinson's most audacious goal is to reuse, recycle or compost at least 85% of all waste generated during the convention.
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To police the four-day event Aug. 25-28, she's assembling (via paperless online signup) a trash brigade. Decked out in green shirts, 900 volunteers will hover at waste-disposal stations to make sure delegates put each scrap of trash in the proper bin. Lest a fork slip into the wrong container unnoticed, volunteers will paw through every bag before it is hauled away.

"That's the only way to make sure it's pure," Ms. Robinson says.
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Here, a delegate eats a hamburger on the floor of the 2004 convention in Boston. Democrats' catering guidelines discourage fried food and push for organic or locally-grown ingredients. At least 50% of each meal should be made up of fruits and/or vegetables. Image Credit: Getty Images

No fried food. And, on the theory that nutritious food is more vibrant, each meal should include "at least three of the following colors: red, green, yellow, blue/purple, and white." (Garnishes don't count.)

At least 70% of ingredients should be organic or grown locally, to minimize emissions from fuel burned during transportation.

"One would think," says Mr. Matt Burns, a spokesman for the Republican convention, "that the Democrats in Denver have bigger fish to bake -- they have ruled out frying already -- than mandating color-coordinated pretzel platters."

Democrats say the point is to build habits that will endure long after the convention. To that end, the city has staged "greening workshops" attended by hundreds of caterers, restaurant owners and hotel managers. "It's the new patriotism," Mayor Hickenlooper says.
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Joanne Katz, who runs the Denver caterer Three Tomatoes, will take one for the green team by removing her fried goat-cheese won tons with chipotle pepper caramel sauce from the menu. But she questions whether some of the guidelines will have the desired earth-saving effects.

Compostable utensils, she says, are often shipped from Asia on fuel-guzzling cargo ships. As for the plates: "Is it better to drive across town to have china delivered to an event and then use hot water to wash it, or is it better to use petroleum-based disposables?" she asks.
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But it's almost inevitable that principles, politics and profit will conflict.

To wit: Coors Brewing Co., in Golden, Colo., will donate biofuel made from beer waste to power the convention's fleet of flex-fuel vehicles. A green star for the convention -- but it has rankled die-hard liberals, who boycotted Coors in the 1960s and '70s to protest hiring practices that they said discriminated against blacks, Latinos, women and gays. Heirs to the Coors fortune have long been active in conservative causes and Republican politics.
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No matter, grumbles Anna Flynn, a longtime union member from Denver who objected to the donation. "Any way you put it, it's still Coors," she says.
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Watching the greening frenzy from afar, Fred L. Smith Jr., president of the libertarian Washington think tank Competitive Enterprise Institute, suggested the Democrats could really shrink their footprint by staging a virtual-reality convention: "Just have everyone stay at home with their laptops, sitting in their pajamas, interacting through their avatars."

Ms. Robinson, the greening director, says big showy conventions are part of the American political tradition, and thus worth a few emissions here and there. Also, she hates to be a killjoy.

True, she did try (unsuccessfully) to get bottled water banned from the convention hall. But remember those balloons? She checked the compost heap last week -- and found them still intact.
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So will the fanny packs -- made in the USA of undyed, organic fabric. Mr. DeMasse vows to get a union shop to print the logo, but he says the ink will be petroleum based. Unless, that is, he decides to get the logo embroidered -- with biodegradable thread.
Reference Here>>

There are always veggies left in bins after the weekend farmers’ market. You just can’t eat ‘em all. After a couple of days grace, the remains are off to the compost heap. Today, it’s a nice selection! Image Credit: Tiny Farm Blog

And This –

Caterers find eco-standards tough to chew
By Douglas Brown - The Denver Post - 05/18/2008 11:33:44 PM MDT

Fried shrimp on a bed of jasmine rice and a side of mango salad, all served on a styrofoam plate. Bottled water to wash it all down.

These trendy catering treats are unlikely to appear on the menu at parties sponsored by the Denver 2008 Host Committee during the Democratic National Convention this summer.

Fried foods are forbidden at the committee's 22 or so events, as is liquid served in individual plastic containers. Plates must be reusable, like china, recyclable or compostable. The food should be local, organic or both.

And caterers must provide foods in "at least three of the following five colors: red, green, yellow, blue/purple, and white," garnishes not included, according to a Request for Proposals, or RFP, distributed last week.

The shrimp-and-mango ensemble? All it's got is white, brown and orange, so it may not have the nutritional balance that generally comes from a multihued menu.

"Blue could be a challenge," joked Ed Janos, owner of Cook's Fresh Market in Denver. "All I can think of are blueberries."
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"I think it's a great idea for our community and our environment. The question is, how practical is it?" asks Nick Agro, the owner of Whirled Peas Catering in Commerce City. "We all want to source locally, but we're in Colorado. The growing season is short. It's dry here. And I question the feasibility of that."

Agro's biggest worry is price. Using organic and local products hikes the costs.

"There is going to be sticker shock when those bids start coming in," he says. "I'll cook anything, but I've had clients who have approached me about all-organic menus, and then they see the organic stuff pretty much doubles your price."

The document, which applies only to the host committee's parties, came after months of work that involved discussions with caterers and event planners along the Front Range, says Parry Burnap, Denver's "greening" director.
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"We are hoping that everything we are doing for greening (the convention) has some legacy value," she says.

The RFP, for example, will likely live on after the convention in a brochure the city will distribute widely to help guide local businesses interested in improving their green practices.
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"It takes some creativity because some of these things are more expensive," she says. "But we're at the front end of a market shift."
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Burnap acknowledged that figuring out what is most green can be difficult.
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"One we are talking about now is, is it better to compost or to recycle? If you are using a cup for a beverage, is it better to be (plastic) and back in the materials stream, or compostable, biodegradable waste and go into the waste stream or compost? There are no definitive answers."

Composting for the convention hasn't been entirely figured out yet, she says.
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The committee is working with other groups to develop a carbon-footprint "calculator" that will measure the environmental impact of each event and suggest an "offset" — a fee — that will go toward a fund helping to match carbon losses with carbon gains.

"That's a fun one," Burnap says. "If these event planners will calculate and offset, it will start to get the money flowing into the Colorado Carbon Fund, a fund that will reinvest in renewable energy here in Colorado."
Reference Here>>

Say hello to the green exchange, spearheaded by a leading cast of energy and environmental brokers -investors- who are launching a new exchange for trading credits that offset the global warming greenhouse gas emissions. Image Credit: triplepundit.com

So who really profits from such demanded activity?

It is time to re-think what we really wish for when we are deciding to change things up in the structure of our country.

The Democrats, through their own controlling management styles and behaviors, are showing all of the citizens here in the United States how a Democrat Party headed up by a Barack Obama presidency will be. Personal freedoms and choices will be reduced and/or eliminated.

We are already hearing it in the speeches, as Obama preaches that we all should be driving smaller cars while willingly paying continually increasing prices for fuel (no problem, they would like to see $10.00 a gallon gas if it were up to them), wearing sweaters instead of expecting warm homes, etc. It is a short Democrat drive to an America that can quickly feel like a third world nation given the expectations of our Democrat Party.

While in Denver, attending the "second coming" and coronation of the party's new leader, here’s hoping you enjoy your confetti-colored appetizer with your biodegradable fork. I hope the plate holding the meal of the day does not disintegrate, or fold in your lap!

The Quest For Hollywood Cash & Caché

Democratic presidential candidate Senator Barack Obama (D-IL) speaks to supporters at a rally in Austin, Texas February 23, 2007. Image Credit: REUTERS/Peter A. Silva

The Quest For Hollywood Cash & Caché

It’s a small pond with a lot of very big and influential fish. Hollywood political money, for some on both sides of the process, is more about position and stature than the value of the money and the power it brings.

Rob Reiner, through his political appointment and failed attempts to direct how Californians live and pursue their lives, is only one example of the abuses that may take place when Hollywood money and influence meet up with the potential of placing someone with real political power into office … any office.

All one needs to do is review the events of the past week after a major fund raising event to see how important it is for liberals to court and carry the majority of the “Hollywood Cash & Caché”.

Excerpts from the World Socialist Web Site (a liberal insider’s POV) -

The “scramble for Hollywood:” the Democratic Party and entertainment industry liberals
By David Walsh - 24 February 2007

The squabble that erupted this week between the camps of Democratic Party senators and presidential hopefuls Hillary Clinton of New York and Barack Obama of Illinois might best be described as a skirmish in the “scramble for Hollywood.”

The dispute brought to the foreground a sordid reality of contemporary American politics: the general hustling for cash from corporate contributors and wealthy donors that dominates US election campaigns, and the role, in particular, of studio executives and other major figures in Hollywood in funneling tens of millions of dollars to the Democratic Party.

Two Democratic heavyweights for the 2008 presidential nomination - Senator Hillary Rodham Clinton and Senator Barack Obama - decided to bring their arsenals into the open. And the first salvo has been fired by Clinton in response to remarks made by Obama fundraiser, David Geffen. Image Credit: EARTHTIMES

Clinton and Obama, along with the other Democrats, are presently battling over Hollywood’s treasure trove of campaign funds.

As everyone in America knows and the media brazenly acknowledges, winning the presidential nomination of one of the two major parties depends in large measure on collecting more money than any of your rivals. Success in fund-raising is the principal indication that you are a “serious” candidate. It both confirms that you have the backing of powerful corporate and financial figures, the people who count, and encourages further support from these circles.
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During the Presidents’ Day recess of Congress this week, many politicians found themselves fund-raising in southern California. Democratic House Majority Leader Steny Hoyer of Maryland, Senator Barbara Boxer of California, Senator Richard Durbin of Illinois and Senator Joseph Biden, another presidential hopeful, were among those who held one or more events in the Los Angeles area.

Obama’s campaign grabbed the spotlight by organizing a $2,300-per-ticket Beverly Hills reception Tuesday evening, the most significant event this month, attended by film stars, studio executives and others. The affair raised some $1.3 million.

Jennifer Aniston, Ben Stiller, Eddie Murphy, Morgan Freeman, George Clooney, Barbra Streisand, Ron Howard and Dixie Chicks’ lead singer Natalie Maines were reportedly among those who attended. Obama, according to press reports, told the mostly film industry crowd, “Don’t sell yourself short. You are the storytellers of our age.”

The Hillary Clinton-Obama dispute broke out the following day after remarks made by the host of the event, film and recording mogul David Geffen (along with Steven Spielberg and Jeffrey Katzenberg, one of the founders of DreamWorks SKG), appeared in Maureen Dowd’s column in the New York Times. Geffen, who raised $18 million for Bill Clinton during his presidency, has thrown his support and considerable influence behind the Illinois junior senator and rival of Hillary Clinton. Geffen asserted that Hillary Clinton was “overproduced and overscripted,” according to Dowd. He criticized her for not apologizing for her 2002 vote in support of the Iraq war.

Dowd wrote that relations between Geffen and the Clintons ruptured in 2001, when the president, during his last hours in office, pardoned international commodities trader Marc Rich while refusing to free political prisoner Leonard Peltier, the American Indian Movement leader who was framed up for the deaths of two FBI agents in 1977.

Geffen commented, “Yet another time when the Clintons were unwilling to stand for the things that they genuinely believe in. Everybody in politics lies, but they do it with such ease, it’s troubling.”

The Clinton camp quickly shot back and the battle of press releases was on.
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The stakes are high for the Democratic candidates. According to Eric Alterman in the September 2004 edition of the Atlantic Monthly, “During the 2000 election cycle, zip-code areas on average yielded slightly more than $35,000 in political contributions, while residents of Beverly Hills, 90210, ponied up slightly more than $6.2 million. In the same year Pacific Palisades, Bel Air, and Brentwood were each good for $1.7 million to $3.3 million.

“In 2002 entertainment ranked first among all industries funding Democratic Party committees, and roughly 80 percent of the industry’s party contributions went to Democratic candidates and committees; just 20 percent went to the Republican Party. From 1989 up to the start of the current election cycle Hollywood had given the party nearly $100 million for federal elections alone—close to the $114 million Republicans received from their friends in the oil and gas industries. Together with organized labor and the trial bar, Hollywood is now one of the three pillars of the Democrats’ financial structure.”
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The Hollywood elite is not a monolith. Film studio and entertainment industry executives, leaders of the handful of enormous conglomerates that largely determine what Americans and much of the world see on cinema and television screens and listen to on CD and radio, belong to the same financial-corporate oligarchy that has a stranglehold over every aspect of American life. These are multi-millionaires and billionaires who have a very large say in determining who should hold political office and protect their interests.

The Center for Responsive Politics notes that the film industry has specific issues which it pursues with the politicians it helps bankroll, including “trade, copyright protection and free speech concerns.” The CRP continues, “While many of the big-name stars give mainly for ideological reasons, the corporate executives who run the industry take a more pragmatic view in dispensing their campaign dollars.
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“A perennial concern of the industry is copyright protection, particularly as it concerns the practice of sharing music and video files via the Internet.
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The film industry executives lean toward the Democrats for cultural and political reasons. The success of their business in this day and age depends on a certain “permissiveness” in the social atmosphere. The dominance of the Christian Right, for example, would not be helpful to those often attempting to market violence and sexual suggestiveness, nor would it accord with the temperaments and lifestyles of writers, directors, actors and musicians by and large.
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The economic concerns of studio chiefs and their general political inclinations merge and overlap with the outlook of the extremely well-heeled layers who make up the upper echelons of the film and music industry in Hollywood and organize support for the Democratic Party — figures like Geffen, Spielberg, Streisand, Rob Reiner, Laurie David (producer-comic Larry David’s wife) and others.

No doubt, in many cases, a sincere desire to see social reform and improve the general conditions of life motivates such people in supporting liberal politicians, as well as environmental and charitable causes.
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However, this is a privileged layer that sees the world and the political process in the US through a thick haze. Its particular brand of liberalism is shaped by a terrible distance from the working population and its concerns, the degree to which it is shielded from everyday life in general by managers, assistants and intermediaries of every sort, and its essential satisfaction with its own lot.
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The continued flow of Hollywood cash to the Democrats, whatever the motives or intentions of its organizers, is a deeply reactionary fact of American political life.
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At Maxine, we wonder why all of this Hollywood Cash & Caché can't be directed toward issues of self-reliance and the kind of social reform that leads toward self-determination in the pursuit of happiness here in America … what is so really wrong with that?

I was reminded this morning in a presentation at the church I am prone to attend … with all of the liberal bashing that George Bush gets for being “dumb”, one assumes that the point these people seem to be making is that they posses greater knowledge than others … any others, save themselves.

1 Corinthians 8:1 states that “knowledge puffs up, but love builds up” - I am beginning to think with the more I listen and watch to what is being said this last week in Los Angeles, that people from the upper echelons of the film and music industry in Hollywood like those who organize support for the Democratic Party - figures like Geffen, Spielberg, Streisand, Rob Reiner, Laurie David (producer-comic Larry David’s wife) and others feel they have great knowledge … but lack love.

The Oscars are on tonight so here at MAXINE we plan on tuning in to "feel the love".

NOTE: After watching last nights Oscar presentations ... the key to get Hollywood Democrat CASH a flowin'? ... one word - CRISIS!