June 2, 2005  Vol. 1, No. 15   Courtesy, Nevada Taxpayers Association     Accounting for an Injustice Christian Science Monitor Editorial 'This ruling's basic reasoning...should force Congress to reconsider its onerous requirements for record-keeping in the post-Enron accounting reform law known as Sarbanes-Oxley' A Supreme Court decision on Tuesday overturned the 2002 criminal conviction of former Enron accounting firm Arthur Andersen. The decision comes too late for 28,000 of the firm's largely innocent workers who lost their jobs simply because public reaction to the original indictment sank the company. [continued] See also: Why Sarbanes-Oxley was a costly mistake By John Berlau Competitive Enterprise Institute Early this year, an unusual full-page ad appeared in the Wall Street Journal and other financial newspapers. The ad attempted to refute claims from businessmen about the costs imposed by the mandates of the Sarbanes-Oxley Act, the “corporate reform” law Congress passed in 2002 after accounting scandals hit Enron, Worldcom, and other companies. Yes, procedures stemming from that law “are neither simple nor inexpensive,” the ad said, but the costs are well worth it if the result is restored investor confidence. “The [law’s] greater goal and promise,” the ad proclaimed, “is that the rigorous demands of compliance can lay the groundwork for improved and more reliable financial reporting, leading to a higher level of public trust.” [continued] Section 8.2 Housing? Regulation magazine by Tim Rowland Public housing may be the only government construction project that draws greater cheers when it comes down than when it goes up. And for good reason. Through the middle part of the century, public housing basically replaced inner city slums with nicer slums, or at least slums with more amenities, like nonworking toilets. [continued] JP Morgan's Pretend Investors New York Sun by Steven J. Milloy JPMorgan Chase's CEO, William Harrison, appeared to retreat on a major element of his company's capitulation to the radical environmental movement at the company's annual shareholder meeting last week. In April, after about a year of being pressured by the eco-activist group Rainforest Action Network, JPMorgan Chase announced its adoption of environmental policies restricting the bank's ability to provide financial services for energy and land-use projects. [continued] She's the Right Radical Cato Institute by Roger Pilon How much longer can we go on playing constitutional pretend — pretending that there's a serious connection between the Constitution and so much of what passes today for "constitutional law"? Rarely faced head-on, the question arises on the few fortunate times when we're presented with a judicial nominee who's been so bold as to publicly doubt the connection. At the moment that's Janice Rogers Brown. [continued] WHY BusinessNevada

Commentary
Grasp the Nettle

Nobel Prize winner F. A. Hayek saw
and addressed political predicaments similar to those facing Nevada business.

By Steven Miller
BusinessNevada

Friedrich Hayek, a deeply insightful thinker and economist, had, by early in the 20^th Century, clearly identified why socialism, as an economic system, was bound to fail.

From the 1920s through the ’40s, he—and Ludwig von Mises, his fellow Austrian—pointed out in innumerable books and papers that only free market prices can provide the economic information that a modern, viable society requires to function. Because a socialist order lacks market pricing, they noted, the best that such an economy can do is to always remain parasitic on outside, capitalist economies.

Hayek, teaching at the prestigious London School of Economics in the 1930s and the ’40s, became very well-known. Often publicly debating the fundamental questions of economic policy with his friend, John Maynard Keynes—world-famous as the author of the 1936 General Theory of Employment, Interest and Money—Hayek was soon second in fame only to Keynes himself.

Nevertheless, the political winds of the day were against him. Even as his fellow economists were hailing his 1945 essay on market pricing as a rational economy’s indispensable signaling function, socialism was triumphing politically everywhere around him—left, right and center.

Soon Hayek was being seen, wrote Thomas W. Hazlett in a 1992 feature for Reason magazine, as “an academic outcast, a throwback, a marginal character whose ideas had been neatly disproven to all reasonable men in the scientific journals of his day.” In 1950, the University of Chicago would not offer him an appointment in economics, but—recognizing the breadth of his intellect—made him chair of its Committee on Social Thought. In 1962, Hayek returned to posts at European universities and continued to break new ground. His focus, however, remained outside economics; his new writings were works in psychology, political theory and law.

Notwithstanding demagoguery from politicians, or ignorant cupidity from voters, reality remains reality. And it was not done with Hayek the economist. For “the late 20th century,” as Hazlett put it, had “decided to provide a reality check on the academic scribblers.”

In the very countries that had so enthusiastically embraced the dogmas of Keynesianism, inflation spiraled skyward while stagnation spread throughout the economy like kudzu. Supercilious government-employed economists suddenly began learning humility as their conventional economic wisdom proved fatuous.

“The macro models of Cambridge, Harvard, Berkeley, and MIT fell apart,” wrote Hazlett, “and by the 1980s the very solutions that Keynes had hustled were being painfully thwacked as precisely the root of our troubles.” And so the old became new again. The classical economic medicines—savings, investment, balanced budgets, competition, and productivity growth—received new respect. Even the pols, always so eager to receive Keynes’s justifications for government spending, abandoned Keynesianism (publicly, at least).

Then out of the blue in 1974, Hayek was awarded a Nobel Prize in Economics. “Quickly,” wrote Hazlett, “he was transformed from goofball to guru.”

[continued]

UAW Endorses Sweeney
for AFL-CIO Re-Election

Key Endorsement Will
Prolong the Labor Civil War

By Thomas Edsall
The Washington Post

John J. Sweeney, the embattled chief of the AFL-CIO, yesterday was virtually assured of election to a fifth term, after a key labor leader threw his support to Sweeney and undermined a long-festering challenge by labor dissidents.

While Sweeney, 71, now appears certain to win, the nation's largest union, the Service Employees International Union, is more likely to follow through on threats to bolt from the AFL-CIO. "The challenge here is to make sure we have a labor movement that can change people's lives," said SEIU President Andrew L. Stern, noting that all of his union's locals are voting on a proposal that would authorize the union to sever its ties to the labor federation.

[continued]

Pols discourage
more hospitals
InBusinessLV

The Las Vegas Valley gained two new hospitals in the past two years and there are plans to add others, but some say the valley will soon need more hospital capacity.

Bill Welch, president and chief executive of the Nevada Hospital Association, said Nevada ranks near the worst among states for its bed-to-population ratio.

"That's based on what our population is today," he said. "You add two new hospitals in the next 18 to 24 months we will probably move up from the bottom to the middle initially, but within one or two years if the population continues to grow we'll be behind the 8-ball again."

He said Nevada will also remain behind the average or break even unless hospital expansions ramp up or the population growth slows.

"Based on everything in the legislature and the criticism of the industry, I don't see that the hospital community is going to get any more aggressive in building hospitals," he said.

[continued]

'Core' inflation doesn't work -- in either your stomach or your gas tank

by Doug Gillespie
PrudentBear.com

For people who do not eat, heat, air condition, drive a car or use public transportation, the "official" U.S. inflation data of the past several months have not been as bad as they have for people who engage in the forgoing. Trouble is, people in the real world regularly engage in those activities!

This clearly explains why people are becoming increasingly perturbed at how big a deal Wall Street -- and the Federal Reserve, too -- make of the difference between inflation results that are computed and expressed both ways, but most particularly, with the inordinate emphasis that is placed on the so-called "core" results. And this does not take into account how few people think that even the higher set of numbers vaguely reflects their own experience.

[continued]

Businesses uneasy
about tying wages to CPI
InBusinessLV

Employer advocates say they prefer the Nevada Senate's version of legislation to raise the state's minimum wage -- which is higher than the original version approved by the state Assembly, while local labor advocates say the new Senate version guts the bill's most effective provisions.

The Senate Commerce and Labor Committee approved a version of Assembly Bill 87 to raise the minimum wage from $5.15 an hour to $6.40 an hour beginning Oct. 2006.

[continued]

Air Sickness: Who’s to
Blame for Airline Woes?

Capital Research Center Labor Watch

Summary: Business travelers, family visitors, tourists—all are affected by the airline industry’s woes. But who knows what really caused the problems in the first place? Industry expert and former pilot Vaughn Cordle blames management-labor relations for preventing fair competition. Next month: a closer look at how unions have harmed airlines.

A specter is haunting America’s airline industry: It’s the ghost of Eastern Airlines. Once one of America’s largest carriers, Eastern went out of business in 1991 following a prolonged, crippling and acrimonious strike. The episode was a nadir for labor relations in the airline industry.

[continued]

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