V. on the American economy

[Doug Millison]

"[...] Captains of industry were less interested in economic efficiency
than they were in extracting gains by transferring ownership via the medium
of saleable rights to property (as) managers sought to enhance intangible
assets rather than produce goods...It seemed obvious that production and
output were entirely dependent on the pecuniary needs of the
financiers...(taking) close note of interlocking directorates, holding
companies, and watered stock. Their price policies...were geared to the
maximization of profit through the enforcement of scarcity. Supply and
demand could not be the genuine foci of attention in economics, so long as
it was possible for business to resort to a 'conscientious withdrawal of
efficiency.'

"...Moreover, credit was pyramided, one form piled on the other,
particularly through capitalized prospective earning power. The process
became quite complex, so that the distinction between credit and the
underlying tangible goods was obscured. Soon perceptible discrepancies
developed between business values and the equipment they were supposed to
represent. As the economy entered upon its anticipated state of euphoria,
the growth of intangibles soon out-sped the expansion in real goods. A
credit inflation ensued, which eventually turned into forced liquidation of
assets. Creditors feared that the discrepancy between business and real
values had gone too far, and the demand for debt repayment initiated the
economy's downward movement."

A scathing review of the Enron Scandal? Off by 75-80 years. These
paraphrased words were the indictments of the Teapot Dome era, the
notorious oil scandal of the Warren G. Harding Presidency over
three-quarters of a century ago, wherein secret insider oil deals allowed
illegal drilling of the Naval Oil Reserves. These words were an indictment
of "commercial sabotage", the process whereby businessmen used the "arcane
skills of bargaining, effrontery, salesmanship and make-believe...to make
gains at the cost of the community".

These were the ideas of a sociologist named Thorsten B. Veblen (1857-1929),
the son of an immigrant Norwegian farmer in Wisconsin, who went on to teach
at the University of Chicago. He was the author of The Theory of the
Leisure Class, coined the term "conspicuous waste", and pre-figured the
conditions that led to crash of 1929. He could have obviously been talking
about Enron. [...] "

from:

March 22, 2002
Commercial Sabotage?
Enron's Attack on Nation's Economic Security
By T.W. Croft
http://www.counterpunch.org/