Sep 132004

” ..   A large, vital and expanding part of what is called the public sector is for all practical effect in the private sector.  . .  . ”

“Needed is independent, honest, professionally competent regulation – again, a difficult thing to achieve in a world of corporate dominance.  This last must be recognized and countered.  There is no alternative to effective supervision. …”


RECOMMEND:   scroll down to Item #2  (excerpts, Galbraith).








A chain of events:

–  I have paid little real attention to John Kenneth Galbraith since about 1970 when his book, “The Affluent Society” caught my attention.

–  In early August 2004 Galbraith’s writing came up in a conversation, he has a new book.

–  The very next evening a farmer phoned me, a person I had never heard of, from a place I’d never heard of.  One of my emails had been forwarded to him.  The conversation was about water issues and the Great Lakes.  And whose name should be introduced by the farmer but John Kenneth Galbraith’s.

–  Two hits in two days.  That is a strong signal for me to pay attention!

I start a re-read of “The Affluent Society“, without knowing why I am doing this. … In less than an hour,  … Eureka!

–  I had been working on the submission to the City: a decision against using vaporooter to chemically dissolve tree roots in sewer lines would be a first step in addressing our reckless disregard for what we are dumping into water supplies.

The critical point is not lack of information, but our inability to bring about change.  I was writing about “The dynamics of change“.  Presto!  right there in Galbraith’s writing is a description of “conventional wisdom” and how it operates.  (Conventional wisdom is something I know about at a pre-verbal level;  Galbraith articulates for me, I then recognize and move from pre-verbal to articulate.)  It was eureka! very helpful to the small work I was doing on “The Dynamics of Change“.

–  Next I read Galbraith’s most recent book, “The Economics of Innocent Fraud – Truth for our Time“.  (Galbraith is pretty amazing.  He was born in 1908 and publishes a book in 2004!)  In this book he describes the myth of democracy and the myth of how economies function today. He then states what is real.  We do not have a “market system” allocating goods in a democratic society, in spite of what might be taught in university classes.

–  I see the movie Fahrenheit 9/11.  It’s about what Galbraith is talking about.

–  This morning I sent the email encouraging people to see Fahrenheit 9/11.

–  Then went to my inbox to find “Halliburton’s Good Fortune Never Ends”  (courtesy of Hart).  Halliburton Corporation is featured in Fahrenheit 9/11.

–  For me, the better I learn to follow the serendipity, the more that life is an adventure.  I am being led (mind you, I have to exercise thoughtful intelligence and make a conscious choice whether or not to follow – a matter of learning to distinguish between the intuitive and flim-flam).  Excitement comes from the delight of discovering what lies along the path.  Without the serendipitous signals I would not be able to discern the path to adventure.



Published in 2004, John Kenneth Galbraith’s  “The Economics of Innocent Fraud – Truth for our Time” discusses the reality of politics and economics today.

Some excerpts:

The accepted distinction between the public and the private sectors has no meaning when seriously viewed.  Rhetoric, not reality.  A large, vital and expanding part of what is called the public sector is for all practical effect in the private sector.  . .  . 

In recent times the intrusion into what is called the public sector by the ostensibly private sector has become a commonplace.  Management having full authority in the modern great corporation (INSERT: as opposed to the Board of Directors), it was natural that it would extend its role to politics and to government.  …

At this writing, corporate managers are in close alliance with the President, The Vice President and the Secretary of Defence. Major corporate figures are also in senior positions elsewhere in the federal government; one came from the bankrupt and thieving Enron to preside over the Army.  …  

For some years there has also been recognized corporate control of the Treasury.  And of environmental policy.  And there is more …   (INSERT: Galbraith goes on to the role of corporations in U.S. Dept of Defence and Foreign Affairs.  I won’t copy that here – the article about Halliburton below is example.  “Some of the President’s Monsanto Men” written in the Idaho Observer and on web-sites is another example of this corporate “intrusion”.  I have used the word “infiltration” in the past.)   …

The blurring of the difference between the private and corporate sector and the diminishing public sector proceeds. …  

As the corporate interest moves to power in what was the public sector, it serves, predictably, the corporate interest.  That is its purpose.” 

“One obvious result has been well-justified doubt as to the quality of much present regulatory effort.  There is no question but that corporate influence extends to the regulators.  … 

“Needed is independent, honest, professionally competent regulation – again, a difficult thing to achieve in a world of corporate dominance.  This last must be recognized and countered.  There is no alternative to effective supervision. …”

Galbraith concludes his book by saying that the greatest human failure is war.

= = == = = = == = == = = = = =


This was in my inbox just after I sent the email encouraging people to see Fahrenheit 9/11.  The connections between Halliburton and the Bush Administration are shown in the movie.

Thanks to Hart.    Published on Saturday, September 11, 2004 by The Daily Camera (Boulder, Colorado)

Halliburton’s Good Fortune Never Ends

by Christopher Brauchli

My Cup Runneth Over  – 23rd Psalm

Good things keep happening to Halliburton.

It all started when the company’s former chief executive, Dick Cheney, became vice president of the United States, although he’s too modest to admit his election had anything to do with it. Had he and George W. Bush not been elected, it is unlikely that Iraq would have needed the repairs to its oil pipe lines that Halliburton has been working on and even more unlikely that there would have been American troops stationed in Iraq needing the kinds of services Halliburton has been providing. For that, at least, Mr. Cheney deserves full credit.

We must also give Mr. Cheney credit for the fact that Halliburton got its initial contract for work in Iraq without having to go through the annoying bidding process. The most recent developments mean Halliburton won’t be punished for poor accounting and has the opportunity to make back the money it had to repay or forfeit because of corruption or poor accounting, depending on one’s perspective. But it’s not all been roses for the company and critics should keep that in mind.

In 2003 it was disclosed that Kellogg Brown & Root had overbilled the U.S. government by $27.4 million for meals served to American troops. That, the company explained, was not KBR’s problem. KBR subcontracted the food service to an Iraqi company which billed for roughly three times more meals than it actually served its customers. KBR couldn’t have anticipated the overbilling even though it sent a memorandum to the subcontractor telling it to charge for “the projected number of meals or the actual head count — whichever is greater.”

In early August a Pentagon internal report disclosed that KBR had failed to fully account for a portion of the $4.2 billion it received for work done in Iraq and Kuwait. Explaining the failure, a company spokesman said that the government’s shifting needs and the complexity of providing logistical support made accounting difficult. The Pentagon’s report proved his point and was not without potential consequences.

Under government contracting rules, when an accounting is found wanting 15 percent of the amount owed must be withheld until accounting issues have been resolved. During 2004 Halliburton received two extensions to give it additional time to resolve accounting issues. The last extension expired on Aug. 11 and for a very short time it looked as though there would not be another extension. A company spokesman said the report was only advisory and the agency making it has “no authority to determine the adequacy of our systems.” She added that the Pentagon report is part of a routine process that is “amicably resolved.” She got the amicable part right although there were some anxious moments.

On Aug. 17 it was reported that the government planned to withhold about $60 million a month from KBR until accounting issues were resolved. That was distressing news to Halliburton, more especially since on Aug. 16 the army and the company had jointly announced that it had been agreed no money would be withheld and KBR would be given additional time to prove its costs.

Explaining the decision to give Halliburton extra time, Linda Theis, a spokeswoman for the Army Materiel Command, said the army was trying to be “fair and equitable.” Shortly after the announcement was made the army changed its mind about what was fair and equitable and announced it would withhold payments after all.

For a while it looked as though Halliburton’s string of good fortune had come to an end. Then one of those strange but serendipitous events occurred that seems to constantly befall Halliburton. Late in the day on Aug. 17, the army announced it had changed its mind yet again and would give KBR a third extension. That was not the end of Halliburton’s August good fortune.

A few days after the extension was granted the army announced that it planned to divide the $12 billion of work previously given to Halliburton among several companies and require Halliburton to bid on the contracts.

Although forcing Halliburton to bid on contracts it had received without bidding might seem like an unfavorable turn of events, it is not. David Lesar, Halliburton’s chief executive explained: “If we do choose to rebid, we’re going to jack the margins up significantly, ” thus suggesting that contracts Halliburton enters into with higher profit margins will make up for the money the company lost after it quit cheating the taxpayer. Give Mr. Cheney at least some of the credit for Halliburton’s good fortune.

Christopher Brauchli is a Boulder lawyer and and writes a weekly column for the Knight Ridder news service. He can be reached at  brauchli.56  AT

Copyright 2004, The Daily Camera

 Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>