For five years, at least, American business has been in the grip of an apocalyptic, holy-rolling exaltation over the unparalleled prosperity of the "new era," upon which we, or it, or somebody has entered. Discussions of economic conditions in the press, on the platform, and by public officials have carried us into a cloudland of fantasy where all appraisal of present and future accomplishment is suffused with the vague implication that a North American millenium is imminent. Clear, critical, realistic and rational recognition of current problems and perplexities is rare. Changes in the structure and processes of American industry and trade have been swift and sweeping, as the President's Committee on Recent Economic Changes has so well shown. Have these changes fundamentally altered the conditions of economic security and progress for either the individual business man or the nation? The simple truth is that we do not know. The Committee was honest and scientific enough to say so. American business should be sane and sensible enough to recognize it. There is not a single new and important development in our economic life in recent years of which we can confidently calculate the consequences or judge the soundness and permanence. We have seen an amazing increase in man-hour production in industry since the war, but we do not know why it took place then, or whether it was merely a resumption of a rise, quite as rapid, that had been going on for fifty years before the war. We certainly do not know how long or rapidly it can continue, or, if it does, whether and how the problems of adjusting employment and consumer purchasing power to it will be met. We have seen new industries rise like rockets, and old ones grow tired and die. We do not know how soon the new ones will fizzle out, or what others will take their place. We have seen the machinery of distribution formed and reformed into new patterns changing every day before our eyes, but no one can say precisely where they leave the consumer and the independent enterpriser, or whether they will fundamentally alter the costs of distribution or mitigate the rigors of commercial competition. We have seen security prices soar out of sight of earnings, brokers' loans swell till they absorb a third of the banking resources of the country, and the blind pools of ancient days return and multiply by endless crossing and pyramiding as the investment trusts of today. Banks merge and emerge in chains, trailing trusts and holding companies, while industrial corporations pay dividends not by producing goods but by buying each others' stocks and by borrowing and lending everybody's money in the market. But of all these things can anyone say with surety what they signify, whether they are safe and sound, or what they are leading to? We do not even know, or cannot agree, whether inflation exists, what it means, or how it shall be measured. In face of the ignorance, uncertainty, and irrationality that surround every aspect of the "new era," it were wisdom for business to keep its feet firmly on the ground and assume for the present that the principles that prevailed through the long business past still govern the stability and success of business today. Business Week -- September 7, 1929 --------------------------------------------------------------------------------

ITULIP>COM

-- JB (noway@jose.com), February 16, 2000

Answers

Sorry. Thats www.itulip.com

-- JB (noway@jose.com), February 16, 2000.

Also, uc2.historyrepeats.wow

-- dinosaur (dinosaur@williams-net.com), February 16, 2000.

hah.thingsaredifferentthistime.not

-- dinosaur (dinosaur@williams-net.com), February 16, 2000.

Great Post!

justthinkin

-- justthinkin com (justthinkin@oil.com), February 16, 2000.

ihopethereisasafety.net

-- Joseph Almond (sa2000@webtv.net), February 16, 2000.

Well, one thing that history teaches us is that "spin" is not a new thing. I'm reading Frederick Lewis Allen's book Only Yesterday written in 1931. In September of 1929 the market started to slip (one more time), and continued into October. the consensus was that the market was readjusting itself into a "more secure technical position." Why didn't people get out of the market when the writing was on the wall? Speculators "proceeded to take advantage of the lesson they had learned in June and December of 1928 and March and May of 1929: when there was a break it was a good time to buy."

Sound familiar?

But the following is absolutely classic. In Herbert Hoover's acceptance speech at the Republican Convention in 1928 he said:

"We in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us. We have not yet reached to goal, but, given a chance to go forward with the policies of the last eight years, we shall soon, with the help of God, be in sight of the day when poverty will be banished from this nation."

Apparently, God had other plans.

-- Susie (Susie0884@aol.com), February 17, 2000.

And, a couple of other whoppers for the Harvard Economic Society in 1929. October 19th: ". . .if recession should threaten serious consequences for business (as is not incicated at present) there is little doubt that the Reserve System would take steps to ease the money market and so check the movement."

October 26th: (3 days before the BIG one) "despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation."

-- Susie (susie0884@aol.com), February 17, 2000.

Great quote. Reasonable & well informed men might well see a bad ending to the mania soon. Technicals indicate that the Dow is at a turning point. If it breaks above 10,750 in the next days, a rally to new highs would be likely. If the Dow breaks below 10,250, the next stop could be a long way down, perhaps to the sub 5000 level indicated by long term technicals, & historic key ratios. As with Y2k, however, there may be hidden factors which confound us well informed doomers. We all know that goverments lie. We may not know how much, however, or even in which directions. Consider for example, the oft-quoted statistic which has the average American family burdened with an alarming $100,000 in government debt. Now consider that complex offsets to this figure are concealed in off budget items like bond indebtedness reduction, increases in net asset value of collateral, etc, etc, too abstruse for we mortals to comprehend. Yet very real. Totalling perhaps $275,000 more or less liquid assets for every American family. These assets, are of course not available to us, but are controlled by a shadowy cabal of bureaucrats, interlocked corporate (multinational) directorates, world criminal syndicates & executive branch insiders. If this were a made in hollywood movie, Robert Redford would get elected president & order a Comprehensive Annual Fiscal Review, or CAFR. Remember that acronym, if you ever want to ruin a beaucrat's day. The economy would be made whole, solid, equitable & safe, we ordinary schmoes would enjoy a higher real standard of living, our kids could dream of buying a house, etc. In fact, the hidden CAFR money is just there, continuing to benefit the few. And if a stock market crash or recession appears emminent, or if it occurs, the timing & how it plays out are apt to be influenced by these hidden fundamentals. I see several ways this hidden money could influence the crash we suspect is emminent. 1) The crash doesn't happen, the CAFR money provides a hidden push to a scenario eerily similar to the "New Paradigm, stocks can only go up, technology will save us all" (Pollyanna) crowd story. 2) The crash doesn't happen. Foreign debt holders get ripped off big time, as distortions in short & long term interest rates, speculation send bond values in violent & unpredictable directions. International currency speculators (More of the CAFR crowd & buddies) continue to bankrupt whole countries, human misery & world instabilty increase, but here in the US arms sales are up, business goes on as usual. Maybe Dow 8500 for a brief instant, but just too much hidden money keeps the game afloat, no depression occurs. 3) The crash happens, a depression comes on, but the hidden distortions persist, the elite use the hidden cash to solidify their hold, Jefferson's dream slips futher into a Clockwork Orange/ George Orwell on steroids, banana republic 2005 nightmare. And we moderate & well meaning doomers are sorry we ever wished for a drama to straighten things out. 4) ? The hidden money, the instability in the markets, the revolution in computing power, tech breakthroughs, human yearning for a world that works, new invented communities & networks come together in a way that combines elements of all the above, and more... Comments? Greg

-- Greg Donovan (GREGD49@AOL.COM), February 17, 2000.

I can't add anything,that would improve this Post. Right on.

-- Broke (no@cash.anywhere), February 17, 2000.

Greg,
Loved your comments, hate the format.(grin)
If you put a <P> at the start of each point, they will
have some "white space" to make them easier to read.

You can "mix -n- match" HTML and plain text in your posts.

I fear that your scenario #2 will happen for at least this (election) year.

-- Possible Impact (posim@hotmail.com), February 17, 2000.

For anyone who is not familiar with the CAFR scandal....

CAFR Scandal

Comprehensive Annual Financial Reports (CAFRs) Report on CAFR Research by Walter J. Burien, Jr.

Introduction

Walter Burien Jr. worked as a Wall Street commodity trader for fifteen years, but now resides in Arizona. According to Mr. Burien, every state, county and major metropolitan city is keeping two sets of books. One set (the Budget) is commonly available and tracks each governmental entitys casts and tax revenue. The Budget is the financial record thats seen by the public and used by politicians to justify new governmental services and higher taxes.

However, there is a second set of books (called the Comprehensive Annual Financial Report, or CAFR) which is virtually unknown to the public but contains the real record of total governmental income. According to Mr. Burien, although the Budget gives an accurate account of government costs, only the CAFR gives an accurate account ot governments income.

For example, while a particular state budget might report receiving $20 billion in taxes (just barely enough to sustain its $20 billion in costs) - the CAFR might reveal the states real income is in the neighborhood of $60 billion - three times as much as reported on the budget. If these allegations are accurate, the particular state could stop charging all the taxes we are familiar with and, not only survive but, either double the amount of reported government services or give every citizen a huge tax rebate.

The implications are mind-boggling. The CAFR's reveal that the world is so different from what we are led to believe, so much more corrupt than suspected, that we are left with three choices, either; 1) government agrees to end the deception and stop overtaxing us, or 2) the American people agree to accept their status as slaves, or 3) both sides refuse to agree and precipitate a shooting revolution. The issue is that big.

Are Mr. Buriens allegations correct? How could any governmental entity dare to routinely overcharge its citizens by 200%, underreport its income by 2/3rds, and knowingly press for higher taxes based on an inaccurate budget? Worse, how could such a fraudulent system become widespread among all states, counties, cities and the Federal Government?

Those who have made efforts to verify Burien's research indicate that the conclusions drawn by Burien are probably correct. For instance: The State of Alaska and the city of Anchorage both use Budget/CAFR accounting systems that conceal a breathtaking difference in reported revenue. Another researcher in Wyoming claims that a comparison of his states budget and CAFR also support Mr. Buriens arguments. In every case, there are two sets of books and the income reported on the budget is millions or billions of dollars less than is reported on the CAFR.

These verifications of Burien's research and findings lend credence to his allegations.

What follows is an amalgam of statements or implications raised by Mr. Burien in various interviews.

Mr. Burien reports first discovering the CAFR report in New Jersey in 1989, when he helped start a New Jersey tax protest group called "Hands Across New Jersey." While involved with that group, Mr. Burien read in the states Annual Budget that the total cost of all public services was $17 billion and the "net available" (the money on hand to pay all bills) was $24.6 billion. But then he asked the first question the IRS asks in any audit: "What are the gross receipts?" He added the figures from various sources and came up with about $44 billion and began to wonder how the state could have $17 billion in costs, $24.6 billion in cash on hand, and $44 billion annual income? The numbers didnt add up, so he began to dig deeper.

Because his father had been Personnel Manager for the State Treasury for eight years, Mr. Burien understood how to get around in the various government departments. The state Director of the Budget was on vacation, so Mr. Burien called one of his lowest level assistants and said, "Im working on a report for Richard [the vacationing Budget Director] and I need all the figures on the autonomous agency accounts, interest accounts, investment accounts." The assistant said, "Ohh, you want the CAFR." This was the first time Burien had heard of CAFR but he said, "Yes" and the assistant mailed it to him.

The CAFR showed that New Jersey had liquid investment funds (cash) of $188 billion; common stocks worth $70 billion, $10 billion in loans due from public and private corporations, and $14 billion in insurance company equity participation. The little state of New Jersey, which admitted to less than $25 billion in annual income on its budget, reported $300 billion in cash, stocks, loans and equity participation on its CAFR. According to Mr. Burien, "On that day, I learned the definition of syndicated organized crime."

The scam worked something like this: Anything that was a cost or expense for public services (the traditional side of the Annual Service Budget, such as the Department of Transportation, health and welfare, etc.) was reported on the Budget where public taxes paid 100% of the bill for those services. That was $17 billion.

However, any governmental agency that was a profit center (the Port Authority for New Jersey, the New Jersey Turnpike, and investment accounts, etc.) that generated no-tax revenue was "restricted by statute from being reported in the Annual Budget. Why? Because the state legislature passed laws to prevent reporting the income from profit center on the Budget. Instead, income from these profit centers was disclosed only on the CAFR.

But that disclosure was not immediately apparent. For example, when Mr. Burien looked for New Jerseys 1989 "gross cash receipts" in the CAFR, he found the figure buried on page 174, under the "Waste Water Treatment Trust Fund." It showed the amount of the total cash receipts for 1989 from all 69 autonomous state agencies and departments was almost $87 billion. In other words, New Jersey was charging $87 billion to provide $17 billion in public services. New Jersey citizens were paying $5 for every $1 in services they received, and the state was pocketing the other $4 as "profit."

The CAFR also reported the state owned $32 billion in common stocks - but this figure was footnoted. The footnote revealed that the stocks were valued according to their original purchase price, not the current market value. In other words, if the state bought a stock in 1968 at $1.25 a share and its worth $3,000 a share now, they still report it on the CAFR as worth $1.25 a share. Burien determined that the true market value for the "$32 billion" in stocks reported on the New Jersey CAFR was actually about $70 billion.

But Mr. Burien goes further - he claims that the dual system of books is not unique to New Jersey, but also common among all fifty states. Moreover, he claims the dual accounting system was not only used ten years ago, but is still being used today.

For example, "In 1987 Arizonas annual service budget reported $2.8 billion in revenues but the states 1987 CAFR reported total cash receipts of $3.1 billion, a mere $300 million difference."

"However, in 1997, Arizona reported an Annual Service Budget of $5.5 billion while the States CAFR (printed by the Auditor Generals Office) showed total gross cash receipts of $17 billion. Thats a difference of over $11 billion. In just ten years, Arizona had caught up to New Jersey in that both states annual budgets reported less than one-third of the actual gross income seen in the states CAFRs.

"CAFR reports indicate that the composite totals for all government (Federal, state, county and city) ownership of publicly traded stocks exceeds $32 TRILLION (53% of the total ownership of all listed stocks), $8 TRILLION in insurance company equity (should we be surprised by high priced mandatory auto insurance or unaffordable health care?) and $5 TRILLION in Bond Surety Escrow Accounts for future liability of existing or potential debt.

Governments use Bond Surety Escrow Accounts to evade that pesky little rule that government should not operate at a "profit." That is, government should not impose more taxes than it actually uses to run the government. By designating tax revenue that exceeds operating costs as "Bond Surety Escrow" for future liability, government avoids calling excess revenue a "profit" and is thereby enabled to continue to enrich itself at public expense.

To illustrate the potential for abusing "future liability payments," consider the New Jersey plan in the 1950s to build the New Jersey State Turnpike and Garden State Parkway Authorities. The state asked voters to approve a $7.5 billion bond to construct the turnpikes. The state explained that these turnpikes would be operated as toll roads by the bondholders until the $7.5 billion bond was paid off - but the bondholders could not operate the toll roads at a profit. Once the bonds were repaid, the turnpikes would revert back into the states Annual Budget as a normal cost/revenue item. The public voted Yes.

Over the following years, the state sometimes alleged that the toll revenue from operating those turnpikes failed to cover their operating expenses, and so additional bonds were passed to fund the turnpikes. As a result, in 1990, the total bond liability still owed for the turnpike had grown to $14.5 billion. But guess how much was in the Bond Surety Escrow Accounts? $38 Billion! Enough to repay the original $7.5 billion bonds almost four times!

How could that happen? Say the toll road made a $400 million profit for the year and the scheduled payment on the $7.5 billion bond was $100 million. The state made the $100 million payment but kept the extra $300 million in a Bond Surety Escrow Account for future liability payments. Although they kept the $300 million, they did not declare it as an asset but wrote it off as a line item payment. In other years, even though they made a profit, theyd allege that they lost money and therefore floated more billions in bonds. (Guess who pays?)

The bottom line is that New Jersey is collecting hundreds of billions of virtually unreported dollars from all the autonomous agencies. The motivating factor is not public welfare, but control of those billions.

Mr. Burien not only alleges that the dual accounting system exemplified by CAFR is not only used by all fifty states, but also by all counties, cities and the Federal Government itself. If Mr. Buriens allegations are correct, they comprise the most damning indictment of big government yet seen. In sum, Mr. Burien implies that our government is in fact a criminal enterprise bent on oppressing Americans by extorting several times as much tax revenue as it spends on public services and using the majority of those extorted revenues to enrich, empower and enlarge government at public expense.

According to Mr. Burien, although the public is absolutely ignorant concerning CAFR, the primary cause for that ignorance is not the politicians but the mainstream media. When Mr. Burien first discovered the CAFR reports in New Jersey in 1989, he went on radio 101.5 FM in a live 45 minute interview. Two days later, that radio station was threatened with losing its license and was almost shut down. CAFR had become another example of - "third rail journalism" - any reporter or media outlet that touched the issue would be silenced or driven from journalism. As a result, theres been a total mainstream media blackout on disclosing CAFR reports.

Mr. Burien reports the discovery of the fact that New Jersey State Judges are vested in a personal retirement guarantee of $5,000,000.00, per judge, after they serve as judges for one year. Do you need anyone to spell it out for you? Would a New Jersey State Judge allow an attack on the squirreled away $Billions and jeopardize his entry into $Millionaire$ status? The inner circle gets the gold!!

Later, Burien learned that the New Jersey official in charge of discrediting his CAFR discoveries was a former reporter whod been appointed Assistant State Treasurer - even though he had no former financial background. Burien investigated his background and learned that as a reporter he made $35,000 a year. But as Assistant State Treasurer he made $65,000 a year - plus a Carte Blanche expense account of $125,000. !????????

Burien claims this was not an aberration: "I knew there was a state data search department which tied all agencies and departments together. I called that department and asked for a data search on all key level directorships and supervisory positions for all budgetary or autonomous agencies, and they came up with some 3,500 names from several administrations. Almost 1800 of these Directors were former editors or reporters! It is a virtual certainty that many of these appointments were payoffs for the journalists previous "cooperation" in spinning or silencing stories to suit government.

If you conduct a comparable search in other states, you may find a similar symbiotic relationship between government, editors, and reporters. If so, the medias "liberal, pro-government bias" may run much deeper than anyone has imagined, and the military-industrial complex" described by President Eisenhower in the 1950s may have been replaced by a "media-bureaucracy-banker complex" in the 1990s.

Therefore, Mr. Burien recommends that once you analyze your states Budget and CAFR reports, you insist that your local news mainstream media (TV, papers, radio) raise the "Public Awareness" by reporting the difference between the composite "total of cash receipts from all agencies, departments, investments, etc." and the "actual total composite revenues held or controlled."

If your local media refuse to publicize your states CAFR, they may be cooperating with a criminal agreement which has effectively silenced public disclosure of the CAFR reports for over forty years. However, once Americans know how much money is out there, where its coming from and where its going - the governments game will be over.

Any media that refuses to make immediate mention of the CAFR report should be publicly and aggressively boycotted. Media exposure is the jugular vein of the evil and corruption. Walter J. Burien, Jr. P.O. Box 11444 Prescott, Arizona 86304 Tel: 520-445-3532 Email: cevi@aol.com

-- OR (orwelliator@biosys.net), February 17, 2000.