Date: Fri, 17 Jun 2005 00:26:13 -0700
From: Norm Matloff <matloff@cs.ucdavis.edu>
To: Norm Matloff <matloff@laura.cs.ucdavis.edu>
Subject: a reluctant comment on Thomas Friedman
To: H-1B/L-1/offshoring e-newsletter
I used the word "reluctant" in my Subject: line here, not because I am
reluctant to criticize New York Times journalist Thomas Friedman, but
because I am reluctant to give him any publicity. I don't mind people
who disagree with me, of course, but I get irritated if their views are
based on snap judgements rather than careful, thorough examination of
the facts. I get even more irritated if they hide the fact that they
stand to gain financially from those views which they present as being
for the public good. All of that is why I really don't want to give
Friedman any publicity (even if my "contribution" is tiny compared to
what he already has).
Friedman has always gotten lots of publicity, especially with his latest
big theme, which is basically, "Globalization is good, and its downsides
can be compensated by improving our educational system." He is one of
those who, for example, hold the Alice in Wonderland view that we can
solve our current problem of unemployed engineers and scientists by
producing MORE engineers and scientists.
Friedman just came out with a book on globalization, "THE WORLD IS FLAT: A
Brief History of the Twenty-First Century," which is being heavily promoted.
I've received quite a bit of e-mail from readers, suggesting I comment on the
book, but originally I didn't want to waste my time on such drivel. However,
this week two events made me change my mind: (a) I found that someone whom I
respect highly and is very knowledgeable about IT offshoring was unaware of
Friedman's book, and (b) an excerpt from his book appears in Blueprint
(formerly The New Democrat), a publication of the Democratic Leadership
Council (DLC).
The DLC is the Clinton wing of the Democratic Party (and for that matter, the
Gore/Kerry wing). Their philosophy is basically to out-pro-business the
pro-business Republicans, and take a centrist line on social issues. I've
been quite critical of the DLC in the past in this e-newsletter, for claiming
to be pro-labor when in fact they are just as anxious to please Big Business
as the Republicans are. See my posting at
http://heather.cs.ucdavis.edu/Archive/DemocraticParty.txt
In that posting, made during the presidential election campaign last
year, I pointed out the DLC's in-house think tank, the Progressive
Policy Institute, was espousing a pro-H-1B, pro-offshoring viewpoint.
Yet even I, in spite of my cynical view of the DLC, was surprised to
find that Friedman's book is excerpted in this month's issue of
Blueprint, the DLC magazine. You can read it at
http://www.ndol.org/ndol_ci.cfm?contentid=253354&kaid=107&subid=175
A few weeks ago a reader sent me e-mail saying that Friedman had been exposed
as being on Enron's payroll. That reader now believes that his source was
wrong, and I couldn't find confirmation of the claim. A 2002 Counterpunch
article made a claim along these lines, but it apparently was mistaken in its
citing of a Washington Post article (enclosed below) which reported that that
Friedman's fellow NYT columnist Princeton professor Paul Krugman (an
offshoring advocate) did indeed formerly have a $50,000-per-year retainer from
Enron. Nevertheless, Friedman does reportedly do a lot of speaking to
business groups, and I suppose it is likely that he does derive some income as
a consultant to firms.
But even more interestingly, When I checked the Web page of Intellibridge,
the consulting firm which allegedly wanted to hire Friedman to help with
Enron's PR efforts, guess who I discovered on Intellibridge's list of
consultants--Al From, founder and head of the DLC!
Speaking of H-1B, Friedman has a section in that Blueprint excerpt on
immigration of technical (and other) professionals:
Immigration. While we need to redouble our efforts to build
the muscles of each individual American, we have to continue to
import muscles from abroad as well. Most of the Indian, Chinese,
Russian, Japanese, Korean, Iranian, Arab, and Israeli engineers,
physicists, and scientists who come to work or study in the
United States make great citizens. They are family-oriented,
educated, and hardworking, and most would jump at the chance to
become an American. They are exactly the type of people this
country needs, and we cannot let the FBI, CIA, and Homeland
Security, in their zeal to keep out the next Mohammed Atta, also
keep out the next Sergey Brin, one of the cofounders of Google,
who was born in Russia.
This is typical of the attitudes of Friedman's class. To begin with,
there is the (rather racist) notion that all the world would just love
to immigrate to the U.S., the place where, as the Chinese saying used to
go, "Even the stars are bigger." Well, guess what--the American stars
have gotten pretty tiny lately, and engineers in most of those countries
Friedman lists are not so anxious to come here now, precisely because
people like Friedman have ruined the American job market for engineers.
Second, the Brin example is way out of line. First of all, Brin was a
family immigrant, not someone who came here as an H-1B or a foreign
student. But much more importantly, Google is not the only search
engine. There are lots of them. Friedman's implication that without
Brin we couldn't do Web searches is just plain false.
Friedman continues:
I would favor an immigration policy that gives a five-year work
visa to any foreign student who completes a Ph.D. at an accredited
American university in any subject. I don't care if it is Greek
mythology or mathematics. If we can cream off the first-round
intellectual draft choices from around the world, it will always
end up a net plus for America.
I myself have always supported a policy of rolling out the immigration red
carpet for "the best and the brightest" in the world. But where did Friedman
get the ridiculous idea that anyone who completes a PhD is a "first-round
intellectual draft choice"? A few people who get a PhD are indeed brilliant,
but most PhDs are not, whether in mythology (a category I can't help but
say Friedman's work belongs to) or mathematics or anything else.
Now consider this comment of Friedman's:
My friends Judy Estrin and Bill Carrico have started
several networking companies in Silicon Valley. "When I was eleven
years old," said Bill, "I knew I was going to be an engineer. I
dare you to find an eleven-year-old in America who wants to be an
engineer today. We've turned down the ambition level." Added Judy,
"Ambition comes from the parents. People have to get it. It will
probably take a crisis [to get us refocused]."
The fact is that any ambitious kid would be crazy to want to go into
engineering today, again because people like Friedman have ruined the
engineering job market.
Norm
February 10, 2002, Sunday, Final Edition
Correction Appended
Copyright 2002 The Washington Post
The Washington Post
Hard Money, Strong Arms And 'Matrix'; How Enron Dealt With
Congress, Bureaucracy
Joe Stephens, Washington Post Staff Writer
They called it "the matrix" -- a computer program that brought a
scientific dimension to Enron's effort to seduce politicians and sway
bureaucrats.
With each proposed change in federal regulations, lobbyists punched
details into a computer, allowing Enron economists in Houston to
calculate just how much a rule change would cost. If the final figure
was too high, executives used it as the cue to stoke their vast
influence machine, mobilizing lobbyists and dialing up politicians who
had accepted some of Enron's millions in campaign contributions.
"It was a new thing to be able to quantify the regulatory risk," said
economist Gia Maisashvili, who helped Enron develop the system. "We
were the pioneers." The matrix illustrates the brash, calculating
methods that Enron managers used to play Washington politics. The
company that made headlines by erasing rules and ignoring convention
in the business world applied the same principles in Congress, state
capitals and the administration, bragging that its shrewd political
tactics blew past customary constraints.
Enron's lobbying techniques grew so aggressive that a key member of
Congress reportedly exploded in anger when the company's chief
executive pressed him on deregulation matters. They began, however,
with a vigorous application of the most time-proven method: lavishing
campaign money on politicians.
At Enron, it was understood that executives receiving astronomical
salaries would turn part of the money back to the company's smooth
political operation. Executives raised vast sums through tactics that
some considered subtle coercion; the cash went to the campaigns of
Republican nominee George W. Bush and a slew of Republican and
Democratic lawmakers willing to help Enron bulldoze regulatory
barriers.
Other strategies were more imaginative. As one participant described
it, Enron "collected visible people" by gathering up pundits,
journalists and politicians and placing them on lucrative retainers.
For a couple days spent chatting about current events with executives
at Enron's Houston headquarters, advisers could walk away with
five-figure payments.
In Washington, Enron relied on high technology while planning its
attacks on Capitol Hill and executive agencies.
To gauge a particular bill's effect on the company's bottom line,
Washington staffers spent hours filling in boxes in the matrix.
Maisashvili and his fellow economists projected the costs of any rule
change into the future, adjusting for inflation and growth. "I would
tell [senior executives], 'This is your exposure. You decide whether
it is worth it to use the lobbying machinery,' " Maisashvili said.
But Enron's tenacious approach ultimately backfired with many key
figures inside and outside corporate headquarters, according to
interviews with more than two dozen former and current Enron
executives and with Capitol Hill staffers. The rise and collapse of
Enron's political machine parallels the arc of the corporation's
financial fortunes.
Maisashvili blames Enron's political arrogance for his decision to
leave the company last year. "They could have cared less if that was a
good thing [for the public] or not. They cared only if this was good
for Enron," he said.
Sally Ison didn't realize the presidential race had begun until April
1999, when a letter arrived bearing the signature of Enron Corp.
Chairman Kenneth L. Lay. The letter asked for contributions to the
Bush campaign and included what she recalls as a menacing reference to
her husband Jerry's compensation as a highly paid vice president.
"We didn't even know if we liked this guy," she said of Bush. "I
didn't know if I was going to vote Republican."
Yet there was no debate. Nearing 50, Jerry Ison felt vulnerable in
Enron's crushingly competitive culture. The Isons gave $ 2,000.
More than 100 other Enron executives, and many spouses, also gave
"hard money" contributions to Bush, much of it during the campaign's
critical early money phase. Some acknowledged in interviews that they
gave solely because they got Lay's pointed letter.
An Enron spokesman said there was nothing unethical in the
solicitations. Fred Wertheimer, head of a nonpartisan watchdog group,
Democracy 21, disagreed, saying such a pitch left workers and their
spouses little choice.
"It is symbolic of the incredibly aggressive approach that Enron and
Ken Lay took to playing the political money game -- and to building
influence," Wertheimer said. "It is wrong. You are crossing the line
from voluntary contributions to implicit coercion."
The contributions helped Lay fulfill his commitment as a Bush
"Pioneer," the campaign's term for its top rainmakers. Bush collected
nearly $ 114,000 in individual and political action committee
contributions from Enron in 1999-2000, according to an analysis by the
nonpartisan Center for Responsive Politics.
At Enron, senior managers understood that "donations mean access,"
acknowledged one former Enron executive who contributed to Bush. Said
another: "Everybody knows that's what you make contributions for."
Lay had cultivated access since founding the company in 1985. He was a
top fundraiser for President George H.W. Bush and chairman of the
Houston host committee for the GOP convention where Bush was nominated
for reelection.
When Bill Clinton bested Bush, Lay began working on a new friendship
and the company greased the way with political contributions to
Democrats. Lay was a longtime pal of Clinton's first chief of staff,
Thomas F. "Mack" McLarty, according to former Clinton administration
officials. Seven months after the inauguration, Lay had found a place
in the commander-in-chief's golf foursome (along with golf legend Jack
Nicklaus and former president Gerald R. Ford) in Vail, Colo., where
Clinton first vacationed as president.
To raise campaign cash, Enron relied not just on individual
contributions but also on a well-funded political action committee
that distributed money to candidates from both parties. The committee
supported candidates who vowed to champion deregulation and leaned
toward incumbents and conservatives, insiders said. Since 1990,
Enron's political committees have given federal candidates and parties
more than $ 1 million.
"It was more or less required that you participate in the political
action committee if you were an officer," said former Enron executive
Alberto Gude Jr.
"You would do it, period."
Lay's strategy of bringing influential public figures into the
company's fold was resisted by some of the company's own executives,
who feared it could backfire and lead to public embarrassment.
To earn their $ 50,000 annual retainers, the company's clutch of
pundits and commentators only had to make two brief visits a year to
Houston, an arrangement that some Enron officials privately suggested
did not pass the smell test. Among those agreeing to the arrangement
were pundits William Kristol, editor of the Weekly Standard, and Paul
Krugman, now a New York Times columnist. ("correction")
Lay called the group his advisory council, and he and then-chief
executive Jeffrey K. Skilling attended their gatherings, held in a
boardroom adjacent to Lay's office on Enron's 50th floor. "These are
exciting times, and we need all the ideas we can get," Lay wrote to
council members in December 2000.
Commentator Larry Kudlow of CNBC and the National Review said he
attended one council session as a guest, and received a $ 15,000
payment, in addition to a $ 20,000 consulting fee to his firm. The
company hired Republican pollster Frank Luntz after an executive saw
him on MSNBC and thought he looked smart, according to a former Enron
consultant.
Ralph Reed, the former Christian Coalition executive director and now
chairman of the Georgia Republican Party, worked for the company for
about 18 months, spread out between 1997 and 2001. He was brought into
the Enron fold on the advice of Bush strategist Karl Rove, an Enron
stockholder. Most of Reed's work -- in Pennsylvania and two or more
other states -- was for direct mail and telephone banks to promote
greater choice in electricity service, a source said. Lawrence B.
Lindsey, Bush's chief economic adviser, also was a paid consultant.
Enron approached James Carville, the Democratic strategist, in 1997,
after his Cajun shrewdness had helped return Clinton to the White
House. But Carville was interested in campaigns and Enron wanted him
to lobby for electricity deregulation in Pennsylvania, where he had
masterminded an upset Senate victory. Carville rejected the job.
Less well known is that Enron, which has at times sparred with
environmentalists, extended a retainer to the head of a Washington
think tank that focuses on energy and the environment.
Paul Portney, president of Resources for the Future, said he attended
five council sessions. Also participating, he said, was the
foundation's vice chairman, Robert Grady, a senior aide to the first
President Bush and a drafter of the 1990 Clean Air Act amendments.
In June 2001, Grady wrote a column for Time magazine that endorsed the
trading of greenhouse gas emissions rights, a business from which
Enron hoped to profit. Grady did not respond to requests for an
interview.
Enron gave Resources for the Future annual gifts of up to $ 45,000,
and Lay's family foundation pledged $ 2 million to endow a research
chair.
Portney called the stipend granted to advisers a "dream," but said the
money did not influence his views -- or his foundation's decision in
April 2000 to name Lay to its governing board. "I am pretty
cantankerous; I say what I want," Portney said.
The advisory panel fed Lay's ego and was "consistent with the idea
that you buy your way to success," said a former Enron political
operative. "It was clumsy and the joke was these people took the money
and ran. They accomplished little."
Kristol said he saw no conflict in collecting $ 100,000 from Enron,
likening it to pocketing a "regular and generous" honorarium for
speaking before a trade association.
"Enron senior executives wanted to broaden their horizons and hear
about interesting trends," Kristol said. "In late 1999, I explained
how [Sen. John] McCain had a real shot at beating Bush. I think Ken
Lay winced a little bit at that."
A council meeting scheduled for October 2001 was to include an
expense-paid trip to London. But as the date drew near, Enron reported
a third-quarter loss of $ 618 million and the Securities and Exchange
Commission opened an inquiry.
The advisers' free tickets never arrived.
Enron's tough approach to Washington evolved as Skilling and his
lieutenants ascended, insiders said. It was during Skilling's tenure
that the matrix was devised. Known for his abrasive style, Skilling
and those around him stepped up lobbying and sought out creative
strategies.
Historically, Enron operated with a lean Washington staff. It had two
full-time senior employees in the capital for years and used
relatively few outside consultants. That changed in the late 1990s,
and by last spring Enron's directory listed more than 150 staffers
working on state and federal government affairs.
In recent years major decisions -- including which public figures to
approach and hire -- were made in Houston without direct input from
the Washington office, former executives said.
"I don't think anybody in Washington came in contact with these
advisory boards," said Tom Briggs, a former Enron staffer in
Washington. "Ken Lay often came to town, and we didn't even know it."
Instead, he said, the Washington office dealt with Capitol Hill
staffers, dissecting the finer points of energy regulation.
Tales of dust-ups with lawmakers and their aides have circulated since
Enron's collapse. Most notably, during an October 1999 meeting on an
energy deregulation bill, Rep. Joe Barton (R-Tex.) reportedly exploded
in anger at Skilling, saying, "I may not have your millions of
dollars, but I am not an idiot."
"They were sophisticated enough to hire good people but then not
disciplined enough to hide their disdain for policymakers who did not
agree with them from the beginning," one lobbyist said. "When Enron
executives were advocating a certain policy and a member of Congress
tried to explain the votes weren't there, they became very frustrated
that he wasn't smart enough to understand the wisdom of their policy."
Enron staffers in Texas pushed the Washington office to abandon its
Beltway manners in favor of a more creative style. One former
executive recalls being chided to adopt a "South Park attitude," in
reference to Comedy Central's animated series populated with profane
and irreverent third-graders. The idea, the executive said, was to
push hard and not worry about making friends.
"The ingrained philosophy was, me first, money counts and the
government should eliminate my taxes," said another former manager.
"That's all they cared about -- what impacted them personally."
Staff writer Mike Allen, database editor Sarah Cohen and researcher
Lucy Shackelford contributed to this report.
CORRECTION-DATE: February 14, 2002
CORRECTION:
A Feb. 10 article on Enron Corp. said that Paul Krugman, now a New
York Times columnist, served on an Enron advisory panel. The panel on
which Krugman served in mid-1999 was composed of economists and
strategists as well as journalists. Krugman was not a full-time
journalist at the time but was an economist who contributed to
Fortune, Foreign Affairs, Time, the New York Times Magazine and the
online magazine Slate. Krugman signed a contract as a New York Times
columnist in the fall of 1999.
LOAD-DATE: February 10, 2002