Sigh.

So let's consider some interesting stuff about the stock market. Stock options in high-tech companies, you may have heard tell, have created tons of new millionaires and are a splendid means of motivating employees. They also have this nice side benefit: They can cut a company's federal income tax to zero.

The San Jose Mercury News reports that Cisco Systems, Siebel Systems Inc. and America Online paid no federal income taxes in their latest fiscal year, the entire tax bill having been wiped out by tax benefits from issuing options to employees. The pattern is consistent across the high-tech spectrum, with Microsoft Inc., among others, getting a huge tax reduction. Cisco wiped out what would have been a $1.68 billion federal tax bill.

With stock options, the employee -- not the employer -- pays the taxes on the gain when the stock options are exercised, even if the profit is only on paper. The employer gets a tax benefit so as to avoid taxing the same transaction twice. This is nice for everyone but the feds -- in effect, a free lunch.

But (here comes the but) stock options only work when stocks are going up. As Gretchen Morgenson wrote in a recent Market Watch column for The New York Times, "When stocks plummet, the options become unexercisable and possibly worthless, and the construct starts to crumble."

This was starting to unravel even before the recent unpleasantness on the stock market. Morgenson cites one analyst who estimates that earnings by major companies were overstated by 6 percent last year because of generous option grants. The options cost the companies nothing to issue and saved them money on payroll costs. The savings go the bottom line, making a company's earnings look artificially high.

But Morgenson points out that workers are beginning to demand money rather than stock options at precisely the wrong moment, when their companies' operations are slowing down. She cites figures on unexercisable options ranging from 40 percent at Amazon.com and 36 percent at Microsoft to 16 percent at Dell. Another chart shows reductions in 1999 earnings if options were counted as costs, starting with 24 percent at Cisco Systems.

What's worrying about this is that widespread use of stock options is something new; no one knows what happens to option-workers when the economy slows down and stocks go into an extended slide.

Not that I normally spend a lot of time worrying about dot-com baby billionaires, but it's always a good idea to keep an eye on the wilder shores of capitalism. You never know -- they're always inventing something like an infallible hedge fund, which then has to be bailed out by those of us who don't understand hedge funds.

There is some political fallout from recent stock market gyrations.

Watching the price of oil shoot up may make W. Bush's novel proposal that we encourage energy exploration in Mexico in order to avoid dependence on foreign oil sound reasonable. Then again, maybe not.

Also on the relationship between politics and capitalism, Dick Cheney misspoke himself during his debate with Joe Lieberman. Lieberman was teasing Cheney about how well he'd done under the Clinton economy; Cheney shot back, "It had nothing to do with the government." To the contrary: During Cheney's CEO-ship at Halliburton, the company got more than $3.8 billion in government contracts and taxpayer-insured loans -- a 15-fold increase over the previous five years.

Halliburton was also a major donor to Texas' all-Republican Supreme Court, as well as giving to Railroad Commission candidates. As the Star-Telegram has already reported, Halliburton benefited from decisions at both the court and the agency. Is it possible that Cheney does not know he was hired by Halliburton precisely because of his government contacts?

Molly Ivins is a columnist for the Fort Worth Star-Telegram. To find out more about Molly Ivins and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com. COPYRIGHT 2000 CREATORS SYNDICATE, INC.

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