From: Technotranscendence (neptune@mars.superlink.net)
Date: Sat Sep 07 2002 - 11:30:20 MDT
On Saturday, September 07, 2002 12:29 PM Harvey Newstrom
mail@HarveyNewstrom.com wrote:
>> The War on Business
>> by William L. Anderson
>>
>> With the recent guilty plea of former Enron executive Michael Kopper,
it
>> seems that the floodgates are now officially open in the government's
>> war against American business.
>
> I don't understand this position. These executives
> faked results. Their companies did not produce
> value or make results. The shareholders lost all
> their money while the fake reports said they were
> making money. What little real money came in
> was secretly diverted to the executives so the
> shareholders did not even get that. As these
> businesses collapse, the shareholders are left with
> nothing. They were duped out of their investments
> on deals that were known to be fraudulent.
Actually, in most these cases it remains to be proved that people
knowingly committed fraud. Accusations aren't enough here. Intent must
be proved.
However, yes, if you are right about this, then, yes, these people
should be prosecuted. And there's no need for new laws or a vigorous
prosecutorial campaign. Also, this should be a basically civil not
criminal action. The goal should be to get the money back -- as much as
possible -- from the executives found guilty of fraud.
> The executives took their money and gave them lies
> instead of real opportunity. No shareholder who lost
> their life savings would consider this to be "American
> Business".
Actually, a lot of novice investors think just that. They think that
this is how business works. Given the calls for jail time and the
like -- which won't refund any investor money and actually will costs
investors more, since they'll be paying for the trials and the prison
cells -- I think basically this has turned into a class warfare issue.
> The government is trying to prosecute crooks. There is
> no war on American Business. Legitimate companies
> producing real products and making real money have
> nothing to fear.
No exactly true. First, the government did not prove wrong doing before
the arrests. Since these guys are not likely to flee and also not
violent criminals, the arrests and parading before the media was purely
a political stunt aimed at giving the masses circuses when no bread is
forthcoming.
Second, with more government intrusions into the market -- proffered by
the myth that somehow before last summer we had total laissez faire
capitalism (each new episode of government intervention is always
predicated that we had economic anarchy until the new interventions are
in place). In this area, there will restrictions on how people can
invest, e.g., in 401 (k)s.
New disclosures, too, only add to the myth that a government approval is
a substitute for good judgment -- as when people die from FDA approved
medication. This only lessens the likelihood that people will use
common sense and develop a degree of skepticism when making investments.
I.e., it increases the likelihood of more risk taking in the future --
after all, the government has approved XYZ, Inc.'s statements, so they
must be a good risk -- and further interventions when these go awry.
As I said earlier, none of this excuses true cases of fraud, but fraud
enforcement does not require any new laws or new government agencies.
Likewise for avoiding fraud. (Fraud wasn't invented by Enron and Arthur
Andersen, you know?:)
Cheers!
Dan
See "Form and Content in Poetry: A Reply to Jackie van Oostrom" at:
http://uweb.superlink.net/neptune/Poetry.html
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