From: Emlyn O'regan (oregan.emlyn@healthsolve.com.au)
Date: Mon Jul 01 2002 - 22:15:04 MDT
> Oh my, what a big mess! You know, instead of putting CEOs and
> accounting firms on trial, or in addition to them, I want to see
> top SEC heads on the line. Isn't getting the facts about the
> state of companies and avoiding this kind of fraud part of what
> the SEC is charged with? They obviously failed and we were
> obviously harmed thereby.
>
> On top of the world political and military insecurities and the
> already running financial meltdown of the US and other
> countries, we now have it that we can't trust even the biggest
> and most established corporations to report accurately. A lot
> of people will bail from stocks once this sinks in. Harm indeed.
>
Why, in all the commentary about big business naughtiness, does everyone
lament that "we can't trust even the biggest and most established
corporations"? I would have taken it as a given that you couldn't trust
them; if they care about our trust at all, it is more that they care that we
trust them, and don't find out what they are really doing.
This is *competition*. The successful competitors do whatever it takes to
get where they are. Reporting rules aren't some kind of moral code, they are
an imposed piece of the environment that the competing org will try to use
to its advantage, so that, ultimately, it comes out thumbs up according to
it's fitness function (with the added complication that oftentimes
individuals in control will put their personal interests before those of the
org).
How come this is news? Why are people jumping up and down about how the
public will lose faith in the system? Good grief... this kind of behaviour
is so clearly implied by the business environment. So WorldCom diddled its
books; it sounds as though it was an awesome approach, given the environment
it was in (and its expectation that this bull market would continue ad
infinitum). Sure the behaviour brought it down, and wrecked a lot of other
entities' plans as well, and contributed to a giant global waste of
resources. But, it would have looked like a damned good idea at the time.
And you want to nail the government for it. Weird naivety.
Emlyn
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