“If the choice is between doing too much and nothing at all, I’ll choose the latter every single time.”—Jonah Goldberg
“If you see ten problems rolling down the road, nine of them will roll into the ditch before they hurt you.”—Calvin Coolidge
Thank God Congress will soon be in recess! Maybe back in “flyover country” members can listen to some common sense about the frenzy over corporate misdeeds and what to do about them. When I hear people like Sen. Paul Sarbanes declare, “we’re out to restore capitalism”, and the bill to increase regulation of the accounting profession is approved by the Senate on a 97-0 vote, I fear for the republic. Even the vote to declare war on Japan was not unanimous.
Where do we get this idea that it is the business of government to intervene in every instance where there is tragedy or economic loss? The political class has been led to believe that there should be a government answer for every misfortune, including those that are the result of the vagaries and over-indulgence of the market. It reminds me of the old comic strip, “There Oughta Be A Law”. Why is this the case? Because the people expect it and the political class, both Republican and Democratic, is only happy to accommodate. I submit this came from an entitlement culture that grew out of the progressive philosophies of the early 20th century and was given impetus by FDR and his four freedoms. If entitlement doesn’t drive greed and deceit, it gives them a big push.
Do we need some corrective measures to shore up corporate governance? Sure. Do we need to correct the glaring conflicts of interest in the accounting/consulting and investment banking industries? Absolutely. And the crooks should go to jail. But the markets will punish substantially all the non-criminal bad behavior and have done a pretty good job of it already, with U. S. market losses of about $1.5 trillion since the first of July alone. In my opinion, we have now reached the point where the markets now fear regulatory overkill most of all. More regulation and more government is not the answer. More integrity is. Rules are never a substitute for ethics.
There is nothing new here but, as one analyst on CNBC pointed out, people are watching and want to know what behavior will be rewarded and what will be penalized. And while we’re on the subject of ethics, who gave us our most recent lesson? Which teacher-in-chief (President) of the past 22 years was most instructive on this subject? Was it the “decade of greed” of the 1980’s that produced this phenomenon? No. It was the “irrational exuberance” of the 1990’s, during which we were pondering the definition of “is” and wondering whether character counts! And, by the way, does anyone care to compare business waste, fraud, and abuse with those of government? No contest.
Meanwhile, President Bush and the Republicans have joined the push to find a government solution. I just hope we can get past the November elections before permanent damage is done.