What’s Wrong with Capitalism
The conviction of Bernie Ebbers, former CEO of WorldCom, of the biggest ever corporate fraud, prompted the New York Times to feature a rogues gallery of American business. Pictured where half a dozen or so business leaders facing charges of having cooked the books. It was a portfolio of business’ bad boys - Jeff Skilling (Enron), Ken Lay (Enron), Dennis Kozlowski (Tyco), Richard Scrushy (HealthSouth), John Riga (Adelphia), Richard Grasso (NYSE). All are looking at serious jail time.
What’s telling about these guys with their somewhat off beat names is the scope of the fraud. We’re talking about tens of billions of smackeroos. That’s just for openers. Factor in investor losses, job losses, income losses and you have enough losses to win the Iraqi war.
What’s troubling is the system that allows such enormous criminality. It’s not easy to defraud so many of so much. To pull it off a lot of people have to be complicit. Banks have to lend the money, accounting firms have to bless the books, brokerage firms have to tout the stock and lawyers have to OK the entire enterprise. All have to participate in the financial shenanigans or at best turn a blind eye.
Yet the poster boys of corporate corruption are just the tip of the iceberg. Below them are a slew of unheralded crooks. Their rackets, in the mere millions, don’t hit the media’s radar screen.
Defenders will point to other professions with egg on their face. Journalists have been known to file false stories, politicians have taken bribes, doctors have overcharged and scientists have faked research. All this is true except business malfeasance is on a scale all its own. Think of the damage done by tobacco companies holding back on the dangers of smoking. It’s cost them billions in compensation. Nothing comes even close to business.
How is it that so many people can be so corrupt? - so many educated, successful, powerful, smart people. How can so many leaders of America’s engine - business - be so dishonest?
What do you think? I’ll return to this topic in future blogs.
April 13th, 2005 at 8:56 pm
I have to fully discredit you on where you recieve your information. Richard Grasso (NYSE) is NOT seeking any jail time at all. The case aganist him is civil, not criminial and will never recieve any jail time. His actions however are should not be regarded as criminial, his “crime” is being paid too much money. So who should we charge for that? The people who paid him, the board. In the case Ken Langone is also being charged- he was the head of the compesenation committee. However, at the time of Grasso leaving the NYSE the head of the compensation committe was H. Carl McCall and why wasn’t he charged? With Spitzer, NY State Att. General, who is now running for governor he needs McCall’s strong democratic ties to help him win the race. Corporate business may be crooked as well as politics, but get the facts straight before you point your finger.
June 13th, 2005 at 4:18 pm
“How is it that so many people can be so corrupt? - so many educated, successful, powerful, smart people. How can so many leaders of America’s engine - business - be so dishonest?”
simple, capitalism is driven by(and has remained successful because of) greed. How can we avoid corruption when our economy is based on stock price, and stock prices are so easily fenagled?