The Raw Material of Freedom - July 12, 2002
A new era of intolerance has begun. The target is not one that typically elicits a huge amount of sympathy. And that's problematic because there's no sign that the current wave of insensitivity is going to ease up anytime soon.
What we're talking about is the frequently low-profile, beleaguered business executive.
Men and women in suits are getting dirty looks from people on the street. And accountants are lying about their profession, especially if they've ever worked for Arthur Andersen.
I know what you're thinking. Executives who manipulate things for their own best interests, as opposed to their shareholders', or accountants who don't count but instead are creative artists don't deserve to be treated well.
That may be true. If individuals have committed crimes, they should be prosecuted. And they will be, without any executive action on the part of the White House or any new piece of legislation from Congress.
Both Democrats and Republicans are eager to show voters that they're doing something about "corporate accountability." Not surprisingly, they've got an array of quick fixes that they're proposing.
But if we look further, we see that their solutions are girded with the same false assumption that we saw in gun control, campaign finance reform and a host of other legislative snake oil repair plans.
The bogus equation goes like this: Bad things that result from the non-enforcement of existing law will be made right with the issuing of new law.
It just isn't so. There are more criminal statutes for fraud on federal and state books than a battalion of bookkeepers could ever keep track of. Add to that the ability of an investor to sue an offending executive or accountant, and the means of holding a wrongdoer responsible is already there.
The private sector moves extremely fast, as observed by the recent reaction of the markets. Investors, as well as their advisers, will be scrutinizing balance sheets more carefully. This will inevitably result in less "inventive" accounting.
Still, politicians want to watch over the corporate world, which makes about as much sense as O.J. doing marriage counseling.
Politicians who now feign indignation at the wrongdoings of companies were some of the same individuals who extracted campaign dollars from, and took credit for, the economic boom the same boom that business and working people created.
They were also happy to spend the record tax revenues that the business boom produced.
Bush's sulking nemesis, John McCain, is predictably out in front on this issue. He's throwing around words like "crony capitalism" and aligning himself with strident devotees of big government.
Folks like these are on a constant quest for the next program, law or regulation. Their eyes aren't fixed on the people. Instead they're focused on publicity and riveted on the next election.
But their rhetoric runs contrary to fundamental American values and chips at the foundation of our nation's success. Particularly at this moment in time we need to conserve our greatest economic resource the raw material of freedom.
Empirical and historical facts illustrate that free enterprise and free markets are the best ways to improve the quality of life for everyone.
Russia and the new nations of Eastern Europe have been trying to distance themselves from their 75-year ordeal as part of the Soviet Union.
Despite the dismal record of the Soviet system, its defenders at the time insisted on bashing free enterprise. Capitalism was said to be inherently immoral and ultimately unworkable.
They told us that economic planning should be handled by the elite; that the elite will decide in a manner far superior to that of the chaotic free market.
They were wrong.
We can easily observe that any country that followed these dictates and had the state manage its economy has scarcity, lack and poverty to show for it.
Before we set out on the regulation spree that some of our leaders have planned, it's important to remember that the prosperity we enjoy did not come from government.
This will not stop many from using the issue of corporate accountability as a pretext to try to increase the scope of government. They'll tell us we can't trust corporate executives because they have too much power.
But more dangerous may be the greater power they want us to give to government regulators. Increased interference with the free market in the name of consumer protection will have the unintended consequence of distorting the markets. Where government has power over business, companies will naturally seek to lobby and influence the state.
Then politicians like McCain, who now want to increase government regulation of business, will act shocked when business tries to sway the decisions of regulators.
So what can be done about corporate corruption?
Prosecute the guilty. Enforce the laws we already have. Provide civil remedies to restore those defrauded.
But for our country's sake, and our children's destiny, leave the free enterprise system alone.