The “CEO President” is now making a big flap about tossing cheating senior executives in jail:
With corporate scandal hearings taking place on Capitol Hill, President Bush said Monday new laws are needed to “punish abuses, restore investor confidence and protect the pensions of American workers.”
Now, just a couple weeks ago, before the whole Worldcom mess broke, everyone was running articles about how the investigations and calls for action had about petered out, with no sign that any real reform action was going to take place. Now, after Worldcom (and Tyco, and IMClone, and Xerox and Merck), we’re gearing up for a Great Crusade, designed to bring the evil-doers to justice.
What a load of crap. The saddest part of this is how exactly like the ways of corporate management this whole thing is. First, act shocked by whatever “bad thing” just happened. Promise to get to the bottom of it. Locate a scapegoat (in this case Andersen), and hang them out to dry in as public a manner as possible. Then, while assurring everyone that your level of concern is still high, and that Something Will Be Done, gradually let the thing die while everyone’s attention shifts to something else. If it happens again, well, launch a Great Crusade to Clean Things Up, but at all costs, never address the root problems. It is, after all, always easier to round up a few sacrificial goats and put them under the knife than it is to actually change the rules of the game.
I’ve seen this a thousand times if I’ve seen it once. In my opinion, it’s this unwillingness to rock the boat and create fundamental change in how business is conducted that’s at the core of these scandals, even more than the disgusting greed of the individuals involved. They didn’t do it just because they were greedy - they did it because they were sure they could get away with it.
Frankly, I doubt tossing a few of these assholes in jail, or passing new laws that mandate jail time for similar shenanigans is going to do much good. Jail time doesn’t seem to be a huge deterrent to murderers and serial killers, and a lot of these guys are just as sociopathic, albeit in a different way. Further, as we’ve learned again and again in this country, you can’t legislate morality. Laws and punishment aren’t going to significantly increase the integrity of a class of people who have been socialized to believe they don’t have to have it.
We had a system that required a high degree of transparency in our business dealings. That system was the envy of and model for business in much of the world. These recent scandals have shaken the faith in that system. Tossing a few multi-millionaires in jail, but not taking steps to re-establish real transparency in the system isn’t going to restore that confidence, either here or abroad.
Sure, throw the bastards in jail if it makes everyone feel better; they undoubtably deserve it. If nothing else, it’ll keep them away from the helms of other large corporations for a few years. More importantly though, we have to stamp out the loopholes, conflicts of interest, and outright bad legislation that allowed this situation to come about in the first place. We have to dismantle the whole ediface of work-arounds that have come into being during the past twenty years that had only one real purpose - to preserve the illusion of transparecy while actually encouraging the unscrupulous to dip their hands in the till again and again.
Despite what Bush and his advisors are saying, most of this structure of bad legislation and crippled regulatory agencies is a legacy of Republican administrations and a Republican Congress. I’m not surpirsed they’re trying to shift blame to Clinton; that’s politics and I can’t even get terribly exercised over it. What I will get bent out of shape about, however, is the current administration following the prescription for non-action I’ve outlined above: hunt the scapegoats, but make no meaningful change.
Don’t throw this all on business George. This one has as much or more to do with government and how it regulates commerce as it does with throwing the greedy bastards in jail.
