Enron. Dynergy. Xerox. World Crossing. WorldCom. Adelphia Communications. Tyco Corp.
These companies have all been accused of corporate malfeasance (correctly, it is probable). They are presented as proof that America's "corporate culture" is rotten to the core, and that our very survival as a democracy is at stake.
I respectfully disagree.
The above companies (seven in all) represent a minuscule fraction of our economy; even when they appeared to be healthy, they were a sliver of our country's GDP. The fact that the executives of Enron are under investigation, the Rigas family (owners of Adelphia) may be indicted, and Tyco's Dennis Kozlowski is likely headed to jail proves that the system works.
One of the reasons our economy is stronger than those of Europe (or Japan) is the hands-off approach the government takes towards business. Sometimes, this results in situations such as what we are currently seeing—a culling of the herd, as the weakest companies are removed from the field. While it usually occurs at a most inopportune time, the fact is that these companies *were* providing jobs for their employees, and in most cases, providing some product or service for which there was a market (they would not have grown to their immense size without a market). But with the micromanagement common to most other democracies, it is likly that these companies would not have existed at all, and the jobs and goods they provided would not have been created. (Global Crossing went under after laying a backbone for trans-oceanic telecom connectivity, for example).
While what occurred with the accounting procedures of these companies was wrong, it doesn't necessarily indicate the entire system is corrupt, only that a few high-profile criminals temporarily did well. They were hoist by their own petard, eventually.
posted on July 09, 2002 08:09 PM
Comments:
It seems to me that the market has taken care of this problem. These companies are now selling for pennies on the dollar. (Or maybe they were only worth pennies before the financial shenanigans.)
posted on July 09, 2002 08:09 PM
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