Well said James, and I agree with much of it.
Here's my only rub. (and it's a small one)
Thousands upon thousands of companies operate within the rules in regard to the hit list you've outlined every day. They do so on a regular basis, quarter after quarter. This under a system of financial complexity which is profound.
So I don't agree the problems are widespread. The problems do exist, and the people who commit fraud in the link between the regulators and business should be held accountable. The punishment for fraud should be more severe. And politicians who take unethical advantage of their position should be voted out of office.
Having said that, what I often see on the other hand, is investors have an unrealistic expectation that business should always go up, and by virtue their stock portfolio should always get wealthier. When it doesn't happen, or the opposite occurs, they look for skape-goats. Corporate CEO's are a natural person to blame. So the lawyers fly in, start digging for any nuance of impropriety in the hope of milking multimillion dollar lawsuits out of the companies involved. And they sometimes succeed, garnering a lot of press attention along the way.
Corporate leaders then get blamed for flying private jets, scooping up a bunch of options cheaply, selling their stock, or a host of other activities. Since these activities are beyond the realm of the average person, the class envy card is played and people get incensed.
Look, let's face it, people who run large companies make a lot of money. Some view this as unfair, unjust and just plain wrong. However, the alternative (government wage limits), is a far worse pill to swallow.
Even the best of corporations fail to see an industry inflection point shift and get caught with their pants down. It's a process which has been going on for hundreds of years. Capitalism itself creates this environment by continuously innovating and creating new competitors.
At the root cause of the problem when excesses happen (as appears to be the case in regard to Enron) is a system which rewards the kind of behavior it gets.
The solution which would have maximum impact is "term limits".
More government control without term limits would only exacerbates the problem, not alleviate it.
Term limits is supported by nearly 75% of the American people. It's time we got the damn thing passed and ended this life-long reward mechanism to stay in power. |
