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Politics : Sharks in the Septic Tank -- Ignore unavailable to you. Want to Upgrade?

To: epicure who wrote (52787)	7/10/2002 9:35:29 AM
From: Lane3	Read Replies (2) \| Respond to of 82486

washingtonpost.com Capitalism and Conscience Wednesday, July 10, 2002; Page A16 THE CENTRAL conceit of President Bush's Wall Street speech yesterday was that the run of corporate scandals is primarily a moral issue. "There's no capitalism without conscience; there is no wealth without character," Mr. Bush lectured. "We need men and women of character, who know the difference between ambition and destructive greed." There is no harm in this rhetoric, but it is naive to suppose that business can be regulated by some kind of national honor code. The United States, however much Mr. Bush may deplore it, is a land of moral relativism, leading the political scientist Alan Wolfe of Boston College to conclude that the Ten Commandments have become the Ten Suggestions, and that Americans have added an 11th to the old list: Thou shalt be tolerant. In a nation as dynamic and diverse as this one, it is hard to define a moral consensus, let alone enforce one. And this is especially true in business. When an American firm raises capital from Japanese pension funds and Belgian dentists, when it operates subsidiaries in China and Chile, when it employs people of all faiths and cultures, and when it competes globally, it will be hard-pressed to reflect "the values of our country," as Mr. Bush proposed. There is one objective that companies can unite around, and that is to make money. This is not a criticism: The basis of our market system is that, by maximizing profits, firms also maximize the collective good. There are some boundaries that should not be crossed in the pursuit of revenue, but these are defined by law, not personal morality. Ethicists have little to say about what constitutes monopolistic behavior or whether off-balance-sheet partnerships should be consolidated. This is what lawyers do. The real test of Mr. Bush's speech, therefore, is what he said about changing the rules that drive business behavior. And what he said was limited. He focused mainly on tougher penalties for white-collar criminals plus extra resources to pursue them. But he offered less on both scores than reformers in the Senate. Mr. Bush proposed doubling the penalty for mail and wire fraud; Republicans and Democrats on the Senate Judiciary Committee have voted unanimously to create a new crime of securities fraud. Mr. Bush proposed increasing the budget of the Securities and Exchange Commission by $100 million. But the Senate reformers -- again, coming from both parties -- want three times that increase, so that the SEC can expand its enforcement division and bring salaries up to parity with other financial regulators at the Federal Reserve and Treasury. In other areas, the president's proposals were still weaker. He exhorted shareholders to do a better job of overseeing companies but said nothing about lowering the legal barriers to shareholders who seek to make their voices heard. He asked company boards to do a better job of overseeing managers but did not endorse protections for whistleblowers who might give board members information. He offered one vague reference to auditors' conflicts of interests but said nothing substantial. He said virtually nothing about the need for a new audit oversight board. Mr. Bush's advisers have read the polls, which show much greater enthusiasm for holding bigwigs accountable than for obscure audit overhaul. They remain reluctant to back the tough reforms that are inevitably unpopular with the accounting lobby. Despite Mr. Bush's exhortation yesterday to clean up corporate America, the administration has put out a statement critical of the best vehicle for achieving this objective, which is the Senate's reform package. The administration needs to close this gap between rhetoric and policy. © 2002 The Washington Post Company