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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: abuelita who wrote (2386)	7/17/2002 2:48:44 AM
From: stockman_scott	Respond to of 89467

Dr. Greenspan's Prescription The New York Times Editorial July 17, 2002 The Federal Reserve chairman, Alan Greenspan, memorably defined an economic moment when he declared in late 1996 that the fast-rising stock market was caught up in "irrational exuberance." He did so again yesterday when he warned Congress that the business world had been gripped by an "infectious greed" and that government must take strong steps to clean up corporate leadership. With Congress divided on how to proceed — the Senate passed a tough corporate fraud bill this week, while the House adopted a weaker one — Mr. Greenspan's words give powerful ammunition to those arguing for a hard line. Mr. Greenspan's appearances on Capitol Hill are widely seen as a barometer of the strength of the economy. He was cautiously optimistic on that score yesterday, but he had a larger point to make: If our economic system is to function as it should, corporate America and government must get serious about keeping the system honest. The American economy "depends critically on trust," Mr. Greenspan declared. Investors who lack confidence in the system will be reluctant to buy stocks. The White House has tried to fix blame for Enron, WorldCom and other scandals on a few "bad apples" in the nation's boardrooms, but Mr. Greenspan made a strong case that the problem is systemic. It is not that people are greedier, he argued, but rather that "the avenues to express greed" have "grown so enormously." At the same time, institutions that should be protecting shareholders from corporate ripoffs are failing them. To Mr. Greenspan the best form of corporate governing remains control by a strong C.E.O. But he recommended that in exchange for that power C.E.O.'s bear a heavy burden of accurately reporting on the condition of their companies to shareholders and potential investors. In the sharply partisan world of Washington, Mr. Greenspan is widely respected on both sides of the aisle. With the markets continuing to tumble — the Dow fell 166 points more yesterday — Congress should follow his prescription: Get tough on corporate malfeasance. As the Senate and House work to reconcile their corporate fraud bills, they should favor the Senate's tougher version. President Bush should, too — and he should take pointers from Mr. Greenspan on how to craft a speech that explains why all Americans have a vital stake in seeing the system fixed. nytimes.com _______________________________ Thanks Rose...Hope you have a good evening too...=)