Accounting scandals have harmed capitalism
I write today to heartily agree with Mike Vinson’s column, which appeared in the July 21 edition of the Southern Standard.
The recent accounting scandals we’ve seen unfold at various companies have made us all a little leery of the stock market in general. It’s sad to say but these “malefactors of great wealth” have done more harm to our free market capitalist system than any of the events of 9-11.
The punishment meted out to the guilty parties needs to be sure and swift. Trust is the cornerstone of free-market capitalism. When an individual makes a decision to invest some of their hard-earned money in a particular company, they must have the assurance that the balance sheet reflects reality and not the blue smoke and mirrors some companies recently in the news seem to have been made of.
A cautionary word is, however, in order. We need maintain faith in the overall economic system we call capitalism. It is what has made this country into the greatest economic power in history.
Congress is now getting into the act, passing new and tougher laws meant to better police corporations. I have no doubt that much of what is in the bill passed in the Senate last week will be helpful.
I would just say that more often than not, when government involves itself in trying to remedy a situation, its cure, in the long run, often turns out to be much worse than the disease.
There is talk of an independent review board being set up to oversee corporate government. Now, as bad as the accounting scandals at Enron and WorldCom have been, they pale in comparison to the bookkeeping trickery the federal government engages in on a daily basis.
Allowing the federal government to inject itself too heavily into the business sector would, in my opinion, be far greater danger to the recovery of the stock market and to our overall, long-term economic health. A government which finds itself unable to account for billions of taxpayer dollars that go unaccounted for in the Medicare program every year and which tells us that they have put our money into a non-existent Social Security trust fund for our retirement years, really needs to get its own house in order before they start managing private-sector money.
Paul W. Farley
204 S. High Street
McMinnville