From time to time, as readers know, I've tended to praise Ben Stein, a columnist for The New York
Times (among his endeavors), because he is one of those market-loving capitalists who is appalled by the absolute greed exhibited by the captains of industry. Today, he has another lament about the disgusting self-enrichment of people like Robert Nardelli and Steve Jobs:
THE current state of corporate ethics, and the governmental and public policy response to that state, are so bewildering, so upsetting, so impossible to understand except in terms of the famous phrase, “Follow the money,” that it makes my poor old head spin.
Yes, indeed. He seems quite unconvinced, for example, about the clearing of Steve Jobs of Apple by an internal company committee which found that Jobs did not know about the "back-dating" of his stock options. Just to remind everyone, back-dating is a convenient little maneuver:
That’s where you — if you’re a big wheel at a corporation — get to choose the date and price of the options after you have seen when the yearly low was and seen how much recipients could make starting the options from times earlier on the calendar than the dates when the awards were actually awarded. It’s sort of like getting to pick lottery numbers after the winning numbers are drawn — and your stockholders supply the prize money.
Besides Apple, though, there is a huge scandal brewing at dozens of companies. But, the most important passages in Stein's column are found in the section where he expresses astonishment that, in light of Enron and a myriad of other scandals, there is serious talk of WEAKENING oversight of the internal goings-on of corporate America:
And now let’s look at the Committee on Capital Markets Regulation, a k a the Paulson committee. It’s the group of academic and finance worthies that was sponsored informally by Treasury Secretary Henry M. Paulson Jr. and studied the harsh burdens under which the corporate pooh-bahs and Wall Street chieftains labored.
Recently, that group, along with many others of the hired intelligentsia of the management class, came out with their report that said that the Sarbanes-Oxley law was too strict on corporate America, and was hurting Wall Street by making companies register and do their initial public stock offerings in Europe. (Quelle horreur!)
In particular, Sarbanes-Oxley was supposedly too strict in requiring audits of internal controls. This was supposedly a painful, unnecessary burden in a world where a corporate boss’s word is his bond and the word of any corporate boss is worth more than all the bonds in Christendom. And the Sarbanes-Oxley section on internal controls was supposedly cruelly tormenting Wall Street to the detriment of the whole world of decent people.
But hold on. Isn’t backdating precisely an example of a failure of internal controls? Haven’t we just found out that internal controls are far too lax, not too strict? For the Paulson committee to say that we need less stringency in corporate audits is a bit like the War Department saying we needed less watchfulness at our naval bases after Dec. 7, 1941. It’s also a bit like Willie Sutton saying it would be good as a matter of national financial policy to have fewer guards at banks.
The amazing thing is that intelligent people are taking it seriously, this matter of rolling back corporate controls to make life even easier for misbehaving corporate wheeler-dealer types. What’s more amazing is that anyone is even thinking of rolling back corporate controls to make life richer for Wall Street.
We know this isn't so shocking. But, when you hear the shock coming from people like Stein, you know we must continue to expose and talk about the vast greed and corruption inside corporate suites. Because when people like Stein worry, you know that many elites are concerned that the behavior of the greedy are awakening the people.