Americas finest in free-fall
cut and paste man | 09.06.2002 23:01
once thye were hero, turbo-capatilist pioneers, now they face felony trials
fron the liberal newspaper,The Observer
good analysis, wrong conclusions?
US capitalism in the dock
We can learn from America's greed
Leader
Sunday June 9, 2002
The Observer
Just two years ago, Enron's Ken Lay, WorldCom's Bernie Ebbers and Tyco's Dennis Kozlowski, three of the most influential businessmen in the world, were lionised as epitomising all that was best in American capitalism. They were, we were told, dealmakers and innovators standing in stark contrast to European chief executives presiding over staid companies languishing in over-regulated, over-taxed and underperforming economies. If only Europe could adopt Wall Street's stock markets, incentives and financial freedoms, ran the argument, Europe, too, could share the benefits of American-style capitalism.
For much of the last decade, the American economy has been uncritically admired as a standard-bearer of enterprise, dynamism and innovation. And the means to that end - extravagantly paid executives consecrating all to the maximisation of profits - have been seen as a necessary price to be paid for growth and productivity. Now America is learning the hard way the importance of more prosaic virtues such as integrity and patient investment. The scale of the fall from grace of America's corporate leaders is stunning. Each one has been exposed for exploiting a lack of regulation to manipulate their balance sheets, profit and loss accounts and tax liabilities.
Last week, in the latest scandal, Kozlowski was charged with personally evading tax. Tyco is now investigating to see if the impropriety encompassed the affairs of the company. Enron and WorldCom have been laid equally low. Meanwhile, investment banks Merrill Lynch and CSFB have each been fined $100 million for bad practice. Enron's accountants, Andersen, have collapsed.
The fantastic scale of such personal greed, fraud and impropriety not only casts a long shadow over the glib argument that American free market capitalism is a model for the world. It is also seriously undermining hopes for a US economic recovery. Wall Street touched an eight-month low on Friday as investors become ever more wary of the credibility of many American companies' stated profits.
The Augean stables need to be cleaned urgently, with new standards of accounting and corporate behaviour policed by tough regulation. Equally, Britain and Europe must be more cautious in future about simply imitating what we can now see is some of the worst of unregulated capitalism, rather than some of the best.
fron the liberal newspaper,The Observer
good analysis, wrong conclusions?
US capitalism in the dock
We can learn from America's greed
Leader
Sunday June 9, 2002
The Observer
Just two years ago, Enron's Ken Lay, WorldCom's Bernie Ebbers and Tyco's Dennis Kozlowski, three of the most influential businessmen in the world, were lionised as epitomising all that was best in American capitalism. They were, we were told, dealmakers and innovators standing in stark contrast to European chief executives presiding over staid companies languishing in over-regulated, over-taxed and underperforming economies. If only Europe could adopt Wall Street's stock markets, incentives and financial freedoms, ran the argument, Europe, too, could share the benefits of American-style capitalism.
For much of the last decade, the American economy has been uncritically admired as a standard-bearer of enterprise, dynamism and innovation. And the means to that end - extravagantly paid executives consecrating all to the maximisation of profits - have been seen as a necessary price to be paid for growth and productivity. Now America is learning the hard way the importance of more prosaic virtues such as integrity and patient investment. The scale of the fall from grace of America's corporate leaders is stunning. Each one has been exposed for exploiting a lack of regulation to manipulate their balance sheets, profit and loss accounts and tax liabilities.
Last week, in the latest scandal, Kozlowski was charged with personally evading tax. Tyco is now investigating to see if the impropriety encompassed the affairs of the company. Enron and WorldCom have been laid equally low. Meanwhile, investment banks Merrill Lynch and CSFB have each been fined $100 million for bad practice. Enron's accountants, Andersen, have collapsed.
The fantastic scale of such personal greed, fraud and impropriety not only casts a long shadow over the glib argument that American free market capitalism is a model for the world. It is also seriously undermining hopes for a US economic recovery. Wall Street touched an eight-month low on Friday as investors become ever more wary of the credibility of many American companies' stated profits.
The Augean stables need to be cleaned urgently, with new standards of accounting and corporate behaviour policed by tough regulation. Equally, Britain and Europe must be more cautious in future about simply imitating what we can now see is some of the worst of unregulated capitalism, rather than some of the best.
cut and paste man