OVERSIGHT OR OVERLOOKED? :

In Oversight We Trust (THOMAS L. FRIEDMAN, July 28, 2002, NY Times)

I don't blame President Bush for any accounting fraud at WorldCom or Enron. I blame him for something more important. You see, what really distinguishes American capitalism from most other countries' is not that we don't have C.E.O. crooks, but others do, or that we never have bogus accounting, bribery, corruption or other greedy excesses, but others do. No, we have all the same excesses that other capitalist nations have, because fear and greed are built into capitalism.

What distinguishes America is our system's ability to consistently expose, punish, regulate and ultimately reform those excesses - better than any other. How often do you hear about such problems being exposed in Mexico or Argentina, Russia or China? They may have all the hardware of capitalism, but they don't have all the software - namely, an uncorrupted bureaucracy to manage the regulatory agencies, licensing offices, property laws and commercial courts.

Indeed, what foreigners envy us most for is precisely the city Mr. Bush loves to bash: Washington. That is, they envy us for our alphabet soup of regulatory agencies: the S.E.C., the Federal Reserve, the F.A.A., the F.D.A., the F.B.I., the E.P.A., the I.R.S., the I.N.S. [...]

[C]ount me among those naïve fools with a fundamental belief in the federal government - not because I have no faith in ordinary Americans, but because I have no trust in ordinary Big Oil, ordinary Enron or ordinary Harken Energy to do the right thing without proper oversight.

While the folks at Enron, Worldcom, etc. systematically cooked their books, defrauded investors and raked in millions, our bureaucracies gave them all clean bills of health. Then the functioning of the free market caught up to and gutted these companies, reducing them to penny stocks. The situation got so bad that even bureaucrats could figure out something had gone wrong.
Posted by Orrin Judd at July 28, 2002 8:49 AM