The call in Congress and the media is for swatting corporate
executives on their plush behinds. Ouch, ouch! they are supposed to yell.
The underlying notion -- not to be confused with anything so
respectable as an idea -- is that the superior moral wisdom of our elected
leaders will prevent future Enrons, WorldComs, Arthur Andersens and so on.
Various regulatory and supervisory schemes are on the table, few of which
will likely come to much. That's a very good thing, by the way. Here's why.
The tone, and especially the source, of the censorious comments
directed at Wall Street remind us forcibly what this controversy is in large
measure about. It is about politics just as much as it is about honest
indignation. The Democrats, if they could, would hang these various scandals
around the Republican Party's collective neck.
What other reason is there, just for example, to poke the ashes
of a supposed "insider" stock sale controversy involving George W. Bush a
dozen years ago? The political prosecution's transparent motive is to kindle
suspicions about Bush -- never mind that the Securities and Exchange
Commission, inquiring into the transaction at the time, found no reason to
pursue the matter, far less to prosecute.
The true target, nonetheless, is "the wealthy" -- the overfed,
overpampered class whose taxes Republicans are always trying to cut but who
themselves lack compassion for employees and who hire fancy accountants to
cover up their misdeeds -- unless maybe they live in Hollywood and write
nice checks to Democrats.
By any reasonable gauge, what the foregoing types deserve --
when they truly meet the job specs -- is stern punishment as prescribed by
law. The matter becomes hilarious only when politicians offer to substitute
their own collective moral standards for Ken Lay's or Bernie Ebbers'. Maybe
even for Martha Stewart's! What should make us, in other words, ascribe to
men and women hustling our votes more moral stature than we accord those
A political campaign to make sure that the laws (duly passed by
the political class) work and that justice triumphs -- wonderful. We could
all go along with that. It's political overkill we have to beware.
Politicians are born over-killers. Take the Senate Banking Committee, which
last month overwhelmingly OK'd a measure -- the Public Accounting Reform and
Investor Protection Act -- that presumes to tell the accounting industry how
to do its job and what standards to apply. This, before the Arthur Andersen
scandal has been sorted out and the villains of the piece identified and
punished. How did the committee acquire such wisdom? A good guess is that
members squinted at the calendar and saw the election looming.
The banking committee wants ostensibly to prevent wrongdoing.
But unnecessary regulation is wrongdoing -- almost a species of theft.
Through wrong or stupid regulations, you can shackle business' ability to
innovate and create jobs, thereby stealing profits and opportunities.
What the political class and their Ya-Ya brothers and sisters of
the media generally forget is that the marketplace and democratic politics
are alike self-regulating. Nothing guarantees the election of honest and
sensible public officials, nothing but the inner compasses of the voters.
So how come our politicians think themselves so much holier than
corporate and accounting executives? How do they ward off supervision for
themselves, reserving it for others? It's simple. The political class wields
the legal power. It passes the laws, writes the budgets, confirms the
appointments. It can tell others exactly what they must do. Business can't
do anything remotely comparable.
A "reforming" politician can be a figure to excite terror in the
stoutest hearts. And not because he has no notion what he is doing. He knows
too well what he is up to. He is trying to get himself elected -- just like
now, in Washington, D.C., where, before the diagnosis has been pronounced,
the doctors are readying their saws and potions.