Posted: Jul 17, 2002 12:00 AM
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 hustling business? 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. Ouch! indeed.