Obama Stimulus Numbers: The Return of Enron-Style Accounting

Posted: Nov 19, 2009 11:12 AM
Mike Flynn with Big Government makes a great analogy posing essentially this question today:  If corporate executives are responsible for the financial numbers they release, why shouldn't the Obama administration be held accountable for the numbers on Recovery.gov?

Flynn writes:

The Sarbanes-Oxley Law was rushed through Congress in the wake of an enormous corporate accounting scandal that shook Wall Street and investors across the country. CEO’s and officers at several large companies were found to have “cooked the books”; i.e. knowingly falsified earnings statements to maintain stock prices or propel them higher. The practice came to be known as, Enron-Style Accounting....

....Yes, with the number of records pouring into Recovery.gov there are certain to be some problems. And, not every human being knows their Congressional District and may not know how to accurately estimate jobs “saved,” since there actually is no way to do so.

Still, remember, a couple weeks ago Administration officials used this very same data to take to the nation’s airwaves and proclaim success for their initiative. They reviewed this data and said that over 600,000 jobs had definitely been “saved or created.” That so many problems with the data have been exposed so quickly underscores how irresponsible the Administration’s press blitz was. Even if they were confident Big Media would never hold them accountable for running ahead of the data, the general public does remember these things.

The government requires corporate officers to be personally accountable for all financial  information released to the public. Having tens of thousand of employees making hundreds of thousands of separate reports doesn’t absolve them of final responsibility on the numbers. Neither does a need to get out in front of some impending bad news.

A few years ago, politicians passed a law to hold accountable corporate officers who mislead the public. If only politicians were held to the same standards they wrote.

Great point.