Doonesbury’s comic strip for Monday (Mike’s daughter confuses the business section for the crime pages) came alive in our local StarTribune’s business section earlier this week. The four stories on one page:
WorldCom charged with fraud
Martha Stewart shares tumble, fueled by probe
Supervalu shares slide following accounting revelation
Piper Jaffray fined $300,000
And as thiseditorial details, “The tally of shame grows: Tyco, Enron, QWest, Dynegy, Adelphia, Arthur Andersen, Global Crossings, Bermuda tax shelters, Imclone, Martha Stewart, conflicted Merrill Lynch stock analysts, obscenely greedy executives gorging themselves as companies hemorrhage losses.”
It’s true, business scandals span generations, as this sidebar explains. But this article nails it, IMHO: the roles of investors, big and small, as well as the media coverage, has contributed a helluva lot to the culture that fosters the unethical business practices. “Few cared how much the CEO was paid when stock prices were rising, and anybody who questioned a company’s sales or profits was shouted down by shareholders who believed the “New Economy” had made traditional accounting rules obsolete.”
The tiny little investment club that I belong to, mostly made up of inexperienced investors like me, got caught up in the high tech frenzy like millions of others. Yes, we’d acknowledge the importance of “solid management” but twenty percent annual growth was really what we were looking for. We were fortunate that Enron disintegrated before we got around to buying it. So it’s easy to lampoon the fat cats. Not so easy to look in the mirror.