Enron and Consequences
http://www.opinionjournal.com/weekend/hottopic/?id=110007924
This is an opinion piece heralding the justice system for prosecuting those responsible for the Enron debacle. The authors are very clear that they consider current events to be justice, as the individuals involved are punished for their actions. The implication here is that blame should fall to the individual executives, rather than the company as a whole by way of fines and other market penalties. The article in the first two paragraphs attempts to downplay the recent accounting scandals, painting them as isolated incidents.
Commentary:
Since when is billions upon billions of dollars in lost market and capital value considered a mere minor and isolated incident? These authors were obviously asleep when IBM, Xerox, Cisco, Intel, and other companies quietly re-stated their earnings in 2002 and 2003. The authors are making a fallacy of logic here known as “the fallacy of numeration.” They are looking at the actual number of companies that have been caught. The better estimate is to look at the amount of assets they controlled. The result is clear: Billions upon billions lost, pensions and savings gone, and perhaps worse of all, a breach of trust with the public and new doubts about the validity of financial data.
But of course, none of this matters to the Wall Street Journal. Rather than view new regulations as the “chickens coming home to roost”, they instead have chosen the short sided view that any new regulations are immediately bad. To call the journal editorial staff “shills” would be to heap insult on conmen and carnies everywhere.