``..And the Asians and Russians weren't alone. Even the Finns and the Germans were lectured on the superiority of U.S. corporate culture, based on transparency and accountability. All companies were supposed to restructure along the lines of Enron, WorldCom and Xerox. Indeed, these were among the very corporations held up as exemplary...
...Now we learn to our surprise that U.S. corporations, freed from `unnecessary' government regulation, have not increased production as advertised. Instead, they set out to rip off consumers and small investors. The world's No. 1 free-market economy gave rise to such an orgy of cooked books and falsified audits that even Gosplan veterans could only step back in wonder...'' [Kagarlitsky, fwd Chris D]
``One rather worrisome side-effect of all the corporate scandals is that people are concluding that profits are all an accounting artifact. They're not. A few companies have committed massive fraud, and most massage their numbers - but big capital is still very profitable, and it's not all a scam. Well it is in the sense that capitalism is organized crime, as the t-shirt says, but within the context of the system, surplus value is still extracted in huge quantities.'' Doug
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While I obviously agree with both of the above, there is more, a lot more yet to expose and lay bare. For example, the fraud as Doug says is not just that much of the New Economy (privatized energy utilities, and telecommunications) were not profitable enough to stand up on their own. The fraud is in their re-design as privatized schemes that produced no product in the first place. Many of these companies were simply legally de-regulated artifacts, in a much more artificial sense than the more usual corporation which theoretically is supposed to manage the production and delivery of tangible goods. Those companies that did manage to be profitable without creative bookkeeping are still frauds. The fraud is in the legal pretense that such organizations produce something of economic value when in fact nothing is produced, but is charged for anyway.
And yet it still seems too early to write I told you so. Not because it isn't so, since it was so even before all this trumped up nonsense was rolled out as the New Economy. But because I don't think a significant number of the US population let alone policy makers understand that the fraud wasn't that neoliberal corporate culture lied about its profits, but that it bilked the once public commons of energy utilities, telecommunications, transportation (airlines, railroads) not to mention information, health care, and education. That most of these were not as profitable as was expected is hardly the fraud. Hell most of these economic activities were regulated and originally made into quasi-public systems because they were not easily converted into products in the first place. What's the big surprise? That the make believe didn't work?
At any rate, some where in the next year or so, the whole conceptual system (neoliberal free market fundamentalism reigning over every socio-economic activity of life) has to trace a lot more figure eights like some dazed wagon train in the desert. In other words, there will be no relief, until there is a significant rise in understanding that this entire orientation is a mistake and doesn't work. Capitalism unchained is not a positively extensible, adaptable, and creative system. Given sufficient freedom of action, it simply devolves into blatant criminal activity.
Nobody (public official) is calling for re-structuring entire sectors of the economy through re-regulation of public utilities, telecommunications, mass transportation under government controlled monopolies with strict price controls, unionized labor, and government supported infrastructure. And I don't hear much of connection being drawn between these current scandals and frauds and the IMF, WB, and WTO, which propose exactly the same sort of New Economy fundamentalism as the solution to development that has wrecked such havoc and chaos in the US. And furthermore, nobody is examining and then connecting the less spectacular but intimately related frauds and failures in the privatization schemes in mass transportation (airlines and railroads), education, healthcare and information (IP).
\end of usual rant
Chuck Grimes