Hear this, you that trample on the poor and take from them their jobs and retirement funds. You say, When will the Sabbath be over so we can make the measure small and the payment great, and practice deceit with false accounting?'. Therefore, you who afflict the righteous, who take a bribe, who push aside the needy: You have built huge estates of hewn stone, but you shall not live in them. You have your stock options, but you shall not cash them in. For I know how many are your transgressions, and how great are your sinsyou who afflict the righteous, who take a bribe, and push aside the needy in the gate."
No, Amos didn't quite say that, but if he were in America today, he probably would. The Hebrew prophet's condemnation of the corrupt wealth of his era (with only a few small word changes) applies quite dramatically to our current situation. Amos lived in a time not unlike our ownone of great prosperity, but prosperity built upon corruption and oppression, leading to a great and growing inequality. (Check out Amos chapters 5 and 8.)
Every day now the news brings reports of more and more corporations revealed to have been "cooking" their booksusing accounting tricks to mask expenses, hide losses, and inflate profits. When the truth is revealed and investigators finally step in, thousands of people are left jobless, or without their retirement funds, while top executives walk away with millions.
The recent list includes: Adelphia Communications, the 6th largest cable provider in the country, which filed for bankruptcy in June after having inflated its revenue and earning statements, with $3 billion in off-the-books personal borrowing by the founding family.
Xerox, which was fined $10 million to settle fraud charges by the SEC in April after having improperly recorded $6.4 billion in revenue.
WorldCom, where the story continues to unravel, faces bankruptcy and fraud charges after "hiding" nearly $4 billion in expenses. Employees of WorldCom who own shares of the company in their retirement plans have collectively lost at least $1.1 billion during the past three years. So far, 20,000 people have been laid off.
And, of course, there's the continuing saga of Enron.
NOW QUESTIONS ARE arising about some of George W. Bush's activities as a director of Harken Energyalleged insider trading and low-interest loans are being scrutinized. And a lawsuit has been filed against Vice President Cheney alleging fraudulent accounting practices when he was CEO of Halliburton.
It's been reported that, in 2001 alone, 270 corporations "restated" the numbers in their financial statements. From 1997 to 2001, a total of 1,089 companies have apparently done so. All told, these transactions have cost investors hundreds of millions of dollars.
Americans have a love-hate relationship with both government and business. The climate seems to shift like a pendulum between eras of an "anything goes" mentality and periods of stricter government regulation. The excesses of the 1920s, leading to the Great Depression, were followed by the reforms of Franklin Roosevelt, including the creation of the Securities and Exchange Commission and tighter regulations.
Beginning with the Reagan administration and culminating in the Gingrich "revolution" of 1994, many of these regulations were relaxed. At the urging of their biggest corporate contributors, Congress passed legislation shielding accounting and law firms from liability for false reporting and made shareholder suits more difficult. The trend has continued through the Bush administration's close relationship with the corporate worldin relaxing environmental regulations on clean air and water, diminishing worker protections, and appointing a new fraternity of former corporate executives to oversee the businesses and industries they used to run.
And it increasingly appears that the economic "boom" of the 1990s may have been a house of cards built on fraud. The pied piper of the bull market and the illusive dream of endless profits put the economy and the culture into an addictive state of financial irresponsibility.
The latest Gallup poll on public attitudes showed a sharp increase in people who view big business as a greater threat to the nation than big labor or big government. When asked which they view as "the biggest threat to the country in the futurebig business, big labor, or big government," 38 percent named big business, up sharply from 22 percent when the question was last asked in October 2000, and the highest it has been since the question was first asked in 1965. A greater percentage of Americans, 47 percent, still views big government as a larger threat. But the percentage of the population believing government to be the worst threat is now the lowest since 1981, and down significantly from 65 percent in October 2000.
THE PRESIDENT'S SPEECH on July 9 was delivered with a high moral tone: "There's no capitalism without conscience. There is no wealth without character." But Bush had very little to offer in the way of concrete solutions. The president's words were strong, but his proposals lacked the power of clear specificity or real reform. Contrary to reformer Theodore Roosevelt, George Bush speaks loudly but carries a small stick when it comes to the behavior of large corporations. As in many things, the president's rhetoric evidences fine speechwriters, but his proposals demonstrate cautious policy advisers.
The president says the problem is a few bad apples. He fails to see that a tree whose growth is all at the top, with bare branches at the bottom, is in real danger of falling over. And at a deeper level, Bush doesn't seem to grasp that the tree of the American economy is rooted in the toxic soil of unbridled materialism, a culture that extols greed, a false standard of values that puts short-term profits over societal health, and a distorted calculus that measures human worth by personal income instead of character, integrity, and generosity. Unhealthy roots and soil tend to produce stunted growth and bad fruit.
And can we really expect the administration to clean up the mess when its own house may be dirty, or at least tainted?
The day after the Bush speech, the Senate passed unanimously a series of accounting and corporate regulatory measures considerably tougher than what the president had suggested. They included, by a 97-to-0 vote, a new chapter in the criminal code that makes any "scheme or artifice" to defraud stockholders a criminal offense. "If you steal a $500 television set, you can go to jail. Apparently if you steal $500 million from your corporation and your pension holders and everyone else, then nothing happens. This makes sure something will happen," said Sen. Patrick Leahy.
Amen to that. Corporate CEOs, no less than everyone else, have a responsibility to the common good, not just to the bottom line. The entrepreneurial spirit and social innovation fostered by a market economy has benefited many, and should not be overly encumbered by stifling regulations. But left to its own devices and human weakness (okay, let's call it sin), the market will too often disintegrate into greed and corruption, as each day's news reports now painfully reveal. Capitalism needs rules, or it easily becomes destructive. A healthy balancing relationship between "free enterprise" and public accountability and regulation is morally and practically essential, as many are now coming to see.
Sen. Leahy is right: Let's call theft theft. And when there is theft, let us hope that "something happens"for as folksinger Woody Guthrie reminded us a long time ago: "Some will rob you with a six gun, and some with a fountain pen."
Jim Wallis is editor-in-chief of Sojourners.