the corporation
we've all been reading about how many major american multinational corporations have been massivley overstating earnings in order to secure large bonuses for their top executives and perform better on the stock market.
according to the washington post, 250 public companies in the united states had to restate their accounts in 2002 (in the immediate public and government uproar after enron's collapse), compared to 92 five years earlier. and since then, executives from other large firms -- including tyco international, worldcom and adelphia communications -- have been convicted of crimes.
the most recent lawbreaker, fannie mae is a corporation that buys mortages from mortgage lenders. using this system these mortgage lenders or "mortgagees" as they are called don't have to wait 30 years to collect all the money on a loan, fannie mae buys the mortgage and the original lender suddenly has more money to lend, which means that they have more money to pump into the economy. fannie mae is a behemoth and is vital to the health of the housing industry and the american economy, so much so that regulators are seriosuly afraid that if anything happens to fannie, the entire us housing market will tank. but don't count on there being any regulations being put into place to stop this from happening any time soon, if ever.
i watched a great documentary a while back called the corporation. it laid out in detail the beginnings of the corporation, how it has evolved over the years and where the concept is now.
one of the points the film makes is that corporations are ultimately only interested in making a profit. surprise, surprise. but it goes beyond that in that it gets one of these corporate drones to admit that it doesn't matter how it makes the profit. if it's illegal and/or to the detriment of the public and the possible benefits outweigh the consequences, then that is perfectly acceptable. not just acceptable, but expected.
this is why i always have to laugh, whenever i see an hmo or bank with some down-home, caring, kind of slogan. it's all such bullshit. like these companies care about anyone. all corporations should, by law have the same slogan - "our profits, above everything else".
anyway, if i were one of these corporations, all i have to do is overstate my earnings and make it look like my company was doing well to increase demand for it on the stock market, which simultaneously raises the price of it's stock. it's a win-win situation. i never have to make a dime in the real world and no one would be the wiser. and the penalties are peanuts compared to the possible profit.
so i've got 2 questions: first, just how many of our corporations are making money and how many aren't making any money at all? i bet if the justice department looked into every single corporation, the entire american economy would be in trouble.
the second question is; with junior and the gang getting busted, often, how much economic data given to us by the federal government is factual? it would be in their best interest to never be the bearer of bad news, no? and these corporations have been proven to be in cahoots with the fed, haliburton is a good example of that. you could keep the economy going based only on lies.
how much of our economy supported by lies and fraud?
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