by John Hawkins | June 28, 2002 10:59 am
The Market Is Self-Correcting: The latest corporate accounting scandals at Xerox and WorldCom have exacerbated the injury caused to the public’s economic confidence by Global Crossing and Enron. There are a few angles on this issue that need to be addressed…
– Democrats are acting concerned about the people who lost their jobs and stock options because of corporate shenanigans. I wish they’d get just as concerned about the people who lost their jobs because the Democrats have taxed and regulated the businesses they work for into oblivion.
– These accounting scandals have caused a slide in the value of the dollar compared to other currencies. That’s actually not a big deal as long as it doesn’t go into an Argentina style free-fall (which it’s not going to do). In fact, some people have argued for years that we should DELIBERATELY lower the value of the dollar in order to make our exports overseas cheaper among other things…
– The government easily wastes and loses 10 times as much of OUR money every single year as these corporations have misappropriated. If you don’t believe that, just ask yourself why there’s no money in the Social Security “trust fund“.
– Capitalism and the market tend to be self-correcting. These corporations managed to cheat the system for a little while and then it caught up with them and they paid the price. Now because these losses have shaken the market’s confidence, new accounting practices will go into effect in order to counter that. After a period of time, the fact that the “dead wood” has been cut out of the market and the improved and more open accounting practices will allow the market to come back bigger and better than ever.
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