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Archived Articles
Corporate Crisis
2002
Back to Current Articles | 2002 There Is No Invisible Hand (December 20, 2002)
Economist Joseph Stiglitz lauds this year’s Nobel laureates in economics for demonstrating what comes as no big shock to ordinary observers of market behavior: people don’t behave rationally. In fact, he argues, the bubble economy in the US was based on “exploiting investor psychology.” (Guardian)How the Bubble Economy Burst (November 13, 2002)
When the seemingly unsinkable US economy was hit by the plummeting stock market and a series of corporate scandals, many people wondered why safeguards didn’t prevent the excesses or warn of the dangers. This article explains that the entire country got caught up in the “euphoria” of quick riches. (Washington Post)Hope (November 13, 2002)
Once hailed as “the end of history,” capitalism has reached a point of crisis, marked by corporate scandals and growing concern about its environmental unsustainability. Rene Passat argues for “radical reformism,” recognizing that capital should not be an end in itself, but rather a means to social development. (ATTAC)Account Chief's Past Stirs Up SEC Row (November 1, 2002)
When US Securities and Exchange Commission (SEC) chairman Harvey Pitt appointed former FBI chief William Webster to chair the SEC accounting oversight board, he concealed the fact that Webster sat on the audit committee of a company facing fraud charges. The scandal has prompted new calls for Pitt to step down as chairman. (Guardian)Unity Platform on Corporate Accountability (October 29, 2002)
Over 200 global justice groups issued a statement on the need for stronger corporate accountability regulations and present a 10-point platform for action. These groups believe that the corporate scandals “provide a political moment to rethink and remake the role of the ‘corporation’ and of ‘democracy.’” (CorpWatch)In Broad Daylight (September 27, 2002)
Paul Krugman argues that the United States’ “national faith in free markets” led US citizens to ignore the government’s attempted cover-up of the California energy crisis. (New York Times)A Pathological Mutation in Capitalism (September 9, 2002)
Corporate ownership by a diffuse group of stockholders weakens responsibility and accountability at top levels. This system allows managers to think first and foremost of personal profit rather than long-run sustainability. (International Herald Tribune)Bubble Capitalism (August 19, 2002)
“Reversing the nation's deformed priorities will be a hard struggle but has renewed promise now that the [conservative] stock market bubble … has been demolished.” The Nation presents three dimensions of new thinking on endemic economic woes.10 Lessons From the Corporate Collapse (August 16, 2002)
This article presents 10 fundamental assertions for beginners. It argues that there is no “new economy” and stresses the need for transparency and both domestic and global regulation. (In These Times)NASD Suspends 2 Executives of First Boston (August 16, 2002)
Securities industry regulators will fine and suspend two senior executives of Credit Suisse First Boston who directed the firm's collection of millions of dollars in inflated commissions. (New York Times)Enron, WorldCom, Vivendi-Universal and Others - or the Crisis of New Capitalism (August 14, 2002)
Recent corporate scandals show the need of market reform and prove the failure of self-regulating market theories. Instead, stock market capitalism leads to short-term financial norms and breakdowns, paid by the employees and the general public. (ATTAC)Game Over (August 9, 2002)
The “new economy” attracted young tech workers with stock options and flexible work. These “great jobs” have now vanished and the technology industry offers as much job security as low-end service work. (American Prospect)Is This America’s Top Corporate Crime Fighter? (August 5, 2002)
William Lerach, “the plaintiffs' lawyer reviled and feared by corporate executives,” demonstrates “how a lawsuit's leverage can alter important points in a corporation's rules and standards,” reports The Nation. “Together with shareholder activists, labor's working capital, environmentalists and others, litigators can help make long-neglected questions of corporate power visible again, a necessary predicate for new politics.”Senator Says Merrill Lynch Helped Enron ‘Cook Books’ (July 30, 2002)
Merrill Lynch, one of the nation’s largest and most respected brokerage firms, has been accused of compromising its business practices to win more investment-banking fees from Enron. (New York Times)Is There Hope for a New Ideology? (July 30, 2002)
A study of the 70 largest corporations in the U.S. over a 20-year period found that corporate crime was more the rule than the exception. Ninety percent of the corporations studied were habitual offenders of laws regulating advertising, labor, trade, patents, copyrights and more, reports the Miami Herald.Citigroup, Heal Thyself (July 24, 2002)
According to Ralph Nader, many of the current financial scandals can be blamed on “Congress' decision in 1999 to allow banks, insurance companies and securities firms to merge and form giant financial conglomerates such as Citigroup,” which misrepresented transactions with Enron. (Essential.org)Stock Slump Deflates US Bubble Economy (July 24, 2002)
The first installment of a three-part series about the effects of the US stock market slump on the rest of the world argues that fraudulent accounting practices at US companies have been responsible for the loss of confidence in US stock markets and an exodus of funds from the US. (Daily Yomiuri)Can Liberals Save Capitalism (Again)? (July 23, 2002)
Robert Kuttner claims yesterday’s conservative clichés are today’s political embarrassments. The US public is receiving a vivid if painful education about the limits of the marketplace and the salutary role of government. (American Prospect)An Economist’s View of the Stock Market (July 22, 2002)
Today, as the stock market plunges to new depths, it is widely believed that the accounting and other corporate scandals have caused the market to crash. But it has its backwards: it is the bubble that caused the accounting abuses. (Z Net)Capitalist Crisis and Corporate Crime (July 22, 2002)
The deepening structural crisis of the economy, combined with the crisis of legitimacy of neoliberal capitalism, promises a volatile future, argues Focus on the Global South.The Cost of Global Crony Capitalism (July 21, 2002)
New York Times editorialist David E. Sanger argues that the diplomatic cost of the capitalist crisis may be overlooked; corporate scandals could affect America’s “soft power.”Corporate Socialism (July 18, 2002)
“Corporate socialism”—the privatization of profit and the socialization of risks and misconduct—is displacing capitalist canons,” argues Ralph Nader. “Civic and political movements must call for a decent separation of corporation and state.” (Washington Post)The Cycles of Financial Scandal (July 17, 2002)
Corporate scandals, the fall of the stock markets, the sudden mobilizations in Washington of the last few weeks to legislate against some of the more egregious corporate abuses: they all indicate that the nation's attitude toward business is changing. Even so, correction is difficult, in part because the big wealth momentum booms leave behind a “triple corruption: financial, political and philosophic. “ (New York Times)Bush: Corporate Confidence Man (July 10, 2002)
Corpwatch points out serious omissions in President Bush’s Corporate Responsibility Plan: no requirement that stock options be recorded as expenses, no support for corporate whistleblower protections, no caps on CEO pay, and no mention of offshore tax havens or human rights abuses.Cracking Down on Corporate Crime, Really (July 4, 2002)
Russell Mokhiber and Robert Weissman suggest three measures to significantly reduce the toll of corporate crime and violence. (Common Dreams)Economic Reality Fights Back (July 4, 2002)
Almost every day, the US public learns of yet another greedy US corporate chief who conspired with accountants, lawyers and investment bankers to defraud the investing public. Jeffrey Sachs urges the public to be more aware of the erratic nature of today’s financial markets beyond the scandals. (Financial Gazette)Could Capitalists Actually Bring Down Capitalism? (June 30, 2002)
The recent corporate scandals have repeatedly featured executives betraying the investors for their own personal interest. Could the short-term, self-rewarding mentality of a handful of capitalists truly destroy capitalism? Not very likely, says the New York Times hopefully. The system has a "built-in corrective factor," which kicks in when abuses go too far.America Faces a Capitalism Crisis (June 9, 2002)
While corporate executives and main shareholders treat the company like their personal banks, ordinary investors have been lied to, cheated and treated shabbily. The crisis of trust in the US is in danger of leading directly to a crisis of US capitalism. (Scotland on Sunday)New Report Lists the Most Enron-like Companies (April 10, 2002)
In a new report, United for a Fair Economy reveals that Enron’s business practices are widespread. The report details 10 legal but pernicious corporate habits and lists the companies that best exemplify Enron’s harmful behavior in each area.Enron, the FCPA and the OECD Convention (April 9, 2002)
The Enron scandal exposed the close ties between multi-national corporations, politicians and those meant to ensure corporate accountability. This report examines the implications of Enron for anti-bribery legislation, including the US Foreign Corrupt Practices Act. (Public Services International)Enron's Case Spawns Reform Proposals for Boards (March 8, 2002)
Enron's collapse has given new life to the debate over the responsibilities and conduct of corporate boards, as well as the ability of government regulators and the courts to enforce the rules and punish misconduct. Investor groups are calling for a fresh look at corporate and board compensation plans. (Washington Post)
