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Mrs. Tutwiler? Have You Seen that $3.8 Billion We Had Just The Other Day?

I looked under the couch......maybe the night auditors?

This is Dark Cloud on Wednesday, June 26, 2002.

It’s kind of hard to get your mouth around words like ‘three point eight billion dollars’ but that’s the amount of error which WorldCom says it found after a brief review of its books, having already fired its financial officer. I can only hope they were joking, because - say it with me - three point eight billion should probably have caught the attention of a lot of folks within that company, and it is highly unlikely only a few people would have known about this. Nobody is doing so well - not General Electric, not Microsoft - that three point eight billion dollars wouldn’t smudge a few department balance sheets somewhere.

Even if only misplaced on the corporate ledgers.

I can imagine that three point eight billion dollars would even give, oh, The Pentagon pause. How in the world of accounting could such a ridiculous amount of money fall off the books? How could such an amount never appear on the books? How could an error of that amount occur without blaring sirens from attorneys and accountants whose job it is to catch it? How could it all appear as one, single, procedural error that was not caught? I don’t believe it was unnoticed; surely, there was a concentrated effort to rob both the Feds of taxes, the stockholders of dividends, and creditors of repayment. And likely, it was an attempt of simple fraud by the officers and Board of the Corporation.

Republicans and Democrats are pointing fingers as loosely and inappropriately as the CEO’s and CFO’s are because Wall Street is revealed, yet again, as being a group of posturing, hypocritical thieves of the first water. The fact is, nobody, including you and I, care very much about any of this as long as we’re getting steadily increasing stock dividends. But now we’re not, and suddenly we are shocked – shocked! – that such shenanigans have been going on. Or rather, that our guys couldn’t keep the shell game going at the expense of the other guys. And now, justice must be served, along with a side dish of vengeance.

It is the average stockholder that enables this sort of thing. They push for quick money, when the stock market only makes sense as a long term investment IF all is on the level. Stocks are not commodities like beef or wheat that have wildly different pressures on them. When stocks became treated as quick profit items, this was what led to these sorts of fiascos. It is true that the average stockholder does not have the financial impetus or potential rewards that the big wheel manipulators have, but it is their childish game playing in high finance that enables all of this. They rarely read their stock reports, and most couldn’t configure it if they did. They want to be big fish themselves, and so play along with the big boys with touching sympathy and belief in their creed. Really, if anyone were reading the mandated reports with an eye out, this could never have happened.

Greed, as it turns out, is not good. It motivates, yes, but it forces the sacrificing of long-term stability for short-term profit, which can evaporate like Colorado forests in fire season. This is not to say that the CEO’s, who are responsible for all this, ought not to spend the rest of their lives in debt and paying everyone back from a jail cell, but that it is hypocritical of us to pretend there are, actually, many innocent stockholders.