Thursday, March 12, 2009

Solution for Enron, and Future Madoff Clones

If you're like me, you probably are more than aware how Sarbanes Oxley is damaging our economy, and sapping the life out of the producers in our society. Other than the accounting sector. Sarbanes Oxley is a full-employment act for accountants.

Accountants have their fingerprints on everything. At the facility I work at, the facilities department used to charge $.25 cents to vend a tampon in the restrooms. The logic behind this was that we wanted the supplies to be available for building occupants who needed them, but we didn't want people just taking them home, so there is a nominal per-tampon charge. The janitors would go around and collect the quarters about once per month. In all, the million plus square foot facility went through about $300 worth of tampons per year, and collected about $450 in revenue. The janitors would give the quarters to the facility manager a few times per year, who would turn them in for a cashiers check and deposit it back into his operating budget. Then the accountants came and wanted a bunch of signatures and chain of custody documentation to keep people from stealing the quarters. Not worth the effort. So the decision was made to give the tampons away for free. Now the building gives away about $1200 worth of tampons per year. Go accountants! You protect the american corporation! I am 100% sure that KPMG billed more than $1200 to 'solve' this gross lack of corporate accountability.

And Sarbanes Oxley is like that all over. Everyone has more work to do because of it. The tampon example is my favorite one, but I have several examples of accountants jumping over dollars to pick up nickels, and charging by the hour to do it.

Enron was a catastrophe. What happened there was evil. It should never have happened, and should never happen again.

In the law of Moses there is a distinction for judgments against blue collar crime, and white collar crime. It's a useful distinction, and rings true to me. For blue collar crime it's an eye for an eye. If you stole your neighbors cow, you had to give his cow back. If you killed your neighbors cow, you had to give him a new cow. But white collar crime was punished much more severely. If you were a cattle rustler, an organized group that stole a hundred cows... Then you had to repay 7 times what you stole. Seven hundred cows in this case. The damages were meant to be punitive. Organized crime's penalties were mean to be much harsher because organized crime hurts the victims more. If you were a white collar criminal under the law of Moses, and were caught - you were finished. Out of business. Kaput.

That's how it should be.

What I'm about to propose will sound fascist. And it is. It may sound cruel and unusal. It is not.

I've thought long and hard about it. And I think its the right course of action. I also think you'll agree with me that if there is ever a meltdown like Enron, ever again, the entire board of directors of the offending company should be stripped of all their personal assets, taken to time square, stripped of all their clothing, tied up and their balls burned off with a blowtorch.

That is exactly what should happen to Bernie Madoff. He should be stripped of all his assets, taken to time square, stripped of all his clothing, and his balls should be burned off with a blowtorch.

And thats it. No jail time. No additional regulations on the rest of us. No Sarbanes Oxley forcing multinational corporations to track the chain of custody on a $.25 cent tampon. Just swift justice that is harsh enough that when some greedy sonofabitch decides to play fast and loose with the financial system, he (or in the case of a she we'll have to think up something equally harsh) will think twice.

If this went out for a referendum... how many people do you think would vote for it? I honestly think we could get the votes if it were decided that way.

Update - Here's a similar line of thought having to do with sex offenders. It's in the same ballpark so I'm linking to it here. Please follow the link it is so worth your time.


Andrew said...

I think the plan may find itself afoul of Amendment VIII.

I do think it's entirely appropriate to remove their corporate protection and strip them of all assets, personal and professional, and distribute them to the victims.

The blowtorch part, however gratifying it would be, probably won't work in our society. Our society is probably about to change, though, so I'll keep plenty of propane cylinders around just in case.

Big Jay said...

I'm telling you guys. I've been doing an informal poll. If this thing made it to a referendum....