Sweeping changes in retirement fund regulations, executive stock selling and corporate auditing and consulting are expected in the wake of the Enron collapse.
And, indeed, carefully considered and implemented changes are warranted. The checks and balances in place to insure integrity and prevent such disasters did not work this time. But, let’s keep that in perspective: this time.
For the most part, our system does work but there will always be exceptions — situations when greed outweighs all other considerations, when executives make decisions in their own best interest instead of stakeholders.
Such is the case with Enron, so it seems.
We hope that the ongoing investigations by Congress, the FBI and securities officials will see a just end. However, such a resolution does not necessarily mean that every Enron employee and investor will live happily ever after and regain what they have lost.
When Enron was flying high and there seemed to be no limit to how high its stock price might soar, any kind of government oversight was far from the minds of most investors, i.e., regulation bad, taxes bad and so on.
What happened to Enron employees, who lost millions of dollars in retirement investments, and shareholders was not fair, but part of planning and investing in the stock market — no matter the circumstances — involves risk. And it always will. The greater the opportunity for gain, the greater the risks. That’s simply part of the system, part of the game, and a fundamental part of how this economic system of ours works.
In the case of Enron, let us learn from the mistakes, punish those who deserve it, buoy those who have lost much and hope that we avoid similar situations in the future. But imposing ill-conceived and hasty regulations and setting a dangerous precedent by having the federal government bail out individual retirement funds and stock portfolios would be just as upsetting, if not more so, to our economy as the collapse of Enron has been.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info