June 14, 2002
Incompetence and punishment

Chicago Boy Jonathan Gewirtz quotes Robert L. Bartley in Monday’s Wall Street Journal:

When the government fails in its most basic functions -- say, protecting our citizens from foreign enemies -- no one at the FBI or CIA loses his job, we all gather around to salute the flag and Washington gives us yet another bureaucracy. But if business stumbles -- say a minor recession and the collapse of stock values many had thought inflated -- businessmen are hauled into court and the air is full of proposals for "reform."

I agree that there should be consequences when government fails, and indeed one of the many reasons to be skeptical of the Department of Political Cover Security is the fact that no one has been made to fall on his or her sword for the myriad of screwups that have been uncovered so far. However, it's a bit disingenuous to suggest that businessmen suffer where bureaucrats don't. You can oversee large losses and a dive in your stock price, get investigated for illegal market manipulation which causes your stock to fall farther, leave employees with the specter of layoffs and yet still stand to walk away with 33 million dollars. Dynegy and its employees and shareholders may take it in the shorts, but Chuck Watson, who also still owns 15 percent of the Houston Texans, will retire in style. I say that's more the norm than the exception, and I challenge the WSJ to prove otherwise.

Posted by Charles Kuffner on June 14, 2002 to Bidness