Enron, WorldCom, Sitcom

July 28, 2002

by John F. Schmidt

It would be funny if it were not tragic. High level people are calling for high level regulations to catch high level executives paying high level lawyers to skirt existing high level regulations. Around and around it goes.

What is worse, if it were not for the anguished cries of millions of people whose personal financial worlds came crashing down while these same executives bailed out with their golden parachutes, no one would imagine they would ever pay for their wrongs. It’s the stuff of sitcoms.

Why can’t we prosecute? Because it is unlikely that they did anything that was “against the law.” No specific regulation exists to criminalize their actions. They carefully avoided tripping over any “laws.” For all the damage they did and the incredible greed they displayed, no one ever thought to write a regulation against it.

Something twists uncomfortably in our hearts as we ponder the prospect of having to craft rules and regulations for every situation. We sense it is a dead end street.

The problem was very capably described on (of all places) the July 10 opinion page of the New York Times. In a well-reasoned editorial by David Skeel and William Stuntz titled “Another Attempt to Legislate Corporate Honesty,” they point out that dependence on more criminal laws is “as likely to make things worse as to make them better.” The reason? “Criminal laws lead people to focus on what is legal instead of what is right.” The result is that corporate wrongdoers “escape punishment because they invest in creative ways to skirt the law.” Moreover, honest executives waste valuable resources while forced to play “the same legal games dishonest executives play.”

The authors do a credible job of describing the problem, but their proposal to stiffen accounting oversight rather than criminalize more corporate behavior falls a bit short, although it would certainly help. They seek “more honest corporate behavior.”

To achieve that result it is necessary to recognize that there is a fundamental standard of right and wrong that exists outside the pages of the Federal Register. Our own Declaration of Independence calls upon this same principle to defend our rebellion against the Crown of Great Britain. We should not forget that it was statutorily illegal to do that and punishable by death. But we justified our actions based on “the laws of Nature and of Nature’s God.” He is the ultimate definer of all right and wrong - even for kings and corporation executives.

Right and wrong is most concisely expressed by Jesus Christ: all the law boils down to two things: Love God supremely, and love your neighbor as yourself. If the executives had loved their stockholders they would not have created a speculative bubble and then cashed out before the inevitable crash, bankrupting their “neighbors.” Fearing God, they wouldn’t have lied about their company’s performance either. They would have asked corporate counsel what is fair and honest, rather than asking what they could get away with.

I know that all this sounds painfully simplistic to our jaded ears as we thrash about in exasperation trying to regain our millions in 401-k’s and our peace of mind. But we should value this moment for the treasure it really is. Regaining our heart-felt adherence to God is of far greater value than any dollars we may have lost.

The damage done to our national character by trying to legislate ourselves to paradise has been enormous and will only grow worse if we don’t correct our course. The truth is, all the laws and regulations in the world cannot make a person do right. Only obedience from the heart will work, and that can only come by humbly asking for God’s help.

When we simplify our legal code and re-establish it on moral principles traceable to the scriptures, we will see the virtual disappearance of Enrons, WorldComs and sitcoms. We will again become that “city on a hill” that other nations admire rather than assault.

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John F. Schmidt has written numerous articles over the last decade. Politically, he is an Alan Keyes-type Republican. Along with his wife, he has organized voter drives in Pennsylvania, and been active politically since the 1990 elections. His livelihood, until recently, was spent in automation engineering for a large global equipment manufacturing company, specializing in coal mining. WANB in Waynesburg, Pennsylvania hosted Schmidt's weekly talk radio program "Issues and Answers." His writing is intended to relate the headlines of today to the foundation of eternal truth - the Scriptures. He currently resides in Palm Beach County, Florida. Visit his website at: Inalienable-Rights.org

Send the author an E mail at Schmidt@ConservativeTruth.org.

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