The basic function of government is to protect person and property, but all too often government does just the opposite. In their zeal to protect us from financial fraud, government officials recently engaged in a series of actions that have cost tens of thousands of innocent people their jobs, reduced U.S. international competitiveness, and destroyed more than $1 trillion in value for American shareholders.
Every American now suffers from the excesses of certain prosecutors and judges, and from Congress’ tendency to pass legislation aimed at correcting what they perceive as problems without thinking through the consequences of their actions. In the wake of the Enron scandal, the government went after Enron’s auditor, Arthur Andersen, and destroyed the company. The Supreme Court has just overturned the conviction of Arthur Andersen. The government’s irresponsible attack on the company cost 28,000 innocent people their jobs and made the auditing business less competitive, which has substantially increased auditing costs for every U.S. company. That, in turn, hurts their employees, suppliers and customers.
New York Attorney General Elliott Spitzer has just suffered a defeat at the hands of a jury for trying to convict a stockbroker for noncriminal actions. Mr. Spitzer has used intimidation against a number of companies, charging them with actions that may not even be crimes. In essence, he “blackmails” them into paying large settlements under the threat of destroying their business (like Andersen), though they may be innocent of any wrongdoing. These unfairly induced, forced settlements are costly to innocent stockholders and current and potential employees.
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