Editor’s Note: The Sarbanes-Oxley Act of 2002, which President Bush signed into law on July 30, is designed to increase corporate responsibility. It is a step in the right direction, but it fails to address the central role played by Wall Street. Some CEOs and CFOs may go to jail, but, as usual, the people pulling the strings in Washington and Wall Street will get off Scot free.
As the world economy approached the New Millennium, crossing the Bridge to the 21st Century, a “New Era” was heralded: The unprecedented economic growth of the 1990’s was going to continue into eternity. The invisible hand of free markets, led by the revolution in information technology, seemed to promise no end to innovation, profits, and wealth for shareholders in the world economy and the United States in particular.
Today, however, the stock market is foundering, and the U.S. economy, mired in a recession accompanied by a falling dollar, rising energy and gold prices, and a continuing hemorrhage in the balance of trade, appears to be following the Dow. What has happened to change our outlook so abruptly? The answer is to be found in some fundamental realities about Wall Street, the United States economy, and human nature.
Socialists, libertarians, and conservatives have differing views on many economic questions, but they agree on one point: Greed drives the free-enterprise...