Tuesday, December 13, 2005

Pump and dump

Now that they're being caught with their collective hands in the cookie jar, Congress wants us to believe they are taking steps to protect the integrity of the legislative branch. House Democrats have proposed reforms regarding lobbyists as well as restoring checks and balances.

At the same time, though slightly unrelated, Rutgers University Press has released Pump and Dump. The book is a history of Wall Street scandals.
"The authors explain how it was that so much of corporate America came to resemble a two-bit securities scam by focusing on the rules that mattered in three critical industries-energy trading, telecommunications, and dot-coms. Free-market hype and policies at the national level set the tone. While Wall Street wrapped itself in star-spangled packaging and celebrated its purported 'democratization,' in the real halls of democracy congressional allies of business gutted protections for ordinary investors. In the regulatory vacuum that resulted, regulators and auditors who were supposed to watch corporations instead promoted New Economy doctrines and worked with executives to endorse their firms as New Economy contenders. Ringleaders in the inner circles that committed fraud made their own rules, which they enforced through a mix of bribery and bullying."

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