When you heard reports of the $3 trillion lost in the stock market since the Tragedies, you certainly wouldn’t be stepping outside logic to wonder how much of the total amount was actual currency, and how much of it was unrecognized wealth.

No better time than the present to (finally, someone said) address the topic of corporate greed and its consequences, both as they exist within reality and fantasy, where so much of the debate unfortunately seems to be taking place.

Previously in this space, the difference between actual losses versus what is lost on paper has been discussed; the distinction being a pivotal one: if someone put $20,000 into Enron and WorldCom (two traditionally squeaky clean companies) two years ago, whatever subsequent gains above and beyond his initial investment are all on paper, where it remains, useless, until the time when the stocks are cashed in, and thus the profits are realized. Upon Enron’s and WorldCom’s spectacular crashes, shareholders lost their initial investments, everything else was paper, a what-if. (This always presupposes the majority of investors didn’t have the wherewithal to pick up the phone and demand those stocks be sold at the first sign of trouble, another fantasy: if the stock wasn’t being sold at breakneck rates, it wouldn’t have plunged from $90 to 10 cents in eight weeks.)

So today, when you heard reports of the $3 trillion lost in the stock market since the Tragedies, you certainly wouldn’t be stepping outside logic to wonder how much of the total amount was actual currency, and how much of it was unrecognized wealth. There is no such place to learn these numbers, if they exist (that is, none I have found), and you are looked at crookedly should you venture to ask a professional. This is, without doubt, one of modern finance’s greater overall problems: it counts worth as if it were actual money. And stock brokers have the nerve to call me shortsighted for drawing a distinction between the two conditions (wealth and worth).

Of course, your author makes no claim to possessing financial genius, but investing in the stock market has always seemed, well, dubious, because 1) risk is a factor; your average investor works much too hard for his money to take unforeseen chances, goes a certain reasoning (mine), and 2) how can there not be a general unease that comes from the idea of phantom wealth, as opposed to dollar bills in your hand? Of course, it’s true that one who put his money in the market 30 years ago and left it alone would be wealthy today, no one denies the market’s overall strength, just that perhaps we have lent it too much credence.

But the problem here is, as Gail Witham was so good to remind me in a note some weeks ago, trust; had Enron and WorldCom merely (?) collapsed onto themselves, as many companies do, investors would have had more than enough time to get out of the way of the falling debris. (The Enron mess notwithstanding; there the employees were tied into stock they couldn’t sell.) Your average investor had trusted his money to those companies under the auspice they would conduct their affairs legally, never suspecting there were insider trading and accounting problems endemic throughout both institutions. Had any single investor lost that money through his own mistakes, or through somehow not knowing of Enron’s or WorldCom’s problems, there could be no legitimate complaints. People gamble, people lose; it happens.

Despite the rightful cries of protest concerning these same corporate and accounting failures, people are continually hearing the term “corporate greed” in a disingenuous context. Within the next year, a business will be erected around my writing career – it will never become Enron, WorldCom, ImClone or Global Crossing; neither will most American companies. Those were aberrations; despite the daily reports of new SEC investigations (today it was Bristol- Myers Squibb), it is still the case that the overwhelming majority will operate their companies above board, their accounting flawless.

And regarding the accounting difficulties: everyone ever elected to public office has offered one solution or another, all designed to not only straighten out the accounting industry (in fairness, an industry that could use a little tightening – the key word being “little”), but every single one of America’s companies, now being made to suffer additional costs (which comes with regulation) for things they didn’t do wrong. One bad apple et cetera, but you’d have to be blind not to notice the intellectual callousness in the disparity between Enron, the failure, and Coca-Cola, the clean, unmitigated corporate success story.

Whenever Government responds to outrage by pondering expansive new law (in itself another outrage), questions should come to mind, as a function of natural curiosity. For one thing, who is Government to suggest anything to corporations and their accountants so long as it abjectly refuses to balance its own books? Where are the laws – better still, the Constitutional amendments – forcing Government to adhere to strict accounting regulations, or to not spend outside of its means, or to not raise taxes unless backed by a super majority, or to limit the scope of its own expenditures? There has not been a system of government in the history of Man that has engaged in more fraudulent accounting, and therefore pissed away more money, than the American system; justice would best be served in enforcing the existing laws and otherwise keeping our mouths shut.

President Bush is no small party to this hypocrisy: How in the world can the man who signed the Farm Bill – more, the man who has yet to veto a single spending bill – demand of American companies they get their financial houses in order, or else? Or else what? A certain cynicism suggests that, if this were July 2001, perhaps the calls for new regulation wouldn’t be nearly as loud, the rush to vote before the summer recess not so intense. There cannot be a rational point of view suggesting these corporate meltdowns, and the actions of their executives, shouldn’t be investigated – investigate who should be investigated, convict who should be convicted, and so on. But in the process of their investigating and convicting, we would be remiss in not remembering: Government is just as bad as Enron or WorldCom, except that the financial stakes are much, much larger … as is the number of criminals.