The American Spectator

p> Greed Wasn’t So Bad br> Maybe we shouldn’t have been so hard on Eighties bad guys Mike Milken, Charlie Keating, Ivan Boesky, and Robert Campeau. These guys are pikers next to the growing Rogue’s Gallery of the Nineties, and the current generation represents The Establishment, not the rogues and outcasts who rose to prominence before flaming out during the Greed-is-Good Decade. Recessions, like those giant waves off Lake Michigan that occasionally bring in metal filing cabinets and trunks with corpses, unearth a lot of bad business. /p>

This didn’t just start with Enron’s bankruptcy. Lucent Technologies vaporized three Enrons worth of market value between 1999 and 2001. Remember Nineties disaster stories Cendant, Conseco, Waste Management, and Sunbeam? We’re still unearthing the mess at former high-fliers WorldCom, Global Crossing, and Tyco International. These all involved conduct ranging from negligence to accounting irregularities to recklessness to fraud to criminal behavior. If two of the biggest, best companies in history, GE and IBM, are offering greater corporate disclosure in the wake of criticism that they manipulated results to keep pleasing Wall Street, who could possibly be immune?

p> Blame It on Lee Iacocca br> Our culture has come to reward success so extravagantly, and punish failure so swiftly, that a Bull Market is guaranteed to create excessive behavior. And we got this way through the best motive: the profit motive. /p>

In 1979, Lee Iacocca became CEO of Chrysler. Bankruptcy was a real possibility and Iacocca paid himself $1 per year (plus options to buy millions of shares at its then-depressed price of $3 per share). He saved the company, the stock skyrocketed, and cashing in those options led to a dynastic fortune. No one who owned the stock at the time could complain.

Michael Eisner, likewise, saved Disney after taking over leadership in 1984, and made a nine-figure fortune for his efforts. If CEOs didn’t get the hint that further riches were out there, their critics practically forced them to take big hunks of compensation in stock options. The corporate raiders of the era claimed American corporations were stagnating because its managers weren’t owners. The survivors of that period took options as a way of telling investors “we’re all in the same boat.”

p> A Nation of (Short Attention Span) Investors br> The Bull Market made all those CEOs rich, along with the growing investing public. The rising stakes, however, made everybody impatient. With more money pouring into the market, ever more desperate to get in on the party, stocks rocketed on the possibility of future growth, and plummeted even when companies announced good results that were somehow not good enough