The Current Crisis

The Volcker Story

And why Hollywood will never tell it.

By 3.13.02

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Washington -- What does it tell you about Hollywood that already before the courts have decided Enron's fate and before congressional inquiries have made any headway in identifying the culprits Hollywood's resident producers and directors know the plot line? A dozen or so studios in La-La Land are rushing Big Screen and TV Screen melodramas to their audiences about the Enron debacle. Soon the credulous audiences, so addicted to seeing soldiers doing battle in slow motion and heroes explode with body parts everywhere, are going to watch three-piece suits connive and cook the books with stentorian pronouncements of two minutes duration -- about all the time Hollywood allows for dialogue before another visual effect explodes across the screen.

Hollywood will roll out its "real-life" Enron dramas despite the fact that no one yet knows what precisely the Enron story was or who the culprits might be. The skullduggery was vast but surely so complicated that it will take some doing to know its arcane plot. The victims are pretty much known but the exact identities of the occasional heroes remain obscure. The self-serving "whistle blowers" have yet to have their schemes or veracity established. Yet Hollywood is proceeding with its "Enron Story."

Is this not like rushing out a TV drama of the Lewinsky scandal a month after President Bill Clinton's inamorata was identified and still insisting that she knew not the big lug's passionate side?

Of course, Hollywoodians know all about corporate hustlers, cut-throat deal makers, and accounting frauds. Hollywood's executives engage in such practices with relish. Who was it who once explained that Hollywood is so suspicious of business because Hollywood engages in so many commercial sharp practices itself? I would remind you of the accuser's name, but we do not want him to be added to Hollywood's present blacklist.

For a certitude Hollywood's Enron dramas will never have a role for Paul Volcker. He is one of the business world's straight arrows, and Hollywood would not know how to depict a straight arrow riding in from Wall Street to clean up the Enron mess or at least the accounting mess. Nonetheless in real life the ageless former Fed Chairman and co-author of the Reagan-Volcker economic boom is hard at work attending to the infelicities practiced by Enron's accountants, Arthur Andersen. In so doing he is bringing down the boom on that firm, striking alarm in the other Big Five accounting firms, and attempting to restore investor confidence in corporate America, by reforming the decidedly blowzy accounting practices that have come to be practiced by some major corporations.

Ordinary Americans are amazed by accounting practices that allow liabilities to be palmed off as assets. Since word of Andersen's shredding of documents they have become increasingly dubious of accounting practices. For instance, it is clear that large accounting firms ought not also to be able to sell themselves to a corporation as its accounting consultants. This is clearly a conflict of interest.

Volcker, serving as a strict overseer of Andersen, is demanding that accounting and accounting consultancies be handled by different companies. Otherwise accountants have a vested interest in tailoring their figures to conform with what their partners on the consulting side of the firm counsel a corporation to do. If they did not, their partners in the consultancy side of the firm might be fired.

Volcker wants to end this practice not only at the ailing Arthur Andersen but throughout the accounting industry. Just as he was a sound money man in the late 1970s and early 1980s when stagflation had to be slain, he is a sound accounting man today when funny accounting practices threaten market integrity. Congressional moralists are itching to get their hands on this issue and to solve it with more onerous legislation. Better it is that Volcker have his way.

Then Hollywood can make a move about how this big shambling financial expert ambled out from the east coast. He cleans up an accounting industry that was allowing corporate America to go the way of Enron. And arrives in Hollywood at the age of 75 to become a star. That's entertainment.

R. Emmett Tyrrell, Jr. is editor in chief of The American Spectator.

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About the Author
R. Emmett Tyrrell, Jr. is the founder and editor in chief of The American Spectator. He is the author of The Death of Liberalism, published by Thomas Nelson Inc. His previous books include the New York Times bestseller Boy Clinton: the Political Biography; The Impeachment of William Jefferson Clinton; The Liberal Crack-Up; The Conservative Crack-Up; Public Nuisances; The Future that Doesn't Work: Social Democracy's Failure in Britain; Madame Hillary: The Dark Road to the White House; The Clinton Crack-Up; and After the Hangover: The Conservatives' Road to Recovery.