Corporatism called to account

The year started with a climax and built to a crescendo, you might say. Argentina’s economy went down the tubes in January. Curtains, more or less. And nobody rushed to bail it out.

The shocks came in waves after that. There was the Rusnak affair in AIB, in which the bank lost $750 million! Incredible. You could pay off a few African countries’ debts with that. Six firings, two retirements and two ‘stepping downs’ followed. Some wondered were these sufficient, but by year end the dust had settled.

Then shares of the Irish drug company Elan fell E5bn in a panic sell-off, prompted by poor growth forecasts and reservations about its accountancy practices. They were not alone. Indeed, if there is one global story that rivals the war on terror it is the collapse of confidence in US, and by extension world, corporate culture, deriving in large part from accounting and auditing irregularities designed to maintain, and if at all possible boost, earnings and share prices.

There was Arthur Anderson, Enron and WorldCom, which inflated its profits in a $3.8billion accounting fraud. Imagine! Others cascaded in their wake – a domino effect of cataclysmic proportions for champions of American corporatism, not to mention pension funds.

Many observers reported a fundamental loss of faith and confidence in America. And in truth, we can see that ramify across the globe, nowhere more clearly than here. Our bubble has burst, and our tourist revenue from the USA is down drastically.

Of course, the bould Bush huffed and puffed about low morals in high places and the need to imprison those found guilty, as did senior members of his team. There were some very public arrests.

But did anything really change? I mean, your dad’s pension fund may have lost twenty per cent of its value as a result. It won’t come back. As for Argentina, for all the babble about honesty and integrity, it’s been left to sink or swim.