More corporate reforms still may be necessary

Posted: Friday, August 09, 2002

With this bit of regulatory fine-tuning, we can again let the economy be the economy.

You could read that optimistic message into President Bush's signing of bipartisan corporate reform legislation. ... Congress and the president engaged in some justifiable self-congratulation, but they should keep alert to the possibility that more reforms will prove necessary.

The new law takes healthy steps forward in protecting the public from dishonesty at the top of the financial system. Among its key provisions, the measure puts crooked executives at risk of long jail terms for defrauding investors and creates a federal accounting board.

Those are strong steps that draw appropriate lessons from recent disclosures about the shenanigans of unscrupulous high-fliers. No regulatory system is perfect. But the new rules indeed follow the American tradition of responding to abuses with stronger protection for the public.

The president and Congress can take pride in the legislation. Though politics drove his change of heart, the president overcame his initial reluctance to create new regulations. His course correction over a period of three weeks demonstrated his ability to quickly find the political mainstream. ...

Still, D.C. leaders should keep their eyes open for other areas in which a reasonable dose of new regulation would serve the public. It is hard to escape the feeling that new corporate scandals will continue to offer insights about practices that deny the public the honest information on which a free economy rests. ...

-- Seattle Post-Intelligencer

Aug. 2

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