Artifically cultivated perceptions have overwhelmed even the most "objective" measures of corporate performance.
The most troubling image in most people's minds today of shakiness in the underpinnings of the mega-corporate world is the Great Recession that began in 2008, when widespread investing in mortgage-backed securities whose provenance and value almost no one could validly claim to know came within a hair's breadth of bringing down the global financial system.
But a kind of dry rot had set in substantially before that. Not only high-flying risk takers came to bad ends. The foundations of a variety of well-established businesses began to crumble, and even some of the world's most respected CEOs and their enterprises engaged in practices that should have given us pause.
The most dramatic cautionary tale in the years leading up to the Great recession was that of Enron: the nation's seventh-largest corporation and the darling of Wall Street one day, vanished in a heap of shredded documents the next. In its demise, Enron was revealed to be not much more than an exercise in fun with numbers. Although for a time, its accountants were able to convince the world they were truly pulling rabbits out of hats and genuinely materializing and dematerializing elephants and tigers, in the end, the "magic" was discovered to be what it always is : simply a form of show business. Enron's most fundamental drives and imperatives ended up being seen as no different from those of a circus.
More troubling still, Enron was far from the only corporate entity whose practices had become similar to P.T. Barnum's.
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Xerox joined the ranks of companies shamed by revelations of getting too caught up in the show.
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The list of companies in legal and regulatory trouble for their financial reporting grew.
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Even the revered General Electric eventually proved to be less solidly rooted than previously thought.
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The case of Sunbeam outlined the larger context in which a culture of financial flimflam had developed.
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There is still no solution in sight for the larger structural problems revealed in the wake of Enron's collapse.
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(c) COPYRIGHT 2002 ROBERT WINTER. ALL RIGHTS RESERVED.
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