March 16, 2005

Reaction to Ebbers's Conviction

Two great reactions to the guilty verdict, from two of my favorite sources. First, Larry Kudlow tells the jurors to Take A Bow

Free market capitalism must be based on the rule of law. By enforcing the law, the twelve Ebber’s jurors did far more for honest accounting and healthy, functioning markets than thousands of regulatory pages, such as the onerous Sarbanes Oxley. The brave jurors dealt a serious defeat for CEOs who want their subordinates to commit crimes while they maintain plausible deniability. The dumbo defense is finito.

The vast majority of Americans in business are clean and honest entrepreneurs who innovate, build businesses, and create jobs. Business is the backbone of our economy despite the fact that there will always be a few rotten apples. That the Ebber’s jury convicted one of the most rotten apples will strengthen business and improve our free enterprise system. Jurors, take a bow. You deserve it.

Then my pals at the WSJ Ed Page back up my contention that the conviction does more good than Sarbanes-Oxley, then go one better to compare it to NY AG Eliot Spitzer's non-convictions.
But under Mr. Spitzer's business rules, what matters is what he claims is proper behavior now, whether or not it was considered improper in the past. Unlike the prosecutors in the Ebbers case, the Attorney General knows he can get what he wants by hammering a business in the press and undermining its stock price, without ever going before a jury. This practice strikes us as fundamentally unfair, and contrary to the rule of law, but Mr. Spitzer knows we're the only sour note in his media chorus.

Well, guys, the Weekly Standard did a very non-flattering cover story a few weeks ago. And you can count Three Sources Blog on your side as well. Let the tobacco lawyers and ambulance chasers seek settlements. Attorneys General should seek convictions and enforcement of the laws that are on the books.

Economics and Markets Posted by John Kranz at March 16, 2005 1:48 PM