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Capitalism’s vulnerabilities

Capitalism works well with checks and balances in a free enterprise system. However, as Arianna Huffington in her book “Pigs at the trough” so astutely describes just how in corporate America crime pays – “the unseemly link between money and political influence is the dark side of capitalism.”

Synopsis:

1. Newt Gingrich’s Private Securities Litigation Reform Act was designed to protect accounting firms from shareholder’s lawsuits – allowing accounting gimmickry that robbed billions from pension funds and 401Ks of employees. This also allowed accountants to prepare phony balance sheets and profit-loss statements.



2. The Financial Modernization Act of 1999 abolished the separation of investment and commercial banking that led to the conflict of interest and double-dealing crimes.

3. Corporations spending billions lobbying and doling out campaign cash to members of Congress, thus contravening the will of the voters.




4. The emasculation of federal regulatory agencies preventing oversight that led to the collapse of many corporations and the loss of shareholder’s equity – “watchdogs have become lapdogs.”

5. The incestuous relationship between board of directors and corporate CEOs that granted exorbitant salaries, gratuities, pensions, corporate loans, stock options and golden parachutes not based on performance.

Chuck Idler

Grass Valley


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