Scientists in Maryland are considering a plan to poison a pond in order to rid it of an exotic Chinese fish that threatens to alter the eco-system in the rivers and lakes of that state. The fish, called a northern snakehead, is known for its voracious appetite, its ability to live outside water for several days breathing with a primitive lung and also its amazing knack for “walking” across land on its tail fins.
So far around 80 baby snakeheads have been found in the pond, which appear to be the offspring of a pair that were dumped there by a local man who had purchased the fish to make into soup for a sick relative (Asian cultural beliefs say that snakeheads have curative powers). So far the fish, which can grow to be several feet in length and eat native fish whole, have been found in six other states including, California, Hawaii, Maine, Massachusetts, Florida and Rhode Island.
Compare and contrast this natural disaster with that of a man-made one: stock options. This insidious little practice, made enormously popular during the Internet boom, may have led some corporate executives to overstate profits using cheap accounting tricks in order to artificially inflate the stock prices of their companies and then cash in. The result of all this greed is the constantly falling stock market – the Dow Jones industrial average closed at around 7,700 points on Tuesday – and that many people have lost their jobs, their savings or both in the ensuing corporate scandals.
According to Newsweek, stock options represent fully 16 percent of outstanding shares at the largest 200 companies in the United States, and some CEOs get paid virtually on stock options alone. If the company does well, even if it is just on paper, and the stock prices rise, CEOs and other company heads can stand to make a fortune. It is clear that greed pushed many of the people at Enron, WorldCom and others to pursue illegal means of inflating their companies’ worth. Also according to Newsweek, the CEOs of four companies now surrounded by scandal managed to cash in close to $300 million in stock before their firms collapsed. For that large of a chunk of change, wouldn’t you at least be tempted to sellout your stockholders and your personal ethics?
Someone needs to poison this pond.
Sadly, someone already tried and failed. Sen. John McCain tried to get an amendment passed that would have required companies to list stock options as expenses in their accounting books. The amendment was unceremoniously voted down.
If such a law had been in affect during the high and heady times of the late ’90s, Fortune 500 companies would have posted annual profit growth of 6 percent, rather than 9 percent, according to Newsweek. That’s right, a third of the profits listed during the Internet Boom resulted from accountants moving stock options around the balance sheet. Due to this accounting trick writes Newsweek’s Jonathan Alter, “insiders got insanely rich while regular investors bought into phantom profits. This is not a few bad apples; it’s practically the whole barrel.”
Our nation’s leaders need to counter the corporate greed that has so far this year lead to the two largest bankruptcies in United State History at Enron and WorldCom. Along with the proposed changes by President Bush in a speech on Wall Street early last week, John McCain’s proposal may have helped to prevent Enron-type scandals from happening in the future. Sadly, it was not to be.
Like the people in Maryland may find out with the Snakehead fish, it may be impossible to keep these things from spreading. Greed and nature are two forces that we may never be able to fully reckon with.
-Ben Koerselman is editor in chief of the Collegian. He can be reached at email@example.com