The American economy continues to struggle. The market is down, unemployment is up, and so is the cost of goods and services.
Meanwhile, those in the best position to help right this ship continue to give us more and more reason to be skeptical that they can.
On Monday, 10 of Wall Street's largest firms -- firms such as Merrill Lynch, Goldman Sachs, Bear Stearns and Salomon Smith Barney -- agreed to pay $1.4 billion in penalties and fines for deceiving investors for years. Many knew that the business of financial analysis and stock picking was susceptible to conflicts of interest, but few imagined the depth of the fraud.
Analysts at these top firms apparently pumped up stocks in exchange for kickbacks, provided false information to investors to curry favor with corporate clients, exaggerated stock performance and arranged for company executives to purchase hot stock offerings in advance that were later sold at guaranteed profits.
The investment scandal comes not long after it was revealed that American Airlines had given its top executives tens of millions of dollars in bonuses at a time when it was trying to stave off bankruptcy. The previously undisclosed bonuses were revealed earlier this month when American was pleading with its flight attendants union to give up jobs and wages in order to keep the airline solvent. Already, the airline's pilots and mechanics have agreed to such concessions.
We should be surprised by such news. But given the litany of corporate missteps in the past 18 months, it's hard to be surprised anymore. Enron, Arthur Andersen, Adelphia, Qwest, Tyco, Worldcom, Global Crossing ... the list goes on and on.
The scandals paint an ugly picture of big business in America:
n Many of the country's biggest companies falsified their ledgers to improve the bottom line and lure unwitting investors.
n Major accounting firms that were paid to oversee the companies' books often looked the other way or were involved outright in helping debt-ridden companies paint a rosier picture of their financial status.
n The financial gurus paid to assist average investors reinforced the false images by lying about the companies in exchange for kickbacks.
n And top executives -- at the companies, accounting firms and investment houses -- were obscenely rewarded with bonuses, stock options and salaries that were hundreds of times larger than that of the companies' average workers.
Sadly, it's hard not to be cynical and expect more corporate failures. CEOs hailed as visionaries one week resign in disgrace the next. Investors never know until it's too late whether their financial advice comes from analysts who did their research or from analysts paid to give advice whether it's sound or not. And who are the accounting firms looking out for?
Average workers are the ones paying the price for the scandals in the form of lost jobs, disappearing pensions and dwindling retirement accounts.
America's economic recovery needs for workers to increase productivity, consumers to buy more goods and services and investors to put more money into the stock market. But workers, consumers and investors first must be able to trust Corporate America, which has a lot of work to do to earn that trust.