Seeding a system with lies
By Vincent F. Safuto
staff writer
Sept. 13, 2002
The Wall Street elite are wringing their hands over the public痴 loss of faith and trust in the stock market, not so much because so many people lost all their money but because it値l be harder to clean people out via the stock market in the future.
Not only will most of us have less money for the barons to take, but we致e learned an important lesson: Wall Street is where the brokers and corporations win, not the investors. And information, almost as valuable as money itself, can be manipulated to the detriment of the individual investor.
President Bush and his corporate pitchmen can babble all they want about the need for greater financial education and the need for people to be informed on what they池e investing in, but for decades, maybe for centuries, investment firms have made their fortunes on the average person痴 lack of knowledge about money and finance, and have sought to keep the status quo.
The information revolution began to change all that. While few average people could afford a Bloomberg machine or a subscription to Dow Jones News Service, the Internet and all-business-news shows on cable TV were becoming a source of information for everyone.
In time, you could download a public company痴 SEC filings and other information for free, or for a reasonable fee. This flood of information, and the growth of access to the Web sites that provided it, meant anyone could learn details about companies hitherto reserved for insiders, both in the stock market and in the corporations themselves.
But investors soon found themselves with an embarrassment of informational riches. There was so much information, it was hard to figure out what was important and � most importantly � what was correct.
For the insiders had believed from the beginning that the era of universal information threatened their financial standing, unless something could be done to restore the status quo.
My theory on what happened is this: A few unscrupulous operators began to seed the system with false information. Granted, falsified corporate reporting did not begin with the information age, but now the stakes � and the circulation � were much higher.
Companies like Enron, WorldCom, Global Crossing, etc., 吐lipped� supposedly objective sources of analysis. The unsuspecting public, unable to believe that supposedly honest companies like Arthur Andersen or Merrill Lynch would ever lie to them, found out that anyone can be bought if enough lucre is brought to bear on them.
What was supposed to help us invest wisely has instead turned America into a nation of suckers, yet again. We致e been had by professionals, and we have learned an expensive lesson about the realities of the capital markets.
I can understand President Bush痴 desire to get the people confident in the economy and the stock market again, but he has to understand that we致e been deceived and had our own economic hopes and dreams used against us.
On Fox News recently, one panelist said something to the effect that everyone advises investors to be informed before investing. But, the panelist then asked, 展hat if the information is not true?�
That痴 the question we all need to ask now.
Vincent F. Safuto is a copy editor for the Press Journal. Reach him at Vincent.Safuto@scripps.com.
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