To: WSFAlist at keithlynch.net
Date: Wed, 7 Aug 2002 11:16:27 -0400
Subject: [WSFA] Re: What were those people thinking?
From: ronkean at juno.com
Reply-To: WSFA members <WSFAlist at keithlynch.net>

On Wed, 07 Aug 2002 09:16:08 -0400 "Michael Walsh"
<MJW at mail.press.jhu.edu> writes:

>
> Goes back to this snake, this apple and this garden . . .
> Sometimes temptation is too strong for some people.
>
> mjw

Perhaps for some it was a slippery slope.  Overdrawing one's account by a
little bit could have been an innocent mistake, and once they noticed
that repeated withdrawals from their already overdrawn account could be
made, some might have figured that it was 'O.K.', that it was no more
illegal than 'maxing out' a credit card.  But there probably is some law
which prohibits intentional overdrawing of accounts without
authorization, given that dozens have been arrested.

The slippery slope may also have been at work in the accounting fraud
scandals.  Presumably the managers at Enron and WorldCom did not set out
with the intention of creating multi-billion dollar debacles which would
destroy their companies and ruin their own reputations.  Instead, they
knew that reporting higher earnings would propel the stock price higher,
so they began by taking advantage of the complexity of accounting rules
to report higher earnings, stopping short of outright fraud.  To keep the
game going, they had to continue to show earnings growth, and so were
drawn deeper into a trap of their own making.

Ron Kean

.

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