Businesses need to be policed

Editor:

I rarely take exception to a writer’s opinion in The Chronicle, but I find myself doing this with Ed Stevenson’s recent column (“‘Laissez-faire’ can’t be that hard to pronounce,” Sept. 27).

My main objection is Stevenson’s naive understanding of what a market can do and what it cannot do.

A famous statesman once said the role of the government is to do for the people what they collectively cannot do for themselves. The same holds true for the market.

Given the choice between a lie and $20 billion versus the truth and $1 billion, with a 10 percent chance of being caught-well, you do the math, Stevenson.

Of course businesses will lie. That is exactly what Mr. Ebbers, the former Mississippi milkman, bar bouncer and motel owner did.

You cannot rely on the market to govern itself when the market is misinformed, and its actors are being lied to.

In the 1998 World Com annual report, it was stated that the Internet has been growing at 1,000 percent a year. Soon, everyone believed this lie, even AT&T. Its financial records, the one’s made public, were “cooked” to back up the lie.

Competitors could not understand how WorldCom was doing so well while they were hurting.

When the truth finally came out, WorldCom had to restate its income downward by some $74.4 billion.

I am not against criticizing the government, but let’s use some logic.

Jim Gander

Senior, Economics