Warren E. Buffett wrote an article in the New York Times about the crisis of confidence in the stock market today.
In his article he points to the legal, but improper accounting practices of today's corporations, especially inflated reported earnings, pension liabilities and stock options for employees, the majority going to executives, are accounted for.
According to his article, the Senate is the major reason for corporations to duck true accounting principles.
Back in 1994, the Senate, backed by Joseph Lieberman pushed the Financial Accounting Standards Board and Arthur Levitt, the chairman of the SEC, into backing down from mandating that options, etc. be expensed.
It looks like our current politicians are not interested in correcting this matter; they should rescind the 1994 action. They don't need studies or new rules, they need to act.
Unfortunately, they are more interested in running for re-election and collecting campaign contributions from corporations. Some of the CEOs are continuing spending stockholders money, directly or through trade associations, to lobby against real reform.
Mr. Buffet said: "For the shareholder's interest, and for the country's, CEOs should tell their accounting departments to quit recording illusory pension-fund income and options and start recording all compensation cost as expenses."
We, the citizens of this great country, should demand from our elected representatives, and for our business leaders to get back to truism, otherwise we will not need 'Homeland Security' because we will destroy ourselves.
Dieter Koerner, Payson