Oops! So much for corporate accountability! Think Progress has the goods on Bush’s nomination for chairman of the SEC, Chris Cox who, not surprisingly, is soft on fraud. My very short take on this is that good corporate governance relies on sound rules and regulations only up to a certain point; ultimately, though, it depends on the personal integrity of the people in management and those sitting on the Board of Directors of a given firm. Even the most vigilant of SEC chairmen is unlikely to prevent a CEO who really, really wants to trash investor wealth and screw over employees from doing so. On the other hand, rules and regulations aren’t meaningless, either, and Cox’s history of gutting safeguards against fraud is, to put it mildly, deplorable.
One other note, and this gets down to dirty, dirty politics—although it’s grounded firmly in virtue! Democrats won’t, but if they knew what was good for them, they would make a colossal fuss about this during the confirmation hearings. The fact remains that corporate governance issues have the potential to rend the GOP right down the middle. According to the latest Pew poll, 88 percent of social conservatives and 83 percent of “pro-government” conservatives think that “too much power is concentrated in the hands of a few large companies.” That’s a good chunk of the Republican base right there. On the other hand, as Noam Scheiber recently noted, pro-business Republicans are getting awfully sick of social conservatives stealing the show and hijacking Bush’s agenda. In fact, the Republican business community has gotten very little of its wish list ticked off thus far—no Social Security phase-out, no tort “reform”, no tax reform. Chris Cox is one of the few bones that President Bush can throw them at this point. There’s a lot of tension here just waiting to be exploited by a bloody confirmation hearing.