If your Registered Retirement Savings Plans (RRSPs) are performing like mine, then we’ve just takencare of that labour shortage Statistics Canada was warning about last week; most of us will need to keep working until age eighty-five just to put food on the table. Until a year ago, many people seemed to believe the stock market only went up; now it appears the market may never go up again.

How did this happen? First, let’s examine the role of the media in creating the bubble that was bound to burst. In a chapter of the book “Just Making Change” (entitled “The fix is in. Big time”), journalist Bruce Rogers accurately predicted that “the bias of the media could burn the unwary.

Business interests have helped define the newspaper and seriousjournalism for centuries, and most business journalism in radio andtelevision is uncritical cheerleading.”

Now, RRSPs and private pension plans are taking the biggest hit as stocks spiral down the toilet – and the hand on the toilet handle is none other than good old-fashioned corporate greed (something which we apparently didn’t mind so much, as long as our mutual funds were going up). Think how much worse the situation could have been if the Canadian Alliance had got whatthey have long advocated: the complete privatization of the Canada Pension Plan. Imagine what would have happened if these funds were invested in the stock market, along with your RRSP.

New Democratic Party (NDP) Labour Critic Pat Martin has called for immediate government action in response to the financial crisis. In particular, he asked Canadian Prime Minister Jean Chretien to “raise the standard of auditing practices in financial reporting,” to impose regulations to prohibit auditors from providing other financial services to the companies they audit, and to remove the firm ArthurAndersen, implicated in the Enron and WorldCom collapses, immediately as auditors for the Bank of Canada.

It’s highly unlikely that Chretien will even engage in the tentative posturing being practiced on this issue by American president George “Dubya” Bush. That’s because, more thanany other federal party, Chretien’s Liberals rely on major corporations for funding.

With a leadership review underway and individual party members jumping off his bandwagon, he’ll be even more reliant on the Power Corporations and the Bombariers of the country for support. He won’t pass a law prohibiting the federal government from doing business with companies convicted of fraud. He won’t require auditors to maintain their independence from the companies that they are supposed to be policing. Hecertainly won’t ban corporate contributions to political parties. In otherwords, don’t expect much help from Ottawa on this one, folks.

Since we’re largely on our own in trying to make the best of the financial morass, freelance journalist Harvey Schachter suggests that we read “Financial Shenanigans” by Howard Schilit. In last Friday’s Globe and Mail, Schachter notes the book “reminds us that accounting sleight-of-hand is not a recent phenomenon. [Schilit] presents a long list of well-known companies that in the past fifteen years resorted to questionable — though not necessarily fraudulent accounting.

But the message is clear: This isn’t new and it isn’t going to go away easily, because as his book shows, accountingcan be flexible and when companies hit tough times — individually or collectively — some will be tempted to disguise it by using the most favourable accounting interpretation possible.”

According to Schilit, companies cheat because “(1) it pays to do it, (2) it’s easy to do, and (3) it’s unlikely you will get caught. Even when they are caught, the penalty isoften too little, too late.”

Vermont Representative Bernie Sanders (the only self-declaredsocialist in the U.S. Congress) points out that the financial meltdown is“not just about accounting.” He argues “the American people have a much better understanding than members of the Bush administration or members of Congress that this is not just about a few bad rules or a few bad apples. This is about how corporations do business in America today, and about what members of Congress who take immense amounts of corporate money to finance their campaigns allow those corporations to get away with.

Sure, corporations and their accountants have taken advantage of loopholes and lax regulations to inflate their earnings statements, and sure they have used their campaign contributions to ensure the loopholes stay open and the regulators let them get away with murder. But if you close the loopholes and increase the level of oversight, that is not going to usher in a new era of corporate responsibility.

If all that comes out of this are a few accounting reforms — necessary as they may be — most Americans are going to say, rightly, that the corporations were let off the hook again.”

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Scott Piatkowski

Scott Piatkowski is a former columnist for rabble.ca. He wrote a weekly column for 13 years that appeared in the Waterloo Chronicle, the Woolwich Observer and ECHO Weekly. He has also written for Straight...