Dude, Where's My Country_ - Michael Moore [61]
And that’s what happened. While the average sucker was listening to all the blowhards on CNBC tell him that he should buy even more stock, the ultrarich were quietly getting out of the market, selling off the stocks of their own company first. At the same time they were telling the public—and their own loyal employees—that they should invest even more in the company because forecasters were predicting even more growth, the executives were dumping their own stocks as fast as they could.
In September 2002, Fortune magazine released a staggering list of these corporate crooks who made off like bandits while their company’s stock prices had dropped 75 percent or more between 1999 and 2002. They knew the downturn was coming, so these executives secretly cashed in while their own employees and common shareholders either bought up more stock (“Look, honey, we can get GM now really cheap!”) or held on to their rapidly depleting “worth” in the hopes that it would bounce back (“It has to! It always has before! They say you have to be in the market for the long haul!”).
At the top of the list of these evildoers was Qwest Communications. At its peak, Qwest shares traded at nearly $40. Three years later the same shares were worth $1. Over that period, Qwest’s director, Phil Anschutz, and its former CEO, Joe Nacchio, and the other officers made off with $2.26 billion—simply by selling out before the price hit rock bottom. My corporate overlords here at AOL Time Warner stuffed their pockets with $1.79 billion. Bill Joy and Ed Zander and their friends at Sun Microsystems? $1.03 billion. Charles Schwab of, yes, Charles Schwab, took home just over $350 million all by himself. The list goes on and on and covers every sector of the economy.
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Cuckoo Nutty World of Business
If CEOs whose behavior has raised questions of criminal wrongdoing were not in business, they would be considered sociopaths, a psychoanalyst contends.
“Analyzed as individuals, they might easily be seen as sociopathic,” Kenneth Eisold, president of the International Society for the Psychoanalytic Study of Organizations, said of business executives such as Kenneth Lay of Enron and Dennis Kozlowski of Tyco, in an address to psychiatrists. “But within the context of a group that never challenges them, their unethical behavior becomes normative—they have no internal conflict.”
Because of a willingness to ignore ethical issues during the economic boom of the 1990s, when many Americans profited from the stock market, “we got the CEOs we deserved,” Eisold said.
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With their man Bush in the White House and the economy pushed about as far as it could go, the market took a wallop. It was at first massaged with that old chestnut that “the market is cyclical—don’t take your money out, folks, it will come back up, just as it always does.” And so the average investor stayed in, listening to all the rotten advice. And the market kept going down, down, down—so low that you looked insane if you took your money out. It HAD to have bottomed out by now, so just hang tight. And then it just went down further, and before you knew it, your money was gone, gone, gone.
Over four trillion dollars was lost in the stock market. Another trillion dollars in pension funds and university endowments is now no longer there.
But here’s what’s still here: rich people. They are still with us and they are doing better than ever. They laughed all the way to the Swiss bank over the scam of the millennium. They pulled it off, mostly legally, and if they bent the law here and there, no problem, there aren’t more than a small handful of them behind bars as I write