Irresponsible business practices have induced an economic downfall that has affected every American. Capitalists are known for their hands off approach toward business, but recent scandals show us that large corporations are abusing this privacy. The latest trend of corporate scandals has raised questions about the degree of government involvement in businesses. This has created difficulties because of the traditional deregulatory attitude Americans have and because of the strong ties between corporations and politicians. (Gonick3) Although there are obstacles we must over come, it has become obvious that some sort of corporate regulation is necessary.
In regards to business, the recent history of America has been one of deregulation. After the restrictions corporations faced during the New Deal, they entered a period of neoliberalism. As Gonick states: "It is important to remember, after all, that neoliberalism was itself a response to an earlier crisis of profitability ultimately produced by the Keynesian welfare-state regime that was ushered after the New Deal."(Gonick 3). At the time, intellectuals and business owners believed that deregulation of business would promote investment deals and free trade. In the privatization of the public economy in the early nineteen seventies, new businesses quickly sprung up. Companies like WorldCom emerged to compete with Bell, the telecom titian of the time. (Gonick3) Soon, many companies found themselves in debt; they had overspent and overbuilt. "In their effort to win market share, the new players overbuilt, creating vast amounts of over capacity- and huge debt loads."(Gonick 3) In response to the huge losses, CEOs resorting to fake numbers to secure bank loans and equity investment. According to the editors of Business Week "If companies come clean about their accounting practices and stop managing earnings, stocks may suffer a prolonged drag companies have been overstating earnings by as much as fifteen percent annually over the last five years.