People say that once you’ve learned, you never forget how to swim or ride a bicycle. To the extent that I’ve mastered biking and swimming, that’s true of me. I have a few more things I learned over the years which, no matter how much time passes between activities, I always pick up as if I’d never stopped. One of these skills is frosting cupcakes fast with two swoops of a spatula and no wasted icing. Hey, in some circles, that’s important! My father owned a bakery, and he always said his margins could be washed away in a frosting dish if I (referring to ME) didn’t take care. Our family was totally dependent on that bakery in a part of the world where people were good cooks and critical consumers who challenged the concept of paying someone else to do what they could do. I heard, “we’ll all starve if YOU use too much frosting”. With that kind of pressure, you don’t forget.
These days of heavy business news, I am recalling (in vivid detail) conversations or arguments with my father. As I watched Jeffrey Skillings (Enron’s ex-CEO) providing fodder for Congressional Theater while barely breaking a sweat, I thought about the thin line between taking advantage of legal loopholes and becoming a crook. I argued constantly with my father (who was not a crook) about whether he should charge our family transportation to the business. Or the meat and other food we kept in our home freezer that was purchased from a bakery supplier but brought straight home, and on and on. One day while riding home in our Ford, we stopped to fill up the gas tank, and I contended that charging the gasoline to the company was a form of dishonesty because we used the automobile for recreation. He contended it was allowable and he would be a fool not to do it. As a 15-year-old, I really got him going on this, and my father was tough. Over the years, we learned not to bring up these topics to keep family peace. Part of the problem was that my father would never have stolen a dime from anyone and was deeply offended at the implicit accusation.
My father’s family-owned company was miniscule compared to the big transnational firms that are attracting scrutiny around accounting practices these days, but the underlying questions and emotions remain eerily the same. We are at a watershed in many aspects of our capitalist life. The turning point perches on that fine line between competitive capitalism and unadulterated thievery.
I believe this watershed provides a real opportunity. The public and policymakers are stunned and paying attention. Business managers will not be able to hide behind their usual arguments against transparency and checks and balances. Investment analysts (some of them quite culpable) are eagerly searching for cover. Banks will parade endless self-audits in front of a bewildered public. Much is in flux. We have a rare and valuable chance to brighten that fine line of options which now lets too many fall onto the “crook” side and believe all is fine.
Meanwhile, I’m making cupcakes this weekend. It’s comforting, somehow.