The roaring 1990s
Entertaining discussion of the 1990s economic boom in the New York Review of Books. One thing that particularly caught my attention, and stands as a good corrective to those who have an overly simplistic view of the relationship between shareholders and their companies, was this paragraph:"Indeed, the ability of corporate managers to hide financial information about their companies from those who own the companies—the shareholders—is a truly bizarre situation for which there is little justification. Corporations keep multiple sets of accounts—one set for published financial accounts, a second and unpublished set of books for tax purposes, and in many cases a third set of books for the managers themselves. In essence, corporations get to choose the yardstick by which they measure the profits that they publish. Under current law they have no obligation to reveal tax returns, and stockholders have no right to obtain them. One important reform that would illuminate the true state of corporate finances would be to require corporations to publish their tax returns. This would allow investors to assess profits by a standard yardstick."
Does anyone know why corporations (in the US at least) have no obligation to reveal their tax returns to their owners?
It also contains this great quote from 'Dow 36,000', made in 1999,
"The stock market is a money machine: Put dollars in at one end, get those dollars back and more at the other end.... The Dow should rise to 36,000 immediately, but to be realistic, we believe the rise will take some time, perhaps three to five years [Reviewers' addition - i.e., 2002 to 2004]."
posted by Matthew @ 1/20/2004 01:37:00 PM
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