The Good Guys
By PAUL KRUGMAN - NYT Dec 24, 2002 - Original editorialTime magazine's persons of the year are three whistle-blowers: Sherron Watkins of Enron, Cynthia Cooper of WorldCom and Coleen Rowley of the F.B.I.
They deserve to be celebrated. After all, thanks to Ms. Watkins and Ms. Cooper, Jeff Skilling, Ken Lay and Bernie Ebbers have been indicted, and the politicians who did their bidding have been disgraced. Thanks to Ms. Rowley, incompetent officials at the F.B.I. and C.I.A. have been removed rom their posts, and we've had a searching inquiry into what went wrong on Sept. 11.
Oh, I'm sorry. None of that actually happened. The bravery of the whistle-blowers was real enough, but Time seems to be celebrating what should have been, not what was.
This past year brought shocking revelations about how American institutions, from corporations to government agencies, really operate. But the whistle-blowers haven't been rewarded; Time makes it clear that Ms. Cooper and Ms. Rowley are personae non gratae in their organizations. And those on whom the whistle was blown have mostly gone unpunished. Last week one F.B.I. official singled out by Ms. Rowley — he blocked an investigation that might have averted Sept. 11 — received a special presidential award.
I'm a history buff, so the events of 2002 made me think of a historical parallel — the English peasant rebellion of 1381. The rebels very nearly took London, but were turned aside by King Richard II, who promised to end the oppression of the common people by the aristocracy. As soon as the danger had passed, however, he made it clear that promises to little people don't count. "Villeins ye are, and villeins ye shall remain."
During the late spring and summer, amid corporate scandals and tales of F.B.I. ineptitude, Americans received many promises of reform. But once the political danger had passed, all those promises — even, incredibly, the promise that families of victims would get to choose one member of the Sept. 11 commission — became non-operational. Villeins ye are . . .
Yet some good guys did win victories.
Time named New York's attorney general, Eliot Spitzer, "crusader of the year." Mr. Spitzer's achievement shouldn't be overstated; he didn't "save capitalism," as some would have it. The $1.4 billion settlement he wrung out of the securities industry was a small fraction of what investors lost on highly touted stocks, stocks that insiders knew were worthless. And while the settlement requires that investment banks pay for some independent stock research, it probably won't be enough to erase suspicions that analysis is slanted in favor of big customers.
But Mr. Spitzer achieved far more than anyone else, and more than anyone could have expected. With no help from federal regulators, who should have been taking the lead, he used the limited powers of his office — the power to investigate and to publicize the outrages he found —— brilliantly. It's a tribute to his effectiveness that powerful congressmen tried to shut him down, by inserting language into reform legislation that would have stripped state attorneys general of the right to carry out Spitzer-type investigations. (What about states' rights? Oh, that only applies when states want to, well, you know.)
You also have to admire Mr. Spitzer's style. Key to his success was the discovery of incriminating internal communications. Addressing an investment industry dinner, he told the audience, "It is wonderful to be here this evening, because I really want to put faces to all those e-mails."
So I'm glad that Mr. Spitzer has gotten his due. But let me put in a plug for another group of good guys who haven't gotten their due: California's long-suffering electricity regulators.
Back during the crisis of 2000-2001, those regulators were ridiculed for saying that energy companies were manipulating the market. Nobody except an Op-Ed columnist or two believed them. But over the course of 2002, as incriminating memos and tapes came to light, they were fully vindicated. As with Mr. Spitzer, the compensation they have recently managed to extract — $1.8 billion in refunds — falls far short of the tens of billions looted from the public. But also like Mr. Spitzer, they've done very well given the lack of cooperation, and often active hostility, from Washington.
If truth be told, 2002 was a very good year for cynics. But it's the day before Christmas, so let's be thankful for our gifts: the good guys who made a difference.