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"Suddenly, the bosses are up in arms" (International Business, Feb. 4) missed an important point. We quaint old corporatist Europeans have supposed that one of the advantages of the close relationship between business and the state is that politicians don't need as much lobbying to free up markets. The political machinery of the European Union hasn't been ideal in this respect, but it has led much of the deregulatory and competitiveness effort across member states in recent years.
For example, who has been pushing for a level playing field in online services? European Internet service providers? The clicks-and-mortar corporates, with services to sell? Step forward, EU Commissioner Erkki Liikanen. Which organization blamed the "persistence of insufficient degrees of competition and institutional integration" for the lack of competitiveness of the European pharmaceutical sector in 2000? Representative bodies of the European pharma companies? No, it was the Directorate General for Enterprise of the European Commission.
Everything isn't rosy in the European garden, but at the EU level, and at the national level, competitiveness measures are not a matter for regret among politicians and frustration among free-market businessmen. Life isn't that simple in Olde Worlde Europe.
Here in the U.S., business regularly gripes about "liberal" legislation. You know--minimum wage, worker safety, universal health care, safe and secure pensions, and the like. Imagine my surprise and confusion when I read that European bosses want to "liberalize" labor laws to let them get rid of workers faster. So, I'm confused. Is business for or against "liberal" policies?
Milwaukee In discussing Enron's bankruptcy, you overlook the moral hazard associated with large option schemes for top management ("Bracing for a backlash," Special Report, Feb. 4). Being economical with the accounting truth is tempting--and easier than achieving performance gains.
Robert Kuttner's "Enron: A powerful blow to market fundamentalists" (Economic Viewpoint, Feb. 4) points out that the whole system of self-regulating markets is dominated by selfish private interests. The Enron scandal seems to be the tip of the iceberg. A network of executives, auditors, analysts, bankers--with help from politicians and civil servants--manipulates accounting, ratings, stock options, etc., to satisfy their greed.
I think being overregulated is a smaller evil than being deregulated at the mercy of these people. Europe should keep away from this type of American market fundamentalism and stick with its established standards of a social market economy with less rich and poor people. The U.S. will follow because market excesses enforce regulation as the past has shown.
Your Enron Watch series fails to deal with an important aspect of this debacle: Until the last moment, both Standard & Poor's Corp. and Moody's Investors Services were giving it investment-grade ratings. Many investors, including pension funds, were misled. It seems to me that the filter used to devise ratings must change: The real challenge is to come up with new rules that could really evaluate risk in the present environment. The Long-Term Capital Management affair should have concentrated everybody's mind a long time ago.