It cracks me up that the current business mischief affecting the economy are often attributed to a “perfect storm” of events, and not simply as a matter of corporate malfeasance. It seems that if a conflation of events did not occur, we would never have known about the underlying accounting problems. I don’t think it is problem of accounting irregularities, but a systemic character of capitalism (hyper-capitalism) that there is an incentive to cook the books.
I did a Lexis-Nexis search for “a perfect storm” and not “movie,” with 155 hits in major newspapers during the last year (the phrase “a perfect storm” is an obvious reference to the movie and book of the same name). Here are some examples of economic events being attributed to “perfect storms” coming together and creating a mess (is the “unseen hand” a “perfect storm”?).
In the “The Boston Globe”, June 30, 2002, by Hiawatha Bray:
You say this telecom slump will continue for at least another year. Why? A. We’re in the middle of a perfect storm, as far as technology is concerned. Many forces have come together simultaneously to put not just the tech market, but any kind of capital spending . . . in a bad situation for corporate America.
From an editorial in “The Jerusalem Post” on June 10, 2002:
Let’s adopt another metaphor. A perfect storm is brewing over Israeli skies. The daily threat of terrorism, growing ever greater in the expectation of a “mega-attack” that could take hundreds of lives is worry enough. A self- inflicted economic tsunami is the last thing this storm- tossed ship needs.
On June 25, 2002 in “The Atlanta Journal and Constitution,” Shelley Emling wrote a story titled “Did Martha weep dirt under the rug”:
And the ripples could spread much wider. Analysts say the country is in the midst of “a perfect storm” — a confluence of business scandals that seem perfectly timed to stir public outrage over corporate greed.
“It’s unfortunate for Martha Stewart this is happening now,” said Jeffrey Klinefelter, an analyst at U.S. Bancorp Piper Jaffray in Minneapolis. “There’s a heightened emphasis on stock trading these days.”
The “Los Angeles Times” ran the story titled “Andersen Jury Hears Forceful Arguments,” by Jeff Leeds on June 6, 2002:
“The issue isn’t whether they did a perfect job” of destroying all incriminating papers, he said. “They did it because their strategy was … the less, the better. Who knows what kind of hideous documents might be buried in those worker bee files?”
But Hardin, in an often manic four-hour summation, said Andersen drifted into a “perfect storm” of circumstances that made the document destruction appear “suspicious.”
But he insisted the firm’s conduct did not amount to a crime. No one persuaded anyone else to shred documents with the intent of keeping them from the SEC.
“The San Francisco Chronicle,” May 26, 2002, in an article titled: “No sequel in store to state energy crisis”:
“We’re forecasting there should be enough power to meet demand in California this summer,” said Gregg Fishman, spokesman for the California Independent System Operator in Folsom (Sacramento County).
That’s a far cry from late 2000 and much of 2001, when a combination of weather, soaring natural gas prices, a poorly designed market and manipulative power traders conspired to create a “perfect storm” scenario that made supplies tight and prices high.
In a story written by Jerry Hirsch in the “Los Angeles Times” titled “There’s No Accounting for Andersen’s Miscalculations” on May 12, 2002:
The result is turning out to be what proponents of accounting industry reform feared; with the collapse of Andersen, the industry will be concentrated in the hands of four powerful firms.
“There’s been a perfect storm of elements whipping things around,” said Alan Schulman, a veteran class-action securities litigator. “We have all of these forces at work and no one making good decisions.”
In the “Milwaukee Journal Sentinel” on May 5, 2002, in an article titled “A perfect storm”:
The perfect storm. That’s what former Gov. Martin Schreiber calls it. A conjunction of forces never seen before has swept away the political status quo in Milwaukee and Wisconsin. In a land of legendary stability, everything is suddenly up for grabs.
From a story titled “Healthcare again grabs political attention” by David R. Francis in “The Christian Science Monitor” on February 5, 2002:
It’s “a perfect storm,” says Dr. Richard Corlin, president of the American Medical Association. This is a “very serious issue.”
The storm is multifaceted: Washington is trying to hold Medicare payments in check – imposing a 5.4 percent cut in payments to physicians this year – even as medical prices generally are rising at three times the overall US inflation rate. At the same time, the recession means hundreds of thousands of people are losing health insurance along with their jobs.
Tom McGhee wrote “Bankruptcy filings inch past first quarter of volatile 2001” on April 10, 2002, in “The Denver Post”:
Businesses and consumers drifted into the economic equivalent of a perfect storm last year, said Jack Williams, a professor at Georgia State College and the bankruptcy institute’s 2001 scholar-in-residence.
Consumer debt was high with an average credit-card debt of $ 8,367 for every household that had at least one credit card, according to CardWeb.com, which tracks the credit card industry. The high debt burden made it more likely that a weakened economy with its corresponding increase in unemployment would push more people to seek bankruptcy protection.