Transparency, not regulation

http://money.cnn.com/2007/09/28/news/companies/ratings_agencies.fortune/?postversion=2007100105

Transparency is the keystone to any future free market solution to sloppy business practices. Once we demand through our investment actions that transparency be a reality, then investor watchdogs can tell when a company is creating air rather than value. More private watchdog groups with experts could possibly be profitable business models charging a fee for reports. The reports would break down business operations and grade the company on transparency, profitability, honesty and viability. More of these reporting companies competing for the most excellent position in the public's eye would create oversight unstained by politics. We could even go the private certification route where companies pay to be certified once a year to instill public trust.

The reporting companies and the reported companies would be under pressure to produce true and understandable information regarding company financial health. A reporting company which fails to report accurate information would be exposed to public scorn and could not stay in business -- businesses in general would be pressured to embrace transparency as a necessity for survival. Investors would shun any company not willing to put their cards on the table and refrain from keeping an ace up their sleeve.

Collusion of reporting companies with those being reported on opens them to lawsuits with punitive damages that would make Jim Baker an honest man. I see no need for government oversight which is vulnerable to political game playing and favoritism. Government regulatory agencies would be rendered useless. If asked who oversees the reporting companies, I say the possibility of litigation and financial ruin oversees their activities -- much better than the tsk-tsk hand slap from one politician to another.

This way when a surprise announcement of finacial ruin is foisted on the public weeks after glowing reports, someone is held responsible, and i wouldn't want to be one of the the lying bastards caught.