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Go Home Listen To Those Who Got It Right

THE PLANK SEPTEMBER 26, 2008

Listen To Those Who Got It Right

BY CLAY RISEN

Anyone who dug my post from last night should check out the op-ed in this morning's Wall Street Journal from former SEC Chair Arthur Levitt and former SEC Chief Accountant Lynn Turner. They do a much better job than I could of explaining the importance of mark-to-market accounting in reviving investor trust: "It's like your personal balance sheet," they write. "If you say everything you own is worth twice as much as it is in today's market, then you are misleading those who are relying on the data you give them, and you will ultimately destroy their trust and willingness to do business with you." Levitt and Turner aren't newcomers to the issue. They've been calling for honest, stringent accounting since before the Enron debacle. It's not hard to find people who got things wrong over the last decade. But these guys are two of the few who got it right. If we want to know where to go from here, Washington leaders would be wise to listen to them.

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3 comments

"Washington leaders"..."wise"..."listen" - not easy to get those in the same sentence.

I wonder if Paulson has talked with Levitt and/or Turner in the last twelve months. Might be a good idea to give them a call.

- fougasseu

September 26, 2008 at 9:58am

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Thanks Clay for the heads up.

- jet

September 26, 2008 at 10:00am

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The Journal actually has a slew of must-reads this morning. If I were running this thing, in my kitchen cabinet alongside Levitt and Turner would be Harvard's Lucian Bebchuk, who has been doing the yeoman's work over the last few years of highlighting the dangers of excessive executive compensation and fighting efforts to roll back Sarbanes-Oxley. Low and behold, he's got an op-ed in the Journal as well: online.wsj.com/.../SB122238704668077137.html, a condensation of a white paper he released Wednesday (for those really interested, it's here: www.law.harvard.edu/.../Olin620_Addressing-Financial-Crisis.pdf).

- mlcarr

September 26, 2008 at 10:31am

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