Instapundit prints a letter from a reader who argues that WorldCom's accounting fraud only extended the life of a company with a bad business model --
No, a very bad business model that said if you keeping on growing by acquiring lousy companies, you can become one great big good company, failed (this is simply a variation of the old, we sell everything at a loss but make up for it in volume). All the bad accounting did was extend the time before these people HAD to be laid off. In other words, they were not screwed because they worked for a crooked CFO; they were screwed because they worked for a stupid company.
While the full list of Worldcom's fraudulent accounting problems is yet to be revealed, this ignores the fact that those accounting practices also might have made it possible for the company to raise the cash to go out and buy all of those companies.
This part of the letter:
Second, the CFO was, almost for sure, not trying to defraud people in the sense of achieving any personal gain. Without any personal knowledge of this company, I can almost bet you, what he was thinking, was that if I just buy the company some time, things will correct themselves--and nobody will ever notice how I bridged this problem.
is, well, just funny.
