Tuesday, February 17, 2009

As disgusting as it is to see American businesses grovel for money at the foot of congress, it’s even worse to see the kinds of things business people must endure from their “representatives.” Just once, I would like to see this:
How does a CEO answer questions about financial accounting when they're asked by dimwits who don't know enough to understand the answers? Honestly, I don't know what I would do if I were in the CEO punishment seat being thumb-screwed by Barney Frank, or mau-maued by Maxine Waters. I hope that I'd confess to the truth which is something like:
"Congressperson, you've asked questions about matters of financial accounting, but have not taken even the slightest effort to familiarize yourself with the vocabulary or principles of this technical discipline. Do you know anything about double-entry bookkeeping? If I told you that a dividend payment is a debit to retained earnings and credit to the cash account, would you understand any of that? What was your major? Do you balance your own checkbook? Do you prepare your own tax return?"
Given the Stalinist show trial we saw this week -- all based on what appears to be a plain ignorance of a few simple accounting principles -- it would appear to be a public service to point out that the dividends, salaries, junkets and all the rest are done without a single deduction from the capital accounts into which the taxpayer funds were shoved.

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