THE ADMISSION by US telecom giant WorldCom that it fudged its books to the tune of billions has sent shudders throughout the capitalist system.
Investors and financial analysts are wondering how many other companies are in the same mess as WorldCom.
WorldCom, which has $48 billion in long term debt, disguised $7.6 billion dollars in expenses.
It claimed that it had made substantial profits in 2001 and the first quarter of 2002, when in fact it had made a loss.
Those supporting the Bush administration want to present this corporate fraud as an isolated case, and argue for stricter regulation.
As the Economist magazine pointed out when Enron collapsed: "In practice [the auditors] are chosen by the company's bosses, to whom they all too often become beholden.
"Accounting firms frequently sell consulting services to their audit clients; external auditors may be hired to senior management positions or internal auditors.
"It's far too easy to play on an individual audit partner's fear of losing a lucrative audit assignment."
However, the US Securities and Exchange Commission has consistently been opposed to even mild reforms to the current system.
Much of the talk about reform and regulation misses the point.
The dodgy practices of WorldCom bosses and auditors are not isolated cases.
Recently we have seen similar practices revealed in the Enron scandal, while in Australia Jodie Rich and Rodney Adler cooked the books of One.Tel and HIH.
And just as the news was breaking about WorldCom, another report announced that Xerox had overstated its profit figures by $2.48 billion.
This latest round of corporate fraud illustrates the hollowness of the supposed economic boom of the 1990's.
Before the first signs of economic instability hit in 2000, Alan Greenspan, head of the US federal reserve talked of "a new economic paradigm", and "averting the business cycle".
Yet the apparent growth in some sections of the world economy had been fuelled by share market speculation, with the IT sector leading the charge.
In the US, the price-to-earnings ratio-the ratio between a company's share value and its and profits-rose as high as thirty to one. In such a climate, massive profits could be realised by talking up profitability and future prospects.
Companies such as WorldCom, Enron and Amazon could expand rapidly on pure speculation.
Is it any wonder that when things turned sour directors with millions in share options would attempt to cook the books and preserve their wealth?
While CEOs and financial speculators have made billions throughout the 1990s, it will be workers that pay. Some 17,000 workers are set to lose their jobs at WorldCom.
Workers' sacrifice enabled the speculative boom of the nineties to continue for so long. Real wages fell for most of the 1990s.
The ideology of "globalisation" has been used to justify holding down wages and pushing through more and more free market measures.
Yet the number of corporate collapses show that the problem is not workers.
The problem is capitalism and greedy bosses.