On Stupidity

The Wall St. Journal on HP and Congress:

Are there any bigger lessons here about "corporate governance"? Not really. The fad of dividing the roles of CEO and chairman may sometimes make sense, but at H-P that division of responsibility led to dysfunction. Ms. Dunn seems to have meddled too much in corporate operations by supervising a leak probe run from the H-P counsel's office. That's one danger of dividing the two jobs. But like any collection of human beings, the knowledge and judgment of the individuals on a board matter far more than its structure.

Mr. Hurd and the entire H-P board also seem to have ignored a law of modern public relations, which is to get all the bad news out early, take responsibility, and move on. Instead, the board knew as early as June that the probe involved "pretexting," or misrepresentation, to obtain Mr. Keyworth's phone records, yet it failed to stop it. Mr. Hurd has finally acknowledged he should have paid more attention to the details of the probe, but he was also too slow to accept that Ms. Dunn had to leave as chairman. He's fortunate H-P's stock has performed so well, or some investors would be using this episode to call for his head as well.

As for Congress, we understand the impulse to grab some camera time by beating up on H-P witnesses. But even otherwise shrewd Members of Congress have been known to do stupid things from time to time. The last thing the country needs is a new Bureau for the Prevention of Bad Business Judgment, which is at bottom what the H-P saga is all about.

Though the Journal is undeniably correct here, good luck in getting Congress to take as nuanced an interpretation of the events as this. Politicians, as always, are out for blood, and no group of people is more easily demonized than businesspeople, never mind the fact that the size of our government is a direct function of the size of our private industry; government could not be government without the wealth created by business. Governments that print money in the absence of any economic underpinning experience hyperinflation; witness Germans buying loaves of bread for quadrillions of deutshce marks in the years after World War I.

And yet, HP et al will be demonized by government.

Explain to me how this makes any kind of sense?