DRUG DEALERS, CEOS AND OTHER SCUMBAGS

It will be interesting to see what happens to the distribution of respect
and income in this society as the market scandals of the last couple of
years fix themselves in public memory.

Your average CEO, once a pillar of the economy, has taken a major hit in
terms of respect.

I haven't actually seen a poll yet, but so far as public esteem goes CEOs
must now register somewhere among politicians, journalists and drug dealers.

And the drug dealers are moving up. Ottawa's bold decision, tiptoeing along
in the footsteps of Tony Blair, to talk about decriminalizing the
possession of marijuana means much of the stigma associated with drug
dealing is likely to disappear, for what's the harm in selling something
the possession of which is no longer a crime?

True, there is an equally bizarre precedent in our laws on prostitution --
what's illegal is not exchanging sex for money but advertising a
willingness to do so -- but even if dealers continue to be arrested, the
public at large is increasingly likely to view their business as harmless.

Prostitutes are now referred to as "sex workers" and there is a very active
lobby in what calls itself the "sex industry." You want to kill the fun in
a thing?

Make it into an industry.

CEOs won't get off nearly so lightly, however.

They face new layers of regulation, increased criminal penalties when they
or their lieutenants go astray, and widespread skepticism about their every
public reassurance. The only good news in all of this, a consequence that
presumably was not intended, is that their pay very likely will go up.

Why do drug dealers make so much money?

Or at least why did they, when they were still social pariahs?

Because the work was dangerous, the stigma great and the chance of going to
jail non-negligible. Ditto 21st-century CEOs. They aren't in the habit of
taking each other out, but for the next few years at least they'll be
suffering significant stigma.

Plus, every time they make a decision they'll be looking over their
shoulders for George W. Bush's corporate SWAT teams -- some version of
which is bound, with the customary lag, to be introduced here. Who would
want to be a CEO in such a climate? Why not take your options and an early
pension and go into charity work, politics, education or column-writing?
But if the supply of willing CEOs goes down, the compensation of those who
remain is likely to go up.

Corporate directors' fees are bound to rise, too. Robert G. Eccles wrote on
this page yesterday that, from now on, "boards must be controlled by
independent outside directors who have the knowledge and resources and
spend the time needed to sign off on financial statements." In the past,
high directors' fees may have been management's way of buying a quiet life
from their board.

In future, directors will demand high fees just to cover the costs -- and
risks, for doubtless they will be more exposed to liability, too -- of
doing their job.

As oversight becomes more intrusive, costs will rise all through the
corporation. Some innocent souls may think we can add layers of new
regulation -- both internal and external -- and somehow "make the
corporation pay" for it. But investors aren't going to accept lower rates
of return on their investments. If control costs rise, corporations will
either cut other costs or, when they can, pass along the higher costs in
price increases. The effects on the distribution of income will be perverse.

CEOs, directors, and comptrollers typically don't come cheap.

Their getting more business while customers and other suppliers get the
business is probably not the outcome most would-be regulators seek.

All the changes that are coming might be worth it if they increased the
amount of reliable information in the system.

But will they? It's already illegal to cook the books, steal money from the
firm or obstruct justice by shredding incriminating files.

The regulators want more than that, however. They want a new age of ethical
behaviour.

This is very good news for the ethics industry.

Ethicists -- yes, people actually go around calling themselves that -- will
be in great demand to certify corporat