In the wake of the WorldCom debacle, much ink is being spilled on the topic of "corporate greed". One might think, reading the fulminations of politicians and pundits, that the hapless stockholders taken in by WorldCom's accounting shenanigans had innocently invested in the company out of naive patriotism, or perhaps a selfless desire to help a poor, struggling telecom giant down on its luck. But who, exactly, were the victims of WorldCom's alleged accounting fraud?

WorldCom executives now admit that they had overstated earnings through 2001 and early 2002. But WorldCom stock peaked in early 2000, and has been sliding pretty much unremittingly ever since; had their accounting been honest, the stock would only have plummeted faster. That means that anybody who held WorldCom stock in 2000 or earlier actually benefited from the scam, having been given extra time to unload their worthless equity before the roof caved in. The losers? Short-term speculators picking up a tanking tech stock in the hopes of a bounce, and short-sellers squeezed by inflated profit reports. Real people, to be sure, but not exactly the widows and orphans conjured up by the rhetoricians of "corporate greed". The latter had most likely bought into WCOM on the way up, cheered all the way as their portfolios skyrocketed, and were being pandered to, not ripped off, by the company's stock-price-preserving earnings sleight-of-hand. If only they'd known to take advantage of the gift they were given.....

Sadly, their naivete wasn't merely confined to believing in the technical precision of WorldCom's auditors. The great crash of 1929 taught Americans an important lesson: Wall Street is a gigantic shark tank, and holiday swimmers donning their snorkels and diving in had better be prepared to lose a limb or two. Over the subsequent seventy years, casual investors slowly forgot that lesson, and in the last decade or so an astonishing number honestly thought that blind "momentum" investing in empty shells like WorldCom was a sure ticket to Millionaires' Row. Slowly, the lesson is being relearned.

Back in the days of the Enron scandal, I suggested that Americans had progressed from "denial" to "anger" in their passage through the five stages of grief over the collapse of the stock market (and their dreams of universal tycoonhood). Today we seem to have reached the "bargaining" stage, with public figures earnestly debating the strict new regulatory measures that must be put into place to guard against future cases of corporate accounting fraud--as though tighter controls on earnings reporting would have prevented all those thousands of investors from running up the prices of hollow tech stocks like WCOM to utterly absurd levels, and then losing their shirts in the subsequent crash.

The next stage, in case you've forgotten: "depression".