Just some thoughts and ideas going around in my head while trying to figure out where I am and where everyone else is going.

Friday, April 3, 2009

The Art of the Accountant

Wall St BullI don’t think that I have given my explanation of our present financial or economic crises and how it came about. Now I suppose I could go into explaining about sub-prime mortgages and credit default swaps and collateralized bond obligations, but I bet you already know about those. Instead, I’ll just give you a quick allegory. Tell me if you have heard this one before? You probably have, it’s about 40 years older than my father and he’s been dead for almost 10 years now.

There is this boss who is hiring for a position in his company and he has 3 people come in to the office to interview for it. While interviewing the 3 people separately, he asks them the same question, “What is two plus two?”

The first candidate was a lawyer and he answered the question using historical and legal precedents, bringing up references to the Napoleonic Civil Code, the Magna Carta and even a few passages from the Koran and the Talmud. Finally he said, “As you can see, historically, ethically and legally, there is only one number that can be found to be a true representation of the sum of two plus two, and that can only be four.”

The second person was an engineer and thought there must be some trick involved, but she answered much more simply, "Depending on whether you’re dealing with positive or negative numbers," she said, "the answer could be plus four, zero, or minus four.”

The third person was an accountant and when he was asked the question, he looked to his right and then he looked to his left. He looked at the interviewer straight into his eyes and then he got up and walked over to the window. He pulled the venetian blinds down and closed them. Then he walked over to the door of the office, opened it and took a quick look outside. He closed the door and made sure that it was locked so that no one would enter. He walked back over to the desk and leaned over looking his potential boss in the face and said barely above a whisper, “How much do you want it to be?”

And that’s the crisis in a nutshell. Not enough people willing to give us a straight answer. Just accountants and CEO's and Madoffs telling us what they think we want to hear.

Here endeth the lesson.


  1. being an accountant myself I understand the answer, but I would have said 4...

  2. RunningMom - That's my gift to you. I remember getting this joke from a professor years ago and I couldn't figure out where this applied to the class or even life in general. Now I do.

    Gayte - Yes it's kind of a generalization condeming all members of a particular profession and definitly not fair. But after you hear about the all the things that have happened in the last 8 or more years you realize that at the heart of the whole problem were the people who counted the numbers.

  3. I like this. I see them doing this to a certain extent at my job regularily. No ever seems to know what the real number is. It's just what they think their boss wants to hear.

    Let something come out to contradict that number and that person is fired. It's happened.

  4. I'd never heard it, but I knew what the accountant was going to say from the very beginning. Cooking the books was the beginning of this trouble. Didn't they learn anything from Enron and Worldcom?

  5. D - I don't know why but it seems that's the way life is. Instead of seeking the the truth people are more interested in looking for what would impress the most or what would make the most for themselves and anyone who thinks differently will head into the direction of most whistle blowers, nowhere.

    Rich - I had forgotten about Worldcom but I know a lot of other people had forgotten about Enron which was just a couple of years ago. You are right, we just seem to do the same bad things over and over again and when they go wrong we wonder what happened and then always blame the other guy.

  6. Amen! This couldn't be any more true. Money/wealth is never a definate thing. It changes with the whim of those few key people. You the ones that make the rules. They tell us this stock is worth this and we buy it and then they say its losing value so we sell it and never once did we have anything tangible in our hands. The finacial sector is like a magical land where people make the rules up as they go and common sense is an enigma.

    That is how Madoff was able to convince people that his pyramid scheme was genius when common sense said that kind of return is not possible unless you are Christ in in the mood for multiplying fish and loaves.

    To my way of thinking I was broke before everything went to hell in a handbasket and i'll probably be broke when it rebounds. I just shake my head and Thank God I have a job.

  7. ye old magna carta - sounds like the freemen - man, folks dont even know where you are coming from on the real but i get ya

  8. Ingrid - Money/wealth may not be a definite thing, but getting a straight answer should be, and people never got that but accepted what we did get. That's why we are where we are today.

    Torrance - The Magna Carta? Well even though when it was written it wasn't meant to represent the rights of the common man, but it's where all other laws including the Constitution is based on, so that had to be put in.

  9. This has become common practice in the finanical world, crunching numbers, altering figures and doing favors for favors. Double dealing!

  10. Chet - It's become so common place, it's not only accepted but often times it's expected. This is not the way be, otherwise we will never get out of this mess.


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