If one takes a step back and views what occurred with objectivity, three lessons stand out. These lessons in turn can shed some light on recent events in the world of accounting. In particular, they help us comprehend why so few still care about accounting reform.

The first lesson actually constitutes a reminder -- the most important variable in politics remains economics. One can rant and rave incessantly about a variety of social issues, such as cleaning up the environment and improving education, but voters will care only if they feel good about their personal finances. If jobs evaporate, corporations leave the state, energy costs rise, and taxes increase, not many voters will heed concerns over the environment or education. Whether George Bush is re-elected depends almost exclusively on the economic status of the country. People want jobs and they want to afford what they desire to consume; finding weapons of mass destruction in Iraq has only secondary importance to them.

Recent events in California demonstrate conclusively the pragmatism of voters in the U.S. Many Democrats voted for recall as well as for Schwarzenegger, and many Republicans did not worry about Schwarzenegger's Democratic leanings on many social issues. While the far left and the far right maintain some purity in matters of great concern to themselves, the majority of voters in the middle fret not about their inconsistencies on many subjects. Rather, these voters want to solve problems, so they vote for whomever they believe can make things better.

California remains unique in having so many actors in politics. This observation leads us to a larger insight that for answers to life's problems the average American looks up to those in the spotlight. When confronted with philosophic difficulties, we ask Oprah Winfrey for advice; when thinking about love, we turn to Mick Jagger; when reflecting on spiritual matters, we follow the example of Shirley MacLaine. Success on stage or in the movies provides enough credentials for us to accept their counsel.

Knowing the priority of economics, the pragmatism of voters, and the fact that theater trumps substance helps us to understand what is going on in financial accounting today. That economics counts implies that concerns over accounting scandals occur only when investors lose money. If the markets are booming, who cares if managers lie about the accounting numbers? Pragmatists would add that a problem existed with corporate accounting scandals, but Congress passed the Sarbanes-Oxley Act and federal prosecutors have indicted a number of those who fudged their books. We solved the problem, so let's move on. Moreover, with much pomp and circumstance, business enterprises have proclaimed that they have cleaned up any shortcomings in their accounting operations, including the internal control systems. How much is substance and how much is rhetoric remains a debatable topic.

Not too long age many stoked the fires for reform, given the accounting woes of lots of corporations. Today, only embers hang on. However, until we deal with the root problems -- how corporate culture and institutional structures induce managers to manipulate financial reports -- accounting scandals will recur. Dealing only with some short-term surface issues will not expose and remove the long-term problems with accounting's infrastructure.

I grow weary of blowing the trumpet for real reform. At least I can buy puts and sell short.