The NY Times is reporting this morning on a very troubling situation.

WASHINGTON, Oct. 28 — Frustrated with laws and regulations that have made companies and accounting firms more open to lawsuits from investors and the government, corporate America — with the encouragement of the Bush administration — is preparing to fight back.

Now that corruption cases like Enron and WorldCom are falling out of the news, two influential industry groups with close ties to administration officials are hoping to swing the regulatory pendulum in the opposite direction. The groups are drafting proposals to provide broad new protections to corporations and accounting firms from criminal cases brought by federal and state prosecutors as well as a stronger shield against civil lawsuits from investors.

Although the details are still being worked out, the groups’ proposals aim to limit the liability of accounting firms for the work they do on behalf of clients, to force prosecutors to target individual wrongdoers rather than entire companies, and to scale back shareholder lawsuits.

That all seems sensible, doesn’t it? Why should accountants be held accountable for the quality of their work? Isn’t it unfair to penalize accounting firms when they lie and obfuscate on their quarterly and annual reports for corporations? Where’s the problem as long as the corporations continue to provide a report with a healthy bottom line, because that’s what inspires confidence in institutional investors, which are what really drive our go-go, hyperized stock market these days.

And why should a CEO, President, or Board of Directors be held accountable for evil or crimes committed in their names? Is it really their fault if a few bad apples misinterpret their continuing demands for greater profits each quarter? After all, no one is holding Mr Bu$h or our Congress accountable for doing that exact same thing.

The point is that American law views a corporation as an “individual” – a legal entity so as to allow it to own property, ensure its continued existence after the death of the founder, and to provide for distributed ownership. (That last item would be those three shares of Amalgamated Buggy Whip your Aunt Mae left you in her will.)

As for scaling back shareholder lawsuits, well, that’s a given. What is the point of allowing the little people to tell you how to run a business?

To alleviate concerns that the new Congress may not adopt the proposals — regardless of which party holds power in the legislative branch next year — many are being tailored so that they could be adopted through rulemaking by the S.E.C. and enforcement policy changes at the Justice Department. [ed: stealth legislation]

The proposals will begin to be laid out in public shortly after Election Day, members of the groups said in recent interviews. One of the committees was formed by the United States Chamber of Commerce and until recently was headed by Robert K. Steel.

Mr. Steel was sworn in last Friday as the new Treasury undersecretary for domestic finance, and he is the senior official in the department who will be formulating the Treasury’s views on the issues being studied by the two groups [emph added].

Thanks heavens this isn’t being left in the hands of “activist judges.”