Employment, wages and income distribution: Critical essays in economics: Kurt W. Rothschild. New York, NY: Routledge, 1993. $65.00 342 pp. ISBN 0-415-08579-9

Abstract

In contrast to previous examinations, this paper considers the ways in which accounting was deployed in and altered by the savings and loan crisis. Several theoretical concepts (accounting as an element of governmentality and discipline produced within a particular regulatory space) are used to illumine the role of accounting in the savings and loan crisis. The story unfolds as a prologue and three acts. During the prologue, accounting was supposed to “reveal” the financial condition of individual savings and loan organizations and the industry and to provide “facts” useful in regulatory decision making. In Act 1, a “right” accounting becomes one that justifies regulatory inaction and “conceals” the financial condition of these organizations. During Act 2, a “right” accounting shifts again and is now to reveal organizational insolvency. Finally, in Act 3, a “right” accounting continues as one that should “reveal” the organization but also begins to assume a role in disciplining the regulator. In each act, various actors in regulatory space exhibit a concern for getting the accounting “right”. Different sets of accounting practices are promoted as these conceptions of a “right” accounting change. Despite shifts in these conceptions, the actors in regulatory space do not question whether accounting can be made “right”. Accounting emerges from the savings and loan crisis with its status as a regulatory tool intact and with the potential for an expansion of its domain to include disciplining the regulator.