It’s a populist uprising and even President Bush is playing. Like a cheap carnival game, departing icons of world capitalism are being dumped from the celebrity pedestal, plunged into a tub of water. Even the once invincible Martha Stewart is likely to find her next TV appearance on C-SPAN rather than mixing salads on the CBS morning show.

There is a lesson to be learnt, but it’s not the axiom that we need corporate governance reform, though that would be nice. This is a crisis of character: ego-obsessed, over-reaching executives put myopic self-interest above their stakeholders who they are pledged to represent. Despite the fantastic wealth they sought, these executives were brought down by hubris as much as greed. The disease of bloated ego has reached critical mass. This is Jim Jones crazy: these so-called capitalist icons have been drinking their own Kool-Aid.

What can be done?

Corporate accountability is the chorus song of the moment, where everyone from the head of the New York Stock Exchange to the CEO of Goldman Sachs proposes strengthening the independence of directors and streamlining the boards that they would select. These are worthy proposals and for the most part should have been adopted years ago. Directors need strong, more independent voices so companies can recruit competent leaders and boot out rogues.

But let’s not fool ourselves. Even tough proposals would not have stopped the management dissimulation displayed by executives as diverse as Jeffrey Fastow and Martha Stewart. Pre-meltdown Enron had a model “independent” board while respected companies like General Electric, which now faces questions about its accounting, would fail the proposed standards.

“You cannot legislate honesty and confidence,” acknowledges Leon Panetta, former Clinton Chief of Staff who is co-chair of the NYSE’s corporate accountability group, which is designing regulatory initiatives. Now President Bush has weighed in, pledging that his administration will do everything in its power to end the days of cooking the books, shading the truth and breaking laws.

The criminal docket will be one of the few places we can measure how serious the President really is. Considering the reward/punishment equation now in place for overreaching corporate chiefs, we have a way to go. As commentator Ron Unz has written, should Gary Winnick of Global Crossing be viewed as a success or a failure? Well, he built a now collapsed company that sucked out billions of investor dollars while laying worthless fiber. There’s evidence of accounting games. So he'd be marked as a bad egg by some. But he seems immune from personal liability and is comfortably passing the time drawing on a nine-figure nest egg in one of the most expensive homes in California. This scenario is all too common. By Gordon Gekko standards, Winnick and the rest of the rouges gallery are deemed success stories.

By the sad Darwinian logic of the marketplace, unless we change the rules of engagement, we can no doubt expect more Winnicks to come. What’s the solution? Reforms won’t stop the bizarre psychodrama that propels masters and mistresses of the universe into thinking they can call all the shots. Celebrity icons, which most of these men and women had become, are not used to being told “no” or even “slow down!” This is a crisis of personal ethics.

Forgive the sentiment, but now is payback time. “Make no mistake,” raged Ohio Republican Michael Oxley at the Congressional dunking of WorldCom executives, “the consequences to this sort of criminal activity, should it be proven, should be severe, at that may mean time in federal prison.” Whether this is more than just posturing as Republicans and Democrats joust for the high populist ground remains to be seen. But we can only hope that the ongoing humiliation of once invincible executives will usher in a period of sober management, constrained even further by boardrooms that are given the independent power to take their accountability responsibilities seriously.

If the President is serious, he needs to aggressively send Justice and the SEC after every Sam Waksal and Bernie Ebbers, Martha Stewart and Jeffrey Skilling. Air their cases in courts of law. If they’re found guilty, fine them so they have to reach deep into their Bermuda bank shorts. If the crime warrants, send them to jail. Reforms are nice. Fear works better.