There is increasing evidence that America’s capitalist system, the very one declared dreadfully wounded amid scandals involving Enron Corp., Arthur Andersen LLC, Tyco International Ltd. and others, is healing from its self-inflicted wounds.

For evidence, I point to the great arbiter of all things involving the U.S. economy: the Dow Jones industrial average. Though 2002 was lousy, the outlook has brightened considerably since October. The Dow’s 20 percent gain since then could be another head-fake, like previous rallies in this bear market. Many money managers, however, believe that the lows set in October are solid.

The reason is that our system is working to clean up its messes and its excesses. Lawsuits and investigations continue. Several companies have collapsed and even more are operating under bankruptcy protection while the courts and their creditors do their jobs. Commerce is moving on.

Recognizing this, we must also admit that the system is repairing itself without a lot of help from the government. Sure, the politicians have told us they’re hard at work. They’re throwing money and bureaucracy at the problems. Trouble is, Washington’s “solutions” have yet to prove effective and they’re moving too slowly to help anyone.

The Sarbanes-Oxley Act of 2002, designed to improve corporate governance, has been enacted. From what I can tell, the vast majority of U.S. companies are already largely compliant with its tenets. For those who are eager to flout the rules, Sarbanes-Oxley is unlikely to stop them. The folks who stand to gain the most from the increased regulation are consultants, who are poised to earn big bucks telling companies how their boards ought to be structured.

Meanwhile, a big pot of money is headed toward the Securities and Exchange Commission, currently in the midst of one of the busiest times in its history.

The biggest trouble there is that it’s essentially leaderless. Harvey Pitt, forced to resign months ago, is still acting as the group’s chairman. He’s likely to remain the lame duck for months until former investment banker William Donaldson can be confirmed. This is progress?

The SEC has another headache: the Public Company Accounting Oversight Board, the group that’s charged with policing the accounting industry. It had its first formal meeting earlier this month – six months after its creation by Congress.

First the board’s members voted themselves annual salaries of $452,000, according to a recent story in The New York Times. The salary, which is about what partners at big accounting firms earn, was just the beginning.

Then the board really got down to work. It approved a lease that would put its headquarters in the Washington, D.C., offices formerly occupied by Arthur Andersen.

Haven’t any of these people heard of public relations? Maybe, but they haven’t yet hired a public handler. Deeper down, the Times story reports the board plans to pay its director of external communications $250,000 annually.

More troubling than that is the fact that one board member, according to the Times story, proposed rotating the group’s own auditors every five years. Two other board members “strongly objected and said the issue required further study,” the Times wrote.

That’s pathetic, but it shouldn’t surprise anyone. After all, this is the formerly self-regulated industry that resisted changing itself for so long that it virtually welcomed more government onto its back.

Thankfully, investors aren’t waiting around for Washington. They’re making their own decisions about what to do with their money, and the stock market’s rebound reflects their increasing confidence. Currently, they’re busy bracing for earnings season, which began last week and will intensify over the next few weeks.

There is a happy ending to this story, and it comes by way of the private sector. The world’s top credit rating agencies, Moody’s Investor Services, Standard & Poor’s and Fitch Ratings, have said they plan to add evaluations of corporate accounting policies in their reports.

Analysts from these firms, which provide reports on most of the world’s publicly traded companies, would note if a company’s accounting strays from generally accepted practices.

Actions from the credit rating agencies, which are motivated to speed and accuracy by competition, will evoke far stronger and longer-lasting change than any of the government’s proposals.

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Des Moines Business Record staff writer Michael Lovell writes a weekly column on business issues affecting Greater Des Moines. He appears on Sunday mornings to talk about business trends on WHO-TV. Contact him at 288-3336.