Skip to comments.The Stench From Enron's Crash-And-Burn
Posted on 12/11/2001 8:45:11 AM PST by bigdog
AUSTIN - Hail and farewell, O Enron! What a flameout. The Establishment media, sucking its collective thumb with unwonted solemnity, is treating us to meditations on two themes: AUSTIN - Hail and farewell, O Enron! What a flameout.
The Establishment media, sucking its collective thumb with unwonted solemnity, is treating us to meditations on two themes: "How the mighty have fallen" and "Who would have thunk it?" Pardon me while I snort, in lieu of ruder noises, and offer two themes of my own: "What took so long?" and "Anyone with an ounce of common sense."
If you want to know what this story is about, pretend that Bill Clinton is still president. Pretend that Clinton's long-time, all-time biggest campaign contributor - a guy for whom Clinton has carried water for over the years, a guy with unparalleled "access," a shaper of policy, a man with a veto on regulatory appointments affecting his business, with connections at every level of the administration, a political fixer beyond the wildest dreams of James Riady - imagine that this guy's worldwide empire has tumbled into bankruptcy in just three months amid cascading reports of lies, monumental accounting errors, evasions, iffy financial statements, insider deals, a board of directors rife with conflicts of interest, top executives bailing out with millions while regular employees see their life savings shrink to nothing. Imagine all this back in the day of Bill Clinton.
Holy moley, we'd have four congressional investigations, three special prosecutors, two impeachment inquiries and a partridge in a pear tree by now. The Republicans would all be drumming their heels on the floor in full tantrum.
But this is not President Clinton; it is President Bush - so of course different standards must apply. The fact that Ken Lay, Enron's chairman, has been Bush's chief money man and key backer since he first went into politics is mentioned only in passing. The media don't want to be impolite. They have been credulously swallowing Enron's PR and overlooking the obvious for years.
The main problem with Enron is that it has never produced much of anything in the way of either goods or services; it has not added a single widget to the world widget supply. Enron is in the business of "financializing," making markets, trading in wholesale electricity, water, data storage, fiber optics - just about anything. One Enron executive told The New York Times that the company's achievement was to create "a regulatory black hole" to suit its "core management philosophy, which was to be the first mover into a market and to make money in the initial chaos and lack of transparency."
Enron started as a gas pipeline company that went into trading natural gas, and even then the company's critics claimed that Enron was making profits by stoking volatility in gas prices. The same charge showed up again in spades with the newly deregulated electricity markets. Enron had lobbied for utility deregulation relentlessly, formidably and very expensively at both the state and national levels.
The company seemed to spend more time influencing government than doing business. Like Long Term Capital Management, the hedge fund that went awry, it seemed to have only a parasitic relationship to actual economic activity. The problem with deregulating utilities is the reason that they were regulated in the first place: Monopoly power and the threat of market manipulation are a set-up for unholy price-gouging. How many times do we have to relearn that lesson?
Just a few spiffy eye-openers on Enron's connections:
Molly Ivins writes for Creators Syndicate. 5777 W. Century Blvd., Suite 700, Los Angeles, CA 90045
You presume that Miss Molly has an abiding interest in being correct.
You would be wrong.
Miss Molly has an abiding interest only in being clever. And in bashing conservatives while she's being "clever".
Like Maureen Dowd, it makes for thin gruel...
Ah yes, good old AA. My roommate worked for them. They were as 'creative' as possible in everything they did, and were quite smug about it to boot. Good at shystering too, the State of Iowa paid them a 6 or 7 digit figure for them to do a study on why Iowa can't attract companies. AA of course was supposed to be the analytical wunderkind that would find the secret key to the Golden Kingdom. Their brilliant answer, which everybody had been telling the State for years, was that our tax structure is oppressive and makes the cost of doing business to high. AA milked 'em good on that one.
Enron stock started to fall when it was announced that the SEC was investigating Enron. It is likely that their stock would be doing very well, with a Dynegy purchase still on the table, if it had not been for the investigation.
The SEC did not conduct this investigation while Clinton was in office. Perhaps this is because there was no hint of the wrongdoing to cause an investigation to start. It is also possible that there was no investigation because Enron had been pouring money into the Clinton White House. He has a reputation for making sure contributors aren't investigated. President Bush has no such reputation.