Friday, May 26, 2006

The President from Enron

Ken Lay and Jeffrey Skilling were convicted on Thursday. It's good to see the guys at the top of Enron held responsible, but I'd like to see it go farther than that. Doesn't anyone else remember that Bush was elected as the President from Enron? His whole support base -- his real support base -- was big business, particularly the energy companies. That's why tax cuts are the only real Bush policy initiative.

Enron was an extreme example of corporate crime -- they didn't just fudge the books here and there. But they represent the tip of an iceberg of fancy accounting tricks throughout the corporate world. Over the past five years the business pages have reported a steady stream of "restated earnings" that indicate just how many companies were manipulating their balance sheets to play the stock market and make the rich richer.

Enron and the related scandals should have come back to haunt Bush. Maybe they would have if it hadn't been for September 11 and the resulting unnecessary war in Iraq. The craziest thing about it is that Bush is still carrying water for big business, still cutting their taxes while increasing government spending at an enormous rate to pay for his preemptive war.

The crimes committed by the Enron players are complicated. Basically they involve deceiving people about how well the company is doing to get them to invest more money, but it's complicated. That's why it involved big accounting and law firms; that's why it took so long to bring a criminal case.

Here's the image that sticks in my head, that helps me to understand the human component of all this: Enron went around buying up small utility companies, many of which had been steadily profitable (though not high fliers) for years. Employees of those companies owned stock in them as part of their retirement fund. The other stockholders were generally people who make conservative investments -- the kind that don't make you rich quick, but that protect your money over time. When Enron bought those companies, those folks got Enron stock in exchange. And then Enron collapsed, taking those people -- who had nothing to do with the accounting games -- down with them.

Okay, I'm going off to think about science fiction and the big picture. I just couldn't help saying something about the Enron convictions.

1 comment:

Michael Caddell said...

Integral contact within Cheney's secret big energy task force, huge international despoiler of native villages and natural resources, responsible for 400% electric rate increases in California and the Northwest, the list goes on and on.

And the reporters; Reagan speechwriter and drippy conservative sentimentalist, Peggy Noonan - forgot how many hours after 100 at $250 per - for Kenny Boy speeches. Andrew Sullivan, in a confessional listed them at his blog.

It's just so complicated.
Like science fiction.
Check out where I and others dig, dig and dig.