Democratic Underground

The Daily Whopper
Remember the Enron
December 4, 2001
by Jeremiah Bourque

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The new Alamo.

The greatest monument to tall, white, Christian, right-wing, rich, Texan, male arrogance of them all.

Enron.

Gone.

No one could have seen this coming.

No one could have possibly forseen the degree to which Enron was hiding financial information from investors.

No one could have believed that Enron could have fallen so quickly.

Oh yeah. Sure.

Let's get one thing clear: Enron was a disaster waiting to happen that was easily forseen many months ago when word came out that Enron was a company using its energy business as financial leverage to dominate speculative markets. In other words, it was a public corporation set up to be a hedge fund.

Now, hedge funds, themselves, have special rules that they must operate under, including a very strict, up-front dictation to shareholders of the risk that they may be forced to bear. Enron did nothing of the kind. Enron said "Trust Us," but hid why anyone should, leaving only their inflated profit figures as proof that they could beat the system, skirt the law, and utilize political influence and corruption to their clear advantage, as they have done so often before, in California and elsewhere.

Obviously, setting up a public corp as a hedge fund is absolutely begging for disaster. The deeper a non-hedge fund gets into the business of hedge funds, in this case, into the commodities business, the more exposed it becomes to losses that threaten the legitimate business on which the hedging is based.

Is this somehow odd? Is this some sort of fundamental lack of understanding? Did the financial media just not understand the meaning of the danger of this behavior?

Nah. They just didn't care.

Let's keep some things in mind here. Each and every audit had Arthur Anderseen chartered accountants signing off on Enron's books. All of Enron's public reporting had to be overseen by accountants who have to put their signature and what is essentially a sworn oath that these documents were prepared correctly and provide a correct picture of Enron's financial status. If even the best Wall Street professionals couldn't cut through the fog, how could these accountants do so? Far more plausible that they were as confused as anyone else, and decided that it was not worth caring about. Enron, they must have decided, was just too good, too profitable, too lucrative... why raise a fuss and ruin a good thing? There was a lot of money involved.

That, in fact, is the point. There was a lot of money involved, including for the board of directors, including the directors who sat on the audit board. The same individuals who decried public oversight ended up simply buying off those charged with private oversight. When even the board is party to the hedging and the squandering of other people's money, there is no oversight whatsoever. That's precisely what Enron's CEO's always wanted. That's precisely what no private corporation should ever allow.

The gory details are here.

Enron was more than a company. It was a symbol. Enron was part and parcel of the Mark Rich school of business: Pry yourself into the middle of transactions that ought not require you and add a layer of expense. The paradox of this is that if Enron did its job properly, Enron would drive itself out of business, due to the rise in the efficiency of the market. Only the INefficiency of the marketplace kept Enron rich.

Besides this, Enron made a mistake, the mistake that is made by all who rely on penis-size politics and business theory: the belief that everything that had risen to the sky, would continue to rise amid the crumbling all around. Put more plainly, Enron had a net long position in a falling market and didn't stop gambling.

Enron was the pentultimate symbol of American success. When President Bush (the Younger) spoke of institutions of democracy, he meant Enron. When Cheney spoke of American success stories, he meant Enron. When all of these men spoke of the needy, the truly needy of American society, they meant Enron. When Republicans spoke of the deserving, they meant Enron. They meant Enron and often cited Enron by name, and most certainly were thinking of Enron as they said these things. Enron was success. Enron was good. Enron was just.

Now Enron... is dust.

The dust, formerly known as Enron, was an illusion, but a useful illusion: the illusion that if Hillary can make $100,000 on the commodities markets, then Enron can make billions. This fundamental arrogance was fueled by their belief that raping government and pillaging the public purse through any means possible (directly or indirectly) was not only just, but a moral imperative. In effect, the dust, formerly known as Enron, felt that it had a God-given duty to manipulate markets and take advantage of the law and the public.

Enron, the new religion of the greedy, the pentultimate combination of Christian piety with the glorification of materialism, is the new Alamo, not merely a religion, but a representation of a way of life. An era has ended.

Though this is not the end of penis-size politics and the arrogance of the rich Texan male, a type of human being that considers himself superior to all other forms of life (and that this is self-evident requiring no proof beyond their own swagger), it is a significant blow to the prestige enjoyed by this class of human beings. Like the ex Prime Minister of the United Kingdom, the embattled conservative leader John Major, who now heads the Carlyle Group (a piece of information you may find interesting), Texan males in position of influence and power now stand to be knocked down a notch, to be somewhat laughed at, even pitied, for their inability to recognize that the light at the end of the tunnel is sometimes a locomotive.

In this world, there are more important things than proving who the "better man" is. Women are not just cheerleaders for Texas A&M or trophy wives. Outrage over the murder of Israelis and not even a crocodile tear over the death of many more Afghans - and I mean innocent civilians here - at the hands of Americans and their allies, just goes to show how outrage, indeed, how morality and religion, is very selective to this brand of right-wing Christian male arrogance, in a manner that can be turned on and off like a switch.

I foresaw the fall of Enron, based on a simple and firm grasp of economic fundamentals. It really ought not have been as hard as people are making it out to be to cover their butts after the fact. Enron was not Icarus; it was a thief, hiding its theft by making public the proceeds while concealing the means. This was obvious to anyone who cared to look closely at the situation. How many people actually did this? It seems that very few did.

Many apologists will now claim that Enron was a noble endeavour, but those who do so, betray themselves: there is no nobility in lying to your own shareholders; only greed, arrogance, and stupidity.

This is my eulogy.

Let us Remember the Enron.

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