Enron fall shows sorry state of politics
When Enron Corp. hurtles downward like the giant from Jacks beanstalk, dragging millions of people with it, Treasury Secretary Paul ONeill remarks, Its capitalism as usual. Muted hurrahs.
But it is more. It is capitalism as usual linking arms with politics as usual. And its a sorry, disturbing and ultimately shameful sight.
Enron provides the latest commentary on an American corporate-political complex that is morally unsound and ethically debased. In a word, corrupt.
Economically, this is a continuing part of the meltdown of Americas recent gilded age when money was everything.
Politically, this is America as a Third World shambles: Enron and its auditors and their political pals are a study in corruption. The only thing that distinguishes this morass from a Third World dictatorship is that these American activities are not illegal (at least as far as we yet know).
The debacle is also a reminder that many U.S. government regulatory agencies -- from the Securities and Exchange Commission to the Federal Drug Administration -- and their regulations came into being in response to scandal and corruption.
Think of Enron Corp. as a market stall. It sold what it did not sow or reap. Its table was filled with baskets of energy it had bought elsewhere and stockpiled at a time when such practices contributed to forcing up prices.
Then came the collapse. People no longer needed to pay those prices. Meanwhile, Enron had sold shares in the stall to millions of people based on its own -- and Anderson accountants -- valuation of the stall, the stockpile and the potential market. Enron had also, when business was good, shoved fistfuls of money into the pockets of eagerly accepting politicians, not least those of Presidents George W. Bush and Bill Clinton.
The object lessons and fallout of Enrons downward hurtle are worth pondering:
If anything spells the end of the Republican goal to privatize Social Security, its probably Enron. Horrified Americans, hearing how Enron officials unloaded their stocks while urging their employees to hold on into poverty, wonder if they can trust their employers. They know if their employers, like Enron, fail them, and theres no Social Security, theres nothing. Anxiety in the corporate world is evident. The National Association of Manufacturers immediately constituted a special task force to deal with a likely backlash on stock ownership issues, and the fear of government regulation of how corporations run their employee stock ownership programs.
When, one wonders, did it become such a scandal to be a CPA? The big accounting firms and the numbers they sign their names to used to mean something. Thats less and less true today. And in recent times Anderson hasnt been the only one. Andersons activities, however, were conflicts of interest mounted on conflicts of interest. Meanwhile, watch for the big accounting firms to pump extra millions to the political bagmen to ward off further regulation of their industry in the post-Enron shakedown.
No one is charging that contributions from the Enron corporate suite to Bush or Clinton led to an immediate quid pro quo, or that this was anything but politics as usual. The scandal is precisely that: that this is U.S. politics.
Nor are Enrons White House and Congressional attachments anything that campaign finance reform, as presently envisioned, would prevent. To prevent corporations from buying politicians, the entire election funding system would have to be rethought.
Now questions loom. Why is our system so corrupt? And how did Enron get away with its fabrications right up to the end? The answers are two strings of the same bow.
If political ethics ever meant anything (and even in Honest Abe Lincolns time votes and money had a symbiotic relationship), the difference today is in the sheer amount of money needed to get elected. Money buys access. No money, no access; no access, no victory.
The power of money, the glitz it throws off when Enron or the dot.coms are churning billions, dazzles people, especially politicians. It dazzles until another bubble bursts and everyone once more sees there was nothing inside.
The long-term consequences of Enron are extremely serious.
Fat and happy still, unprepared by good civics lessons, blinded by patriotism -- particularly now -- and by a less-than-critical belief in the American system, one wonders what it would take for the average American citizen to truly realize that he and she have been disenfranchised by corporate America and the lobby system.
For sure, it would take nothing short of a sustained citizen revolution to clean up politics. And one wonders if todays Americans, aware they had been disenfranchised, would have the appetite and staying power to see that revolution through to its end. Or even begin it.
National Catholic Reporter, January 25, 2002