Villains vs. Victims at Enron - The American Spectator | USA News and Politics
Villains vs. Victims at Enron

Shame and Retribution Among the Enron Crowd
Gordon Gekko said, “a fool and his money are lucky to get together in the first place.” Enron investors — even (and especially) its employees — have to take some responsibility for their plight, even if it doesn’t balance the massive sympathy show in Washington.

If you were minding some stretch of pipeline for 20 years and nothing ever changed, yet somehow your company’s stock suddenly rose sevenfold, you shouldn’t assume that the laws of common sense have changed. Stocks rise for a reason and if you can’t figure out the reason — there were plenty of warning signs in Enron’s financial statements, plus massive insider selling — it can all be reversed. If you want to live in a fool’s paradise, remember that they offer only short-term leases. Maybe some investors will finally start reading all those documents the Securities and Exchange Commission makes corporations file.

I think we can call these people complainers and whiners, at the same time as we let them sue the bejezus out of everyone in sight. We need heavily regulated capital markets protecting investors, not because we feel sorry for them but because we need to protect those markets. The American capitalist system depends on easy capital formation, and our system is phenomenal. Thirty million households invest their money in the public markets, trusting their futures to people they never met, investing in businesses they may never see, and allowing their investment money to be used in ways they are not entitled to question.

They won’t do this, and the whole system will crumble, if the suckers discover it’s a rigged game. This is no exaggeration. It took nearly two decades, a World War, and the securities laws we have today to bring people back after the crookedness that preceded the Crash of 1929. Even in the last two years, the market for new issues has dried up, and numerous legitimate companies couldn’t get public capital. The Internet boom and bust exposed too much dirty business.

Using the laws we have to punish the wrongdoers and make them pay should be a high priority. Changing the 401(k) system, however, would be a drastic mistake. The system has worked very well for nearly thirty years. The trite joke back then was that senior citizens had to eat dog food to survive. Now, it’s that they want to have sex all the time. The perception has changed because 401(k) investing has made a gigantic difference in the lives of millions of retired Americans. Furthermore, the system has encouraged employee loyalty and ownership. Capping corporate stock would not only reverse that, but most companies would stop matching 401(k) contributions if they had to use cash instead of stock. Let us instead encourage people to be smart investors, diversifying and understanding their investments.

As an investor, you have the right to hope for the best, but if you are gambling with your future and your family’s future, you have to expect the worst.

Goofus and Gallant on Capitol Hill
Unlike trying marijuana or hiring a housekeeper without checking her citizenship papers — perfectly ridiculous one-question litmus tests of political character — it was never illegal to accept political contributions from Enron. In addition, influence buying is now bipartisan. Only 30 of 248 members of the 11 committees investigating Enron didn’t get contributions from Enron or Arthur Andersen.

An opposite test may be more appropriate: Why listen to a politician Enron didn’t think was influential enough to buy? I’d be insulted if I was a legislator and Enron didn’t think enough of me to give me money. Maybe some of those rare animals are just getting their revenge.

The business I don’t understand is the legislators giving their old Enron contributions — as if they kept the money in a separate valise– to an Enron workers’ fund. Doesn’t this admit that the purpose of the money was to buy influence? Shouldn’t they also give back any Microsoft money (keeping enough to account for the partial reversal of the trial outcome)? Is there a statute of limitations on how long after accepting money it becomes tainted? What if a contributor is caught driving drunk or cheating on his spouse, do you give back the money to demonstrate your character? And isn’t this like trying to regain your virginity, and just about as successful?

I think they should be proud they took the money. They deprived Enron and its executives of the resources for doing more evil. That’s why I’m writing for TAP. I used to be a plaintiff’s class-action lawyer, about as big an enemy of conservative causes as exists. I have friends infamous for their chumminess with the Clintons. But by draining the coffers of The American Alternative Foundation — so far, they are paying me in free copies from their rented Xerox 2600 color copier, but I’ll break them yet — I’m practically working as a double-agent for the trial-lawyers’ junta.

Michael Craig is a writer in Scottsdale, Arizona.

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