Alex Gibney, the filmmaker summarizes the underlying lesson well in his commentary in the extras of the DVD: “I think the story of Enron exposes the major flaw in capitalism, which is the crude belief that raw self-interest left untethered will always result in the best possible social good. It’s not so.” Instead it results in the enrichment of the few and the raping of the rest of us. Why are we letting this happen? Are we so determined to become the few that we overlook reality? Are we so blinded by the money we’ll never make but think we could that we can’t see that there has to be a better way? A way that allows everybody a decent way of living rather than the obscene splendor of the few? The documentary contains a clip of Ken Lay talking to reporters bemoaning the fact that his net worth shrank from $100 million to a mere $20 million after the Enron collapse (this is at least in the bonus material of the DVD). And that’s after setting aside funds for anticipated legal defense cost and settlement. $20 million is far more than most people make in a lifetime. Nobody called Lay on that. How can he get away with feeling sorry for himself?
Somehow this all reminds me of a Yiddish joke that I listened to often as a teenager. A man comes to a rabbi complaining that his friend doesn’t talk to him anymore ever since he’s made a bit more money. The rabbi asks the man to look out the window. “What do you see?” he inquires. The man describes the scene he sees: People hurrying along on their business; kids playing; a couple of friends playing cards; an old woman watching over a baby. The rabbi asks the man to turn to look into the mirror. “What do you see?” he asks. The man laughs and says “I see myself.” “You see,” explains the rabbi, “when you put a little bit of silver underneath, all you can see is yourself.”
Have we gotten so caught up in the earn-and-spend cycle that we don’t see the masses of homeless? Or feel the moral outrage of even having homeless people in a country as rich as the US? Then there are the people – including children – without health insurance and on and on. And yet, the top keeps on enriching themselves and we, the masses, wonder when the next sale is. How have we become so numb to moral dilemmas? How did we become too complacent to be outraged long enough to actually change something?
Hi,
You’re lying about Ken Lay. There is no such clip anywhere in that movie and Ken Lay never said anything like that. It’s possible you misunderstood something but Ken Lay never “complained” that his net worth went from $100 million to $20 million.
I love the yiddish joke!
I’m currently reading “Predictably Irrational” by Dan Ariely, behavioral economics, basically an awful lot like social psychology but around money and markets and all. It provides a lot of well-researched insight into how things actually work as opposed to the whole free-market rational self-interest myth.
Cara: Before accusing me of lying, which is quite a serious accusation, you might want to re-watch the DVD’s extras. It’s in there. He said this during a press conference at a Double Tree Hotel. Oh, and look at this, it was even reported at USA Today:
I suppose expecting an apology from you would be asking for too much…
And why does it matter to you anyways? I guess this says it all: “Cara Ellison knows what’s what. She suffers no fools – at all. She loves a good re-direct. She’s Conservative, a bit of an Objectivist, and a total Capitalist. For good measure, she will say it again: there was no fraud or conspiracy at Enron.”
You wrote:
The documentary contains a clip of Ken Lay talking to reporters bemoaning the fact that his net worth shrank from $100 million to a mere $20 million after the Enron collapse.
You didn’t say it was in the bonus section. And you’re badly lying about what he said. I am watching it now and he says, “Linda and I and our family saw our net worth reduced from a hundred million to … less than $20 million … we have less than one million in liquidity.
You did not mention the fact that he was really saying he had less than a million and you misrepresent the point of his comments: he too lost money. If he were guilty, don’t you think he would have been smart enough to pull his money out of the company?
He was trying to say that EVERYONE lost money. He was not, as you state, “bemoaning the fact that his his net worth shrank from $100 million to a mere $20 million after the Enron collapse.”
Also, the NYT added the $400 million figure (who knows where). Plus it’s funny you mention the NYT since they were part of the problem, fanning irrational anger toward a company that experienced a liquidity crisis – not corruption.
Cara: Thank you for the quote. It clearly shows that he said that his net worth shrunk from 100 million to less than $20 million, which is exactly what I wrote. I did not refer to liquidity – liquidity and net worth are two different things. He can very well have $20 million with $19 mill tied up in a house or something. Furthermore, even $1 million is more than many people make in a lifetime, so my point still stands.
So, your quote proves that I was not lying about what he said. In fact, you confirmed it. I will make my write up clearer that this is contained in the bonus material (although I believe it’s also in the many part). But that fact is irrelevant because you were claiming that Lay never said this. He did. Your quote confirms that.
I am not using this statement to say anything about Lay’s guilt or lack thereof. In fact, my whole post does not deal with his guilt or not. My post deals with our complacency to folks like Lay who are enriching themselves using methods that are at least ethically questionable and possibly also legally questionable.
And regarding your claim, Cara, that the company was facing a “liquidity crisis,” the jury found Jeff Skilling guilty. A conviction, which was upheld by the United States Court of Appeals for the Fifth Circuit. But I am sure that was due to “activist judges” or people “lying” the way I did…
It seems like whether he lost money or not has no bearing on his guilt.
It’s certainly possible to act unethically and still be buying your own snake oil.
Yes, he was found guilty. There were factual and legal issues with those shameful convictions, however, and that is why he is taking his case to the Supreme Court.
But since you brought up the legal system, the DOJ has an abysmal record in the Enron cases. Absolutely appalling, in fact. Care to hazard any guess as to why?
Because the NYT paid the DOJ?
That doesn’t make sense. No, it’s an abysmal record because the cases fall apart. The DOJ has gotten a whopping 2 jury convictions out of 33 indictments. Not a stellar record.
There was no fraud or conspiracy at Enron.
It makes just about as much sense as your accusation that I am lying, which you dropped to quietly when your own quote showed that I wasn’t…
People can review the DVD, your blog (I presume to get the opposing view), the legal case, or whatever other resources they want to and then decide whether there was fraud or conspiracy or both at Enron. It is very difficult to get a fraud conviction, so the DOJ record doesn’t surprise me. What the DVD showed was that what went on at Enron was morally highly questionable.
Since you obviously have an axe to grind and your comments have nothing to do with the point I was trying to make in my post, I am going to disengage from this discussion.
Are we so determined to become the few that we overlook reality? Are we so blinded by the money we’ll never make but think we could that we can’t see that there has to be a better way?
Tragically, I think the answer is yes. There was a study not long ago–wish I could remember who was responsible for it–that purportedly showed that people who support eliminating the estate tax do so because they assume it will someday apply to them even though, statistically, most people are unlikely to amass that much wealth. We live in a land where people have bought two major lies. One is that the rich deserve to be rich and the poor deserve to be poor, and the other is that any poor person who works hard enough can get rich. Therefore, many people see it as both morally wrong to impede anyone’s accumulation of personal wealth and disadvantageous to themselves because they believe they have a much greater chance of becoming wealthy than they actually do.
I think a sea change is coming, but slowly. Because people tend to be self-seeking, it starts with repeated in-your-face reminders that they don’t have a chance in hell of becoming the next Donald Trump. It’s supported by continuous references to the atrocities committed by men like Ken Lay. People are apathetic, but after awhile, apathy turns to outrage, and that’s when something gets done.
I hope you’re right, Elsie, that our apathy will eventually turn to sustained outrage that will lead to change. We’ve seen some outrage over the bonuses paid at AIG but that was short-lived, singled out individuals rather than critiquing the system. But, as you said, there are signs of hope – from an increased savings rate to more clothes swaps.
Cara Ellison refuses to post my comments. In fact, she controls and highlights what is displayed on her precious little blog. Below is my recent attempt to post which has been filtered. She is a coward and an intellectual midget.
I will be surprised if this actually gets posted, but I might as well give it a shot. In fact, I would like to have it posted so those that know more about Enron can enlighten me as to my erroneous thought process. I have watched “The Smartest Guys in the Room” a few times. I did not work at Enron so I certainly don’t have inside knowledge. But quite honestly, it blows my mind that there is a website devoted to promoting Enron and defending some of those found guilty of white collar crimes. The founder of this blog is clearly a capable person and I am not writing this to insult her, but I am afraid she and many other Enron supporters are misdirected or lacking bigger picture intelligence. And perhaps that is why the documentary was not entitled “The Most Intelligent Guys in the Room”. Smart people are good at facts and figures and thinking quickly on the draw, but they fall short of comprehending the big picture. I am certainly not smart, but I do think I possess a fair degree of intelligence or at least enough intelligence to conclude that Enron leadership and participating parties in the scam like investment banks, auditors, the media, and the government, displayed a less than positive example of what the human being can achieve.
Ayn Rand wrote some great works and I think some of you Enron supporters align yourselves with her philosophy, but she is amiss on some large and significant points. Although I agree with many facets of her philosophy, it is the focus on pure individualism where I take exception. Man, in and by himself, is not nearly as powerful or potent as men working towards great progress and evolution into something greater. This is not to say that a man in and by himself can’t create incredible works of art or value in and by himself. A man like Beethoven comes to mind in this example. But, Beethoven’s music searches for something greater. His ninth Symphony inspires not only individuals to reach for more, but for a culture to reach for more. I am talking about Greece, Rome, and the Italian Renaissance. Perhaps I am also talking about advances in knowledge – science, astronomy, geology, medicine, architecture, aeronautics etc…. These types of achievements are what mark greatness and positive human evolution. These types of achievements require not merely individual genius, but also cooperation, vision, and motivation inspiring a culture and the population to get behind the idea. Enron and the Enron leadership can’t even be mentioned in the same sentence with this concept.
Enron leadership, specifically Lay and Skilling, reveal a lower use of human smartness and a suppression of intelligence and greater vision. In fact, economics and wealth creation, are in my opinion, merely a base upon which greatness can be built. Lay and Skilling may have been smart individuals and able to motivate the masses to enact their “vision”, but there was nothing great in the endeavor and certainly the final results ended in failure, regardless of whether a crime was committed or not. Enron was a failure, and thus the leadership failed. There is no other way to spin this without making excuses. The company went bankrupt and every person involved with company lost their job. Enron is extinct.
My key point is that economics, profit and loss, and individual wealth creation in and of itself is nothing of importance when considering great human beings or culture. Indeed, a healthy and strong economy and wealth creation has been a key ingredient in every past great culture and civilization, but the economy and individual wealth is not the fruits of those great cultures, it was the art, architecture, music, literature, and advances in knowledge. What fruit did lay or Skilling provide. What fruit has grown from their type of mentality that has spread like a virus throughout the American culture? These guys are leaders or visionaries, they are, in fact, smart well educated and politically connect traitors. They used their education and position to make millions for themselves and their pals while creating absolutely nothing of value. In fact, I would go so far as to say they took resources away from potentially more promising avenues to pursue their individual gain. Lay and Skilling remind me of Jabba the Hut.
Man and Woman, the human being, is capable of reaching great heights and there are many example from the past and present to illustrate our potential. But as long as we focus on economics, the “American Dream”, and individualism without a greater vision, we will fall way short of our potential greatness. Lay and Skilling could have been put to much better use, but they chose another direction. Look at it through the eyes of a child. A child sees the whole world before them with limitless opportunities. Would you teach these children about Lay and Skilling and their achievements, or would you put on some Beethoven and tell them to listen carefully and imagine what could be?