The Fall of Enron

by Jim Hightower

And why not? He had taken a Texas natural gas firm and turned it into mighty Enron, the biggest energy corporation in the world, drawing more than $100 billion a year in gross income. Not that Enron produced any energy. No, no, that was old thinking, and Ken Lay bragged that he was all about "new economy" thinking. Basically, he ran a computerized roulette wheel, buying and selling energy supplies that others produced. He asserted that it's the trade that matters, not the product...and he even intended to begin trading in such "commodities" as water and weather.

Lay's face was on magazine covers, he bought the right to slap Enron's name on Houston's taxpayer-financed baseball stadium, and he was George W's top funder -- not only in his gubernatorial and presidential runs, but also financing Bush's Florida recount and inauguration. In return, Ken headed the energy transition team when Bush took the White House, and he was poised to be a major player in George's administration.

But ... stuff happens. Some of the new ventures that Lay launched with Enron ended up in the ditch, the company's stock price went into a dive ... and then there's the little matter of the scandal. It's uncertain exactly what shenanigans were being played, but Enron suddenly had to "readjust" its earnings report recently because of more than a billion dollars in losses from investments by secret partnerships run by company executives -- losses they had kept off the books. Now the SEC is investigating, investors are crying foul, and the company is being sold at a fire sale price.

Some of the strutting peacocks of the "new economy" ... are ending up as feather-dusters.