You-all celebrate your anniversaries with candy and flowers and jewelry if you like — when you’ve been stuck inside by parenthood as long as I have, plain old dinner and a movie suits me fine. The dinner: Higher-end Italian; I had the veal. The movie: Enron: The Smartest Guys in the Room. You are commanded to see it.
I love a well-made documentary, and this is one of them. It’s almost madly entertaining, at the same time it reminds you how things like this happen — how people look the other way, ignore their guts, get out their rose-colored glasses and then, oops, it’s too late.
You know, I’m stupid about high-level business; past the shopkeeper level of accounting, I don’t understand. But it’s disturbing to learn the SEC doesn’t necessarily understand either, which is the only possible explanation for how Enron was able to practice its so-called “mark-to-market” accounting, which was the foundation for the whole fraud. The movie reminds us, however, that there was no one reason. Neither greed alone, nor deception alone, nor wishful thinking alone, nor a million others can explain how Enron came to be, and collapsed in such a spectacular cloud of cash.
Of course, all of those reasons are why the movie is such a gas to watch. It’s all there — the business-press blowjobbery, the corporate-culture team-building exercises, the get-with-the-program jettisoning of anyone who dared to ask the simple question: Just how does this company make money, anyway?
Answer: The old-fashioned way. They stole it. Aided and abetted by Wall Street, their own employees and a culture that said anything is permissible in the pursuit of profit, that is.
It’s been hard to stop thinking about this movie, because it was the first exciting journalism I’ve experienced in a while. Yes, I said exciting. Somewhere along the line we forgot the news can be not only informative but entertaining.
And that, friends, was the highlight of the weekend. Sometimes, in a marriage, no news is good news.
Oh no, wait — I did upgrade to Tiger today. Bombard me with widget suggestions.
mary said on May 15, 2005 at 9:14 pm
One of the reasons, among many, that my ex is my ex is because his idea of celebrating an anniversary was to bring me the centerpiece from whatever business banquet or luncheon he went to around the time of our anniversary. That jerk never gave me anything but second hand rubber chicken dinner centerpieces for nearly 20 years. I wasn’t looking for jewelry or anything like that. The dinner and a movie you had was exactly what would have thrilled me, but alas it never happened. A year after we split up, I “won” the centerpiece at my office Christmas party. I sent it to him for Christmas.
Nance said on May 15, 2005 at 9:58 pm
I also got one of these, quite a lovely one. It’s been a good marriage so far. Hope it stays that way.
ashley said on May 16, 2005 at 5:00 am
One of my PhD students works for Goldman Sachs, and he tells me amazing stories of life in a place where nothing is held in higher esteem than pure, undiluted, laissez-faire capitalism.
Enron (and to a large degree, Andersen) are results of this globalized capitalism end-game, where value to shareholder is the raison d’etre.
Not employees, not sustainable business, not client well-being, and certainly not responsibility to the community. Nothing but shareholder value, everything else be damned.
The ironic thing is that most Americans are in favor of this business model. With the erosion of unions, the dissolution of company (e.g., Ford and GM) pension plans, we no longer have anything resembling an environment where there is company loyalty to an employee, and vice-versa. Yet, since the union tradition has eroded, we are valuing business models like Wal-mart, where CEOs get multi-million dollar bonuses anually, and the typical worker gets just enough to be above the federal standard poverty line for a family four.
Oh, and they don’t get health insurance, either. Unlike in every other civilized country.
I mean, I understand how many believed that unions were bad, and how GM and Ford could not compete in a global marketplace while paying $40 an hour for a welder, but at least, back then we had a visible middle class. That’s going away.
Enron just moved all this to the next logical step, and investors were riding the wave of uberprofits and trying to cash in.
The smartest guys in the room, indeed.
James said on May 16, 2005 at 7:18 am
You have to pick up my widget.
Possible the most useful ones out there…
Nance said on May 16, 2005 at 7:38 am
Actually, Ash, that’s one point the movie made over and over — that Enron executives made money-making the No. 1 value of the company, not just for shareholders (where it’s at least defensible), but for executives, too. Several people commented that the top people simply couldn’t believe — had no room for it in their heads — that a person could be motivated by anything other than money, profit and winning, and led the company accordingly.
The film’s climax comes as we see the very human price of the Enron-engineered California blackouts, while recordings of gloating Enron traders played as soundtrack. The person with the most reasonable reaction turns out to be the outraged prankster who throws a pie at Jeffrey Skilling during a public hearing.
Michael G said on May 16, 2005 at 8:45 am
I disagree, Ashley. In each of these corporate debacles the shareholders have gotten hosed as badly as anyone. Don’t confuse a concern for short term share prices with concern for shareholders. Remember, the guys at Enron bailed on their shares while telling investors that all was peachy keen and at the same time preventing lesser employees from selling. No, the concern was solely for the welfare of the few folks in the clique.
blue girl said on May 16, 2005 at 9:41 am
A couple of interesting tidbits I picked up at:
1) The ratio of CEO pay to average worker pay reached 301-to-1 in 2003. The average worker takes home $517 a week, while the average CEO earns $155,769 weekly, according to BusinessWeek. In 1982, the ratio was 42-to-1.
2) Dialogue between President Bush and a citizen during a February meeting in Nebraska, where he was pitching his Social Security plan:
Woman: “That’s good, because I work three jobs and I feel like I contribute.”
Bush: “You work three jobs?”
Woman: “Three jobs, yes.”
Bush: “Uniquely American, isn’t it? I mean, that is fantastic that you’re doing that. (Applause.) Get any sleep? (Laughter.)”
Thanks for the tip on the documentary. I’m going to get it tonight!
ashley said on May 16, 2005 at 11:28 am
BTW, last night was my 6th anniversary. On the menu: celebrating the Czechs winning the world hockey championships with the unwashed masses in Prague’s Old Town Square. Think: Mardi Gras with glass.
Next: La Bodeguita del Medio, the Cuban bar chain, for mojitos, salmon, tuna, shrimp, and mussels.
Next: getting 2 lines on the home pregnancy test. Yes, I’m going to have 3 rugrats soon.
Tonight: a sushi restaurant in Prague (!), since my wife is pretending that the results aren’t valid until tomorrow.
Last year, it was a Tiffany bracelet, but this year, it’s der uberstroller.
4dbirds said on May 16, 2005 at 11:52 am
Congrats Ashley! Here’s to a hat trick of girls.
mary said on May 16, 2005 at 12:29 pm
Nice pottery! What piece did you get? Sure beats a green styrofoam block full of carnations and baby’s breath.
Richard N. / Toronto said on May 22, 2005 at 10:00 am
Back to Enron … one of the most interesting things about the Enron criminal disaster was how it was, in the words of these days, enabled by its eventual victims. As the writers of the book the documentary is based on said, the share price of Enron had been floating downwards for some time – its financials, in fact, revealed with moderate analysis that it was floating on air.
But people didn’t want to believe it. The business press was full of articles on how Enron had somehow magically discovered a new form of capitalism. My favourite Enron story is about the Enron executive suing for fraud – but she herself had been part of the scam, taking people through the Potemkin trading room. She knew it was fake, but bought shares anyway.
All the best from the country that knows to have its spring long weekend ahead of yours. 🙂