Should Companies Like Enron Exist At All? : LUSENET : Exposing Rightwing Corruption : One Thread

Enron, Should Companies Like Enron Exist At All?

I'm tired of hearing about Enron. Those of us who never liked the big stinking corporations that donated big stinking piles of cash to the big stinking Republican Party are really being rubbed raw by the continuing revelations. We all know that Enron and its subsidiary in Congress stink. (And, just for the record, I'm talking about a few Democrats and a lot of Republicans.) We all know the exact type and flavor of slime that the key players ooze. Instead of restating all of the usual problems with Enron, I'd like to take a giant step back and discuss, corporate sleaze aside, whether America really needs a company like Enron in the first place.

A funny thing happened the day that Enron filed for bankruptcy. I flipped a light switch and the light came on. Isn't it interesting that the nation's seventh biggest corporation and single biggest energy player can die without affecting anybody's electricity service? This should give us pause to wonder what it was that Enron did in the first place. Originally a natural gas pipeline concern, Enron had its beginnings in actually providing a useful service: They transported natural gas. Apparently, doing a day's work for a day's pay wasn't satisfactory to Ken Lay and Company. They decided that they could make big bucks in energy futures without having to work. All they needed to do was change a few federal and state laws, and they could begin buying and selling energy all over the nation. Here's a rough synopsis of how this was accomplished: Enron purchased the services of a bunch of lawmakers to deregulate the energy market. Suddenly, energy could begin flowing freely across state lines. Power producers were approached by Enron and told essentially the following:

You are in trouble. The electricity industry has been deregulated. Your current customers can now purchase power cheaper from another state. Tell you what. Sell your power to us, and we'll give you a guaranteed (read: unfairly low) price over a period of time.

They could then approach the consumers and tell them this:

You are in trouble. The electricity industry has been deregulated. The power company that used to sell to you can now make more money selling to another state. Tell you what. Buy your power from us, and we'll give you a guaranteed (read: unfairly high) price over a period of time.

How ironic. Enron gets lawmakers to take a stable, if inefficient, electricity market and render it unstable by deregulating it. Then Enron uses the very instability it created to force power producers and consumers to deal with it instead of dealing directly with each other. In this manner, Enron became the energy industry's biggest middle-man. By dealing in energy futures, Enron was neither producing nor consuming electricity. They were inserting themselves in the middle of a transaction and keeping a nice profit. Energy producers are making less, energy consumers are paying more (Can I have an "Amen," California?), and Enron laughs all the way to the bank. This interference with energy transactions accounted for href=""> color="#800000" size="3" face="Arial Black">90% of Enron's earnings in 2000. There was even a faction at Enron that wanted to dump all of Enron's "hard assets" (the parts of Enron that actually did something useful, like produce electricity or transport natural gas) and concentrate entirely on its "middle-man" business.

Corruption aside, I think we Americans need to decide whether we want to allow this sort of "business" to operate in our country. We need national policy that promotes companies that add something to the economy, rather than take something away. Republicans have promoted the virtue of hard work to the idle poor. We need to promote it to our nation's corporations as well. My advice to the next Enron: If you want to get rich, we would prefer that you provide a new product or useful service, rather than simply thinking up new ways to pick our pockets.

-- Cherri (, April 22, 2002


90% of Enron's earnings in 2000.

-- Cherri (, April 22, 2002.

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