Seminal historic events always affect the language. Already we can see that Enron is of this shattering magnitude. A stick-up artist goes into the Jiffy Mart to pull a heist. He whips his heater and says to the clerk, “Put ’em up. This is an aggressive accounting practice.”
Or you take your car to Ralph’s Rip-off Garage to get a $50 problem fixed and, sure enough, he bills you $600. You say, “What an aggressive accounting practice!”
Euphemism of the Year, and it’s not even February yet.
The single most distinguishing feature of the Enron collapse is that no one is yet sure the company did anything illegal. (Aside from destroying documents, which arguably falls in the “seriously ill-advised” category.) As we gyre and gimble in the wabe of Enron, we run across such delightful items. Did you know that Enron’s board twice voted to suspend its own ethics code in order to create private partnerships? But how thoughtful of them to suspend the ethics code first! Otherwise, they might have violated it.
The funniest line of argument about Enron so far is “This is not a political scandal.” Boy, there’s a triumph of denial. Of course it’s a political scandal.
Business writers solemnly explain that Enron was in the business of buying and selling everything from natural gas and electricity to — as the company grew increasingly delirious — broadband telecommunications, water, and weather contracts. Also legislators, congressmen, governors, senators, and presidents — the company bought them with campaign contributions and then sold them on fatally foolish policies. Anyone who tells you campaign contributions only buy “access, not policy” needs to have his nose rubbed in this one. Just to mention a few highlights:
* Wendy Gramm’s key decision as chair of the Commodities Futures Trading Commission to deregulate energy futures markets. She has been on the Enron board since 1992.
* Sen. Phil Gramm received over $97,000 in Enron contributions and passed legislation that exempted key parts of Enron from government
* President George W. Bush got $2 million in contributions from Enron and its officers over the years, and numerous administration officials have Enron connections. A key decision by the administration was to call off the Clinton-led effort to stop international money-laundering (used by terrorists, drug-traffickers, kleptocratic dictators, and tax evaders) by going after off-shore banks. As has been widely reported, Enron maintained more than 800 offshore accounts in order to avoid taxes — and paid none in four of the last five years.
There’s some serious business here. If we are lucky, plucky, and raise lots of hell, Congress will probably make some improvements in campaign-finance laws, the conflict of interest on auditors also working as consultants, and oversight of private partnerships. And that will not be enough.
As Bill Greider writes in the current issue of The Nation: “The rot consists of more than greed and ignorance. The evolving new forms of finance and banking, joined with the permissive culture in Washington, produced an exotic structural nightmare.
“They converge, with back-scratching in the business of lending and investing other people’s money. The results are profoundly conflicted loyalties in banks and financial firms — who have fiduciary obligations to the citizens who give them money to invest. Banks and brokerages often cannot tell the truth to retail customers, depositors, or investors without potentially injuring the corporate clients that provide huge commissions and profits from investment deals. Sometimes bankers cannot even tell the truth to themselves because they have put their own capital (or government-insured deposits) at risk in the deals.”
It seems pointless to continue the argument over free-market capitalism versus regulated capitalism. It is a theological, not a practical, argument, requiring perfect faith from the free-market fundamentalists.
The greater danger is that as these enormous financial institutions run into trouble, they’ll take everybody else with them.
Molly Ivins writes for Creators Syndicate and the Fort Worth Star-Telegram. Her work appears in the Flyer periodically.
