Posted on 05/11/2002 4:12:10 AM PDT by snopercod
While it's still unclear exactly what caused the implosion at Enron Corp., one thing is perfectly clear: Ideological playwrights are jumping the gun to cast Enron in the starring role for their pet political morality plays. The most ludicrous role being cast for the corporation, however, is that of "jungle - capitalist - price - gouger - getting - its - comeuppance" - the role written for Enron by California Gov. Gray Davis & Company.
First of all, the obvious question arises: If Enron were such an effective price-gouger and ruthless economic pirate, how is it that the company went belly-up less than a year away from the scene of the crime? The awkwardness of the question almost certainly explains Davis's bizarre accusation that the company's own merciless behavior brought it down.
Since corporate ruthlessness usually reflects the vigor with which a company pursues profits, it would appear that Enron was actually not ruthless enough. For instance, records pried from the governor's office by legal action reveal that during last year's crisis Enron was charging less for electricity than the market average and significantly less than Davis's own L.A. Department of Water & Power, under the direction of the governor's "electricity czar," David Freeman.
Even were Enron overcharging, it was scarcely a major player in California's market. According to the governor's office, Enron only supplied about 4 percent of the state's electricity needs. Davis's relentless campaign to lay all or even some of California's electricity troubles at Enron's doorstep is ludicrous on its face.
Moreover, few remember that Enron was accepting IOUs from the power companies and the state of California rather than demanding cash upon delivery at the height of the crisis. But trusting the state to make good on its promises to pay was an example of the corporate heart ruling the head. According to energy economist Phil Verleger, the state of California ended up stiffing Enron for millions of dollars, a (dare we say "ruthless"?) maneuver that certainly didn't help Enron stay out of bankruptcy.
Second, the attempt to lay this debacle at the door of California's "anarchic capitalism, in which there are no rules and no referees" (in the words of California State Sen. Steve Pearce who - get this! - was the politician who wrote, sponsored, and helped pass this alleged anarchic capitalist system in the first place), is so ridiculous that it's hard to believe that it can be made with a straight face. We'd be happy to recount all the means by which regulatory oversight actually increased - not decreased - with the passage of California's alleged "deregulation," but space literally will not permit it.
Suffice it to say that, as industry consultant Charles Cicchetti put it upon the launch of the California experiment, "two things should be obvious. First, none of this should be called deregulation. Second, it is difficult to see how any of these myriad regulatory schemes, unless altered significantly but perhaps not fundamentally, will lower prices."
Thus, while it's still unclear whether California's regulatory environment had anything to do with the bankruptcy, that regulatory environment was anything but the "Wild West" alleged by Democratic spinners.
The related campaign to tie the president's energy plan to the machinations of Enron is also hard to swallow. While it's certain that CEO Ken Lay's voice counted for, say, more than ours during last year's deliberations, nowhere in the administration's energy plan was one of Enron's highest priorities - the mandatory imposition of what the company erroneously called "electricity deregulation" on every state of the Union. Enron's agenda, in fact, was regulatory, not deregulatory. They lobbied for dramatic restrictions on greenhouse gas emissions, heavy subsidies for renewable energy, and a host of interventions in the electricity market. Regardless, the constant attempt to argue motives (why the administration did this or that - were they bought? - are they corrupt?) rather than actual policy (is it a good idea to do this or that?), is one of the most disingenuous ploys in Washington, a ploy which is a smear by any other name.
None of this is to say that we are big fans of the Enron policy agenda or the president's energy plan. We aren't. But the intellectual gymnastics by which some are trying to tag the company as the font of all troubles and a poster boy of laissez faire is beyond irksome. The smoke has yet to clear from the economic wreckage. Let's wait and see what an investigation of those curious books finds before lessons are drawn.
Uh huh. Companies went bankrupt. It happens. Still waiting to hear what this has to do with "corruption of the right".
In addition to the FERC obstruction of CA looking into manipulations of the power market, there is the unresolved issue of the Energy Task Force under Cheney.
In English, please? What did "the right" do, and why was it "corrupt"? Can you state this by yourself in one sentence, without linking to some Google search? Sheesh. It's a simple question.
You're taking a very big shortcut in your argument. Your argument consists of bits and pieces of information: CA power crisis, some kind of FERC investigation, two companies "went down".
But what's the corruption?
You remind me of Clinton defenders, who quibbled about what was "legal" in putting forth a defense of what was illegal.
The difference is that Clinton defenders were rebutting people who were actually making substantive charges of some kind. I still don't even know what it is you think that Bush (?) did that was so "corrupt". Aren't you capable of telling me?
I don't give a damn what you say, where there is stink there is sh_t, you know the old saying "I smell sh_t!"
Excellent argumentation. Bravo, I concede!
Make a point of some kind, please, or be silent. I don't have time to deal with childish cartoonish one-liners strung together as if doing so constitutes rational argument.
The answers to your questions:
1. I have no idea where the Vice President of the United States "has been lately". Who cares?
2. I don't know "why" he is "lying low" nor do I even think that's the case, except in the shallow minds of people with a very cartoonish view of politics.
So anyway, what's your point? Do you have one?
Grow up, please. Goodbye.
The reason why corporations incorporate offshore is not to "hide" things, it's because of taxes.
There is an article in today's IBD reporting that Stanley Toolworks is incorporating in Bermuda [same as Enron], because doing so will save them $30 million per year in taxes.
The democRATS are in a rage that "during this time of war, Stanley has chosen profit over patriotism"
IBD asked if they should stay so they could be "taxed at punitive rates so that [the Democrats] can hand out costly favors to their voters."
I may post the full editorial if I feel like keying it in...
The answer to a democrat is obviously, yes they should stay and pay punitive taxes!
Let's look at California, do the Democrats think that with high power rates, and likely higher taxes that Boeing isn't going to shift some production out of California to a state that provides a more favorable business climate. Boeing told the state of Washington to change. The democrats in charge of politics in Washington state told Boeing to shove it. Boeing is now headquartered in Chicago rather than in Seattle where it had been since its birth.
In explaining the move, Boeing stressed its obligations to its stockholders.
Yep, Stanley tools will incorporate whereever they need to.
In most cases, yes, that's true. (I agree that companies are outrageously taxed.) But in Enron's case, they used offshore accounts to hide the true nature of the company's financial status, to massage the bottom line. Sherryl Watkins
blew the whistle. It was time for show and tell - to answer questions. The Enron game was over.
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