Enron’s Lullaby Sang to Our Greedy Side
It was a scam from the beginning. We were looking for easy gain--and so was Enron.
Energy deregulation was a load of fairy dust all along.
The unregulated market? We energy consumers thought we could cut ourselves a sweetheart deal. Or at least our politicians did, and too few of us bothered to object. We would stop taking care of ourselves and let the free market take care of us. We’d make out like crazy. So would industry. And everyone would live happily ever after, so sleep tight, my dears.
Now, oh boy, we wag our fingers at the discovery of serpents and griffins in our bedtime story. Looks like Enron manipulated energy supplies to California and made a killing. What a shock. The same political leaders who tucked us in with their soothing promises about deregulation are now the loudest to protest about being “gamed.”
Well, what did they expect, really? What did we expect?
Don’t get me wrong. Every bit of justice that can be imposed on those arrogant highfliers of Enron and the other wheedlers of deregulated energy is only half of what is owed, as far as I’m concerned.
But we shouldn’t let ourselves off the hook either, and certainly not our elected leaders.
We were sold a lie with the deregulation fairy tale. But let’s remember that we hungrily bought it. Enron was eager; so were we. This wasn’t a pickpocket operation. This was a con and we were players, drawn in by the shortsighted hope of easy money, cheap electricity, carefree living. And, oh yes, bountiful campaign contributions for those who smoothed the path.
The “market” will take care of us.
It didn’t. It won’t. It can’t.
Enron’s just-released internal memos about Western energy trades are said to be “the smoking gun.” They are. What they prove is that the unregulated free market isn’t so free at all, and never was. The free market doesn’t care if California’s classrooms go dark, or stoplights go blank and create terrible accidents. Those are, as one Enron memo put it, “a public relations risk.” The unregulated free market doesn’t care if a family can heat its house or pay its bills. The free market cares singularly about profit. Look it up. It’s called “fiduciary responsibility” to investors. It’s the supreme law and guiding principle of our particular brand of free-marketeering, and we see it every day, everywhere we look.
One big surprise about these Enron memos is that they have generated so much surprise.
Seizing advantage, creating opportunity where none exists, playing two sides against each other, profiting from shortages, holding back until the price rises, betting on someone’s misfortune--these are the daily bread of all market traders. True, not every company gloats about it as Enron did, or calls their schemes by names like Death Star and Fat Boy, but the principles are the same.
Should we be surprised, really, when an energy middleman buys $250 worth of California electricity and resells it to Oregon, where it fetches $1,200? So what if the sale contributed to a power emergency in California? Where is it written, or even presumed, that a wheeler-dealer is supposed to answer to anything higher than a stack of money?
What is wrong with 500% profit anyway, if you can get it? How about 250%? Is 125% still too much? How many of those who object now were actually invested in energy stocks during 2000, when these deals were being hatched? You know who you are, Sen. Barbara Boxer (D-Calif.). And John Balzar too. Sure enough, I looked back at the mutual fund in my 401(k): I was an Enron man too.
Look at it the other way. Just how were consumers going to benefit from deregulation? Let’s see, energy companies were going to be so hungry for our business that they would rush out and build new plants--not here, of course, because we don’t want the blight or pollution, but somewhere else. Then we’d be abuzz with power. It would be a buyers’ market. Energy companies would struggle to achieve the lowest rates by outsourcing their work force, slashing wages, deferring maintenance--all those things that free marketers euphemistically describe as “efficiencies.” Who knows, maybe they’d have to bribe us with Beanie Babies and unlimited minutes of “free” electricity on weekends if we’d just let them power up the streetlights.
It didn’t work out that way. That’s another thing about unregulated free markets: You can lose as big as you can win. They were lighting up fine cigars and buying mansions back in Houston. They called it the American way.
Deregulating and putting in jeopardy something as essential to the civic organism as electricity was an awful mistake. Its champions took advantage of public distrust in government. They sang sweet lullabies about a far-off dreamland where people would do each other right by looking out only for themselves. We had to listen to the greedy part of our hearts to believe it.
