The Enrons of Tomorrow -- Count Me In
On this very page, six months ago, I was propelling fireballs out of my fingertips, scorching the keyboard with what I had to say about a corporate crime.
Trader Kevin and Trader Bob, the Enron Gotcha Twins, had been caught on tape bragging about sticking it to California in November 2000, cutting off energy to jack up the price and jack us around. As blackouts shook us like a megawatt San Andreas, they wished a bona fide earthquake would make California just “float out to the Pacific.” It was summer when I learned all this. I was hot, and I was mad.
Now, more energy gamester transcripts have turned up. And I’m reading about Bill over at Enron phoning up Rich in Las Vegas in January 2001, telling him not to put anything down on paper but to “get a little creative,” to “come up with a reason to go down” -- to phony up some maintenance excuse like “checkin’ a switch on the steam turbine” to shut down his power plant just when California really needed the juice.
Rich catches on fast. He doesn’t think that switch will get fixed tonight, so “we’re probably gonna have to check it tomorrow afternoon again.”
“That’s a good plan, Rich,” Bill says in egging him on. “I knew I could count on you.”
It’s winter now. I’m cold, but I’m not mad anymore. A lot can happen in six months. A girl can mellow, can’t she? George W. Bush turned me around. I’m not reading these new transcripts as a consumer who was rate-raped and left for dead in the cold and dark. I don’t see con-artists-in-training apprenticed to master con artists. No, with the Bush plan to privatize Social Security, I’m reading them as a potential stockholder! Enron isn’t them anymore -- Enron could be me! Try it yourself.
This week, a witness testified in court that Bernard J. Ebbers, the top dog at WorldCom Inc., faked accounting records to get the kind of profit that Wall Street expected him to get, which is why WorldCom went into an $11-billion belly-up bankruptcy. Six months ago, I would have despised Ebbers as a crook who had earned a confirmed booking at a Graybar Hotel. But now, as someone whose retirement nest egg could have been bound up with WorldCom’s fortunes, I realize that this is just a guy who was looking out for folks like me and getting a public dunking for it.
See? Bush is right; an ownership society changes everything. An Enron’s need would be my need, an Enron’s profit would be my profit, and with the ginned-up cost of a megawatt-hour spiking from $30 to as much as $800, how could I be anything but tickled at Bill and Rich’s amusing little frat-boy schemes?
Sure enough, the day after Rich and Bill hatched their plan, the blackouts rolled. And what happened? Capitalism, that’s what. It was dark -- so people bought flashlights and batteries and candles. It was cold -- so people bought coats and sweaters and gloves. More power to the retail economy! So what if some businesses had to slow down or shut down, like those rides at Knott’s Berry Farm and some ATMs and that medical supply center that lost all of its computer data? They should have planned ahead and bought backup generators, and incidentally made money for Americans whose retirement dollars were invested in generator stocks. Too bad about the other Americans whose retirement dollars were invested in amusement parks and banks and medical supplies.
I’ll let Bush explain the mechanics of ownership, the way he did in Tampa, Fla., the other day when someone asked how it would solve Social Security’s red-ink issues: “Because the -- all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There’s a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those -- changing those with personal accounts, the idea is to get what has been promised more likely to be -- or closer delivered to what has been promised. Does that make any sense to you?”
Actually, no, it doesn’t, but he’s rich, and I’m not. He’s president, and I’m not. His friends are CEO millionaires, and I’m not. So he must be smart about this, and I guess I’m not.
But I know this -- it’s like William Vanderbilt, the 19th century railroad bigwig who had to haul himself up by his bootstraps with only the $95 million or so he inherited from his dad. When some newspaperman reportedly asked him whether robber barons were letting down the public interest, he let fly. “The public be damned” is what he said.
Now, more than a century later, that’s exactly the genius of it. In an ownership society, there is no public, and no public interest. There are only stockholders. Like me, you and Enron’s ex-chief Ken Lay. Enron took down millions of investor dollars when it sank, while Lay, I read, is still $20 million to the good. So they can call us all stockholders, but some of us will always be more equal than others.
