media consumption

Enron: The Smartest Guys in the Room

Viewers of this movie can be forgiven, I think, for forgetting the heady days of the dot-com boom when the stock market growth seemed limitless. We can be forgiven for forgetting that the astounding profits posted by Enron once seemed merely a matter of course.

But then again, we can't. If we learn anything from this film (and the book it ws based on), we should learn that such unstainable growth fueled by blatantly untamed greed can (and will) happen again. Sarbanes-Oxley notwithstanding, some people will always find a way to extract money at the expense of other, often by any means necessary. Despite the subtitle, this isn't the story of a few bad apples--although those apples were indeed pretty rotten--instead, this film is a detailed autopsy showing the failures of each and every system put in to place to prevent the fraud and corruption that occurred.

The movie is designed to provoke outrage. Of course there is plenty to be angry about, and the filmmakers have scripted the story for maximum impact. I was shaking in my seat by the time we heard the recordings of Enron traders cheering the California wildfires even as their predatory trading practices triggered rolling blackouts throughout the state.

But there is plenty of blame to be spread around. If you want to get political, you could point to the conveniently cozy relationship between Ken Lay and the Bush family. But at its base, this isn't a Fahrenheit 9/11 story of political intrigue. It's a more basic story of unbridled money-grubbing. Jeff Skilling could never have implemented the deceitful misuse of mark-to-market accounting practices if Arthur Andersen hadn't been so eager to sign off on the accounting method to secure Enron's business. Andy Fastow would never have gotten away with hiding the mountain of Enron debt if a herd of Wall St. banks had not been willing to support him with a steady supply of cash in the form of what were pretty clearly shady investments.

This is a tale of ultimate hubris. The house of cards that Enron had built tumbled almost as soon as the question was asked: "how does Enron make the money that they claim to be making?" It was a question that no one had seemed interested in asking. In the meantime, the top executive cashed in on their stock options before the cards hit the table.

I'm afraid that it will only be a matter of time before a new batch of smart guys build the next Enron.

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