imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
latest news
best of news




A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List


IMC Network:

Original Cities africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

FTCR Commentary: Enron Gets Zapped by Its Own Greed

by Doug Heller / The Foundation for Taxpayer and Wednesday, Dec. 05, 2001 at 10:03 AM

When the stock of energy giant Enron fell to 36 cents per share this week from a high of this year, the market finally accepted the reality that the company--a middleman whose main business was not producing or delivering power but trading it--was never really needed. Investors, who unlike Enron executives, didn't sell until too late lost their retirement savings and children's college tuition to the illusion.

Enron Gets Zapped by Its Own Greed

by Doug Heller

When the stock of energy giant Enron fell to 36 cents per share this week from a high of this year, the market finally accepted the reality that the company--a middleman whose main business was not producing or delivering power but trading it--was never really needed. Investors, who unlike Enron executives, didn't sell until too late lost their retirement savings and children's college tuition to the illusion.

Enron workers sacrificed their retirement plans, which were locked up in Enron stock that was frozen by Enron executives after they sold off their own shares.

California ratepayers will pay billions too much for power over the next decades to foot the bill for price gouging by Enron and its proteges.

The task for both society and the market now is to prevent such mirages in the future.

The illusion that Enron had value was created through both politics and philosophy.

The company's chairman, Kenneth Lay, was one of President Bush's biggest donors and was an energy advisor to Vice President Dick Cheney. Lay was even rumored to be on the president's short list for Treasury secretary.

Lay's power over the Bush administration was so great that he has been credited with forcing the nation's chief energy regulator out of his job because the regulator disagreed with him.

Enron created itself through a growing corporate vision: If you want market share, create a market, even if there is no need for it. Lay turned a stodgy gas pipeline company into a tech-savvy energy trader.

The "make a market" mantra, in conjunction with his long-standing ties to political leaders, shifted the nation's energy system from regulated monopolies to a deregulated, wholesale market-based system with few rules and even fewer entities with the technical capacity to make sense of it.

For Enron and Lay, a market was a tool for profitability, not productivity. Rather than add efficiency to the energy delivery system, Enron simply added layers of expense.

The new energy market, with Enron at its vanguard, became a free-for-all of energy companies selling electricity back and forth like pork bellies while siphoning off the excess with each trade.

Its apparent success made Enron a shining star on Wall Street. Chairman Lay took in 1.6 million in salary, bonuses and stock in 2000. He cashed out another million earlier this year. Former chief executive Jeffrey Skilling took home million in 2000.

Meanwhile, what did Enron accomplish?

If a competitive market was supposed to drive prices lower, why were Californians paying so much more for their power?

Why were there blackouts?

Indeed, Enron's stock was so high due to investors' belief that the company would continue to price gouge in California and, as their deregulation model took hold, throughout the country.

Greed, cloaked in the promise of a competitive market, created and drove the deregulated energy system. So it should come as no surprise that Enron would try turning the free money skimmed from ratepayers into more free money by creating new markets.

But through foolish investments and poor management decisions, their money began to evaporate.

Without oversight, Enron managed to conceal massive mistakes. It played accounting games to hide problems and shifted money from book to book to maintain the illusion of success.

Why would Enron come clean about partnerships that were unprofitable, if no regulators were there to make it do so?

Like Icarus, the company flew too high and came crashing down. Only the small investors and pension fund mangers who bet on the company were burned, while insiders parachuted out into the sunset with all the proceeds.

The moral for society should not only be that markets need rules and limits, but also that some things don't need markets at all.

Enron took over a system that reliably moved a public good--electricity--from power plant to home. It used deregulation to make money out of nothing, simply by adding cost to the product en route.

Federal regulators should ensure that if Lay or other Enron executives deceived the public, they pay a price.

Courts should return to workers and shareholders as much of their losses as possible.

The energy system must reinstate rules.

Most important, society must recognize that when such great value is pinned on illusions, it will also have a great cost.


This column appeared in the Los Angeles Times, November 30, 2001.

Doug Heller is a consumer advocate with the Foundation for Taxpayer and Consumer Rights. E-mail:

Report this post as:

Local News


lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

Center for the Study of Political Graphics exhibit on Police Abuse posters F07 9:50AM

City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre F04 3:17PM

Professor's Study Highlights Health Risks of Urban Oil Drilling F04 12:42PM

Claims paid involving Pasadena Police Department 2014 to present F04 10:52AM

Pasadenans - get your license plate reader records from police F03 11:11PM

LA Times Homicide Report F03 1:57PM

More Local News...

Other/Breaking News

Xyloglossie attitudinale A23 8:07AM

Shadowgun Legends Hack and Cheats A23 7:24AM

What does the Quran Say About Islamic Dress?? A21 4:15PM

Biodiversité ou la nature privatisée A20 11:22AM

The Market is a Universal Totalitarian Religion A20 7:14AM

Book Available about Hispanics and US Civil War by National Park Service A19 5:52PM

The Shortwave Report 04/20/18 Listen Globally! A19 4:01PM

The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder A19 11:48AM

Neurogenèse involutive A18 9:21AM

Paraphysique de la dictature étatique A16 10:13AM

Book Review: "The New Bonapartists" A16 3:45AM

The West Must Take the First Steps to Russia A14 12:25PM

Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine A14 3:30AM

The Shortwave Report 04/13/18 Listen Globally! A12 3:50PM

“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize! A12 3:48PM

The World Dependent on Central Banks A12 4:43AM

Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine A11 9:40PM

March 2018 Honduras Coup Again Update A10 10:52PM

Apologie du zadisme insurrectionnel A10 3:33PM

ICE contract with license plate reader company A10 1:14PM

Palimpseste sisyphéen A09 11:23PM

Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes A09 5:32AM

Prohibiting Micro-Second Betting on the Exchanges A09 4:18AM

Prosecutors treat Muslims harsher than non-Muslims for the same crimes A08 10:33PM

Amy Goodman interview on cell phone safety A08 10:29PM

Mesa, Arizona police officer kills unarmed white man A08 9:50PM

Israeli leaders should be prosecuted for war crimes A08 9:48PM

Paraphysique de l'autorité A08 12:11AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy