Normally, I am a “bleeding heart” when it comes to long prison terms,but an appropriate sentence for the Enron boys might be six trillion years. Kenneth Lay with hismillion-dollar smile and Jeffrey Skilling with the cold, confident eyesof a viper made their company into the symbol and showpiece for aglorious era. It was the hyper-modern and market-efficient “neweconomy,” in which the concept of wealth falling out of the sky becamebriefly hip and widely believed in respectable circles.
Enron led the way. Lay and Skilling showed us how it’s done. And whenEnron fell, the great national delusion turned to catastrophe.Unwitting investors lost $6 trillion overall. Millions of innocentbystanders lost much more in terms of their lives. So let Skilling andLay now serve as symbol for the shame of modern American capitalism.Let these guys do the time for all those others, the corporate titansand financial con men, who got away.
Justice sometimes proceeds in strange ways. I am opposed to publichangings and other forms of scapegoating, but perhaps this time we needa spectacular ritual sacrifice to amplify the point made by that swift,sure conviction in Texas. These men in the good suits arecriminals–criminals!–who must be made to set an example forall ambitious people who toil in business and finance.
These two thugs looted pension funds and destroyed the personal savingsof families. They stole money from the rest of us, not to mention fromgovernment and other non-glamorous business enterprises. They riggedenergy markets to drive up prices and bilk defenseless consumers (anold-fashioned swindle borrowed from nineteenth-century robber baronsand newly decriminalized by deregulation). They swallowed viable,productive companies and wrecked them, especially wrecking thelivelihoods of their employees. And, worst of all, they were best palswith politicians and political leaders as well as the most prestigiousnames in banking and finance–connections the Mafia would die for!
Sorry, am I shouting? My exuberance over this verdict is amixture of joyous fulfillment and lingering doubts about the impact.Since the meltdown of the stock market in 2001 and the avalanche ofscandalous revelations that followed from hundreds of corporations, Ihave thought the political system and the financial system and even thepublic at large did not sufficiently get the message. The pervasive rotin American capitalism is much deeper than acknowledged. The variousforms of fraud by which millions of people are separated from theirmoney continue in practice, often blessed by law itself.
Still flourishing, likewise, are the leading Wall Streetfirms–Citigroup, Merrill Lynch, JPMorgan Chase, to name a few–thatshowed Lay and Skilling how to do the fancy financial footwork,converting “debt” into “revenue,” so that stock analysts could toutEnron’s rising “profit”. This was fraud too, but nobody from the bankswent to prison (they paid millions, even billions, for no-guiltsettlements with government and injured investors). Message to America:Don’t rob the Seven Eleven with a six-gun. Rob the general public withpen and computer.
Congress, meanwhile, claimed to “toughen” financial laws, but they didnot get reform halfway done. Now the Chamber of Commerce and otherfront groups are back in Washington insisting that the rather mildreform measures be scrapped too. They may very well succeed, if thepublic is not aroused. The media can take care of that. They will bedescribing this verdict as “an end of the era.”
Wrong again. Thet era of corporate corruption, financial swindling and blue-sky illusions is not over. The players are merely paused, waiting for the marks to re-enter the casino. Perhaps Kenny Boy’s conviction will remind people that the game is still fixed and those guys in good suits are the dealers.