Why Enron happened

So every now and again, I watch documentaries I know are going to upset me. Yesterday, it was on how the bottled water industry is destroying this country’s ground water supplies to local municipalities (but I had to turn that one off because of how angry it made me – and boycott yet another corporation). Today, I watched a bit of “The Smartest Guys in the Room”, which I’ve seen many times before. Let me share some of my reasons for why Enron happened, because it angers me and I feel like ranting. Nothing will change, but I’ll feel better.

First, this country (the US) is too often regulation-averse. Reagan (the religious leader of modern Conservatism) told people “government is not the solution to our problems; government is the problem”. This, coupled with “free market” thinking tells people everything will be magically ok, that the government is the big bad wolf, and that if we’d only let people decide their own fate without any rules whatsoever then the “invisible hand” will take care of everything. This is the biggest bunch of miss-guided horse excrement I’ve ever heard in my life. What’s worse, it’s somehow (historically) blurred with confusing critique of the current implementation of the capitalist system with being a commie or whatever other nonsense totally unrelated to the discussion (I’m a “Capitalist”, but of the sensible and sane variety).

Without any regulation, people with a high moral compass and sense of ethics (perhaps the kind of people Reagan imagined the world outside the confines of the bubble of the Oval Office to be filled with), coupled with wider thinking about the world might act only for the greater good. But don’t count on it. In reality, in the real world that actually exists (outside of Washington and Hollywood, as well as within), there are bad actors, people out only for themselves (who don’t give a crap about destroying the country in the process – and I don’t mean this as an indirect political slur, people abusing the system are from many different political backgrounds), and the rest. Regulation employs rules and principles that are designed to prevent abuse. It allows people to play games, but within the bounds of having some actual upper limits on how insane they are allowed to be with other people’s lives. Regulation is also far from perfect. Situations arise that were never considered, ways are found to abuse any system, etc. But when regulation fails, is insufficient, or excessive, the solution is to fix the regulation, not remove it entirely.

Second, we’re too reactionary. Rather than thinking ahead, “gee, we haven’t done anything with our infrastructure in 50 years, do you think that bridge is going to fail any time soon? What about that tunnel?”, we just wait until bad stuff happens and then spend billions of dollars more than necessary to correct for it afterward (see also, Healthcare). We tend to consider all kinds of (irrational) new rules and regulations in the wake of giant scandals, rather than introducing a few simple rules beforehand, and empowering our government and regulators to track down these impending disasters years before they happen. In a similar vain, we will probably wait until the water is around our feet before we wake up to climate change, because it’s not such a huge giant scandal yet (unlike bridges and tunnels, billions of dollars won’t be sufficient this time around, nor all the hot air Congress can generate).

There are other problems, such as an unwillingness to introduce additional necessary taxes in order to pay for new infrastructure, or government programs that can actually make people’s lives better, but the main problems are a lack of regulation and a need to react to everything years after it happens, rather than years before. I want to make it clear, I love this country, which is why I’m very saddened by these realities. I’m also a believer in Capitalism, and of the value in market-driven innovation, etc. But I’m a more touchy-feely, friendly kind Capitalist in which everyone has an even playing field, starts at the same point, and plays by the same (sane) rules.


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