Opinion » Cybernaut


Learning from Enron



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What went into the paper shredders, and what went on behind closed doors during the past few years will no doubt be scrutinized for years. The close ties to prominent politicians, especially Republican politicians, and especially President George W. Bush, will keep this case in the public eye for a long, long time.

As tedious as this investigation may seem sometimes, understanding what happened at Enron is important because things are going to change.

Investors are wondering how many other companies out there might be cooking the books, more hype than substance. How far does the corruption go?

To restore the credibility of stock trading, the government is going to have to reform the auditing process, and impose stiff penalties against companies that pad their books. More transparency will also be needed at every level of the game to ensure that stock prices accurately reflect a company’s value. If the CEO of a major corporation is selling his or her shares, the public should know that, too.

Furthermore, the issue touches on the subject of campaign reform. Politicians will no longer be able to accept soft money contributions, or curry favours from corporations. These rules will change the way industry can lobby government, and to what extent representatives of private corporations can help shape government policy.

In the long run it could also help the Green Party emerge as a viable third party in the U.S. as the investigation helps people become aware just how close the ties are between politicians and big business.

While it’s doubtful that this sad event will lead to a new age of enlightenment, Enron is a shining example of how the whole economic system is flawed, inviting these kinds of abuses. At the root, economics are based on perception, how people are feeling these days and what the corporations are telling us in their annual reports, rather than a simple measure of profits and losses.

To read more about the Enron scandal, check out the following sites.

For more about Enron and its ties to the Republicans, check out Michael Moore’s letter to George W. at www.michaelmoore.com/2002_0128.html . Another good site, which Moore uses is Open Secrets at www.opensecrets.org.

For regular updates on the investigation, visit any of the following business news Web sites: Fortune at www.fortune.com , CNN Financial News at www.cnnfn.com , and the Microsoft Networks/NBC News portal at www.msnbc.com .