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Sunday, July 09, 2006

ENRON, KEN LAY AND CAPITALISM

No doubt that the Enron scandal is the typical affair that gives capitalism its bad name. Just as I was browsing through the first pages of “Conspiracy of fools”, a book by Kurt Eichenwald, another NYTimes writer, on the Enron scandal my daughter Barbra gave me recently (and that I am saving for after I finish “Flu”), the news came about Ken Lay’s death, apparently from a heart attack.

I’ve read Ken Lay’s biography in the newspapers: the modest family young boy that made good. First in the Administration and later in Corporate America to lead one of the largest companies in the world of the energy business, to end up, through lies, financial engineering and utter mismanagement, starring a tremendous downfall that ruined hundreds of investors and brought down with it the Arthur Andersen accounting behemoth.

Now he is escaping justice by just dying off and it won’t be of any use for his creditors to dance a fandango over his gravestone.

Back some years ago while the whole scandal was breaking up someone (Was it one of “The Economist” headings?) asked “who is auditing the auditors?”. For audits and regulations are the tools of capitalism control… except when something gets to be big enough to scare everybody, including auditors and government regulators.

In Spain we have our share of high flying crooks as recently was discovered around the “Forum Filatelico” investments scam that just evaporated the savings of some three hundred thousand small investors, manly retired and modest And misters De La Rosa and Mario Conde are currently enjoying the hospitality of the Spanish jail system after their ambitious crookery back in the late nineties proved to be too much for our always inefficient judicial system.

Still all of this together is not enough to invite anyone to change the system. Capitalism is here to stay and one just has to be more keen in controlling thieves and robber barons dressed in Armani. Not that there is anything new under the sun. I have some idea that it was Croesus, in the old Roman times, that staged one of the first recorded delinquent bankruptcies under whatever name they gave it those days. The only difference could be that the Romans were a bit more expedient and simply beheaded the wrongdoers instead of wasting millions in lawyers and legal fees.

Indeed capitalism will survive. As for capitalists, who ever wanted to be the richest tenant in the graveyard?

Sic transit.

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