Left on the Skilling Floor

Ken Lay and Jeffrey Skilling have been convicted of conspiracy and fraud for their roles in the Enron collapse. Michael Lynch saw this coming four years ago; more Reason reportage on Enron is here, and more Lynch-on-Enron is here.

Comments

[Jersey McJones]

HAZAA!!!!!

JMJ

[Schempf]

Once again the market and our legal system have taken care of the "Evil-Doers".

Now can we please get rid of Sarbanes-Oxley.

[John]

I wonder if Skilling is going to flip off his employees anymore. (Apparently Skilling one day pulled out of line in the Enron parking lot and went through the in exit while flipping the people he passed the bird). I hope they both get 100 years in one of those "pound you in the ass real prisons" they talked about in office space. They gave every leftists an excuse to paint capitalism as corrupt and evil, cost the country billions of dollars and saddle it with SARBOX. Hell is too good for both of them.

[Jamie Kelly]

Yes, Jersey. Glad you're happy. Now, we eagerly await your post informing us that Enron and WorldCom were all the fault of the unregulated market.

[Turbo Man]

BEWARE of Evildoers!

[Obsessive- Compulsive Man]

Evil-Doers

[SPD]

Capitalism being a system cannot be corrupt and evil. Capitalists, however, can be, and they should pay the price. But any system can be exploited if you know how to circumvent the regulations.

That's why you can make as many Sarbanes-Oxley-type rules as you want; it won't stop those determined and unscrupulous enough from violating them. Sort of like gun control, morality and drug legislation.

[Lowdog]

Of course it's the fault of the market, Jamie. You see, most people are just too stupid to be able to understand the intricacies of the market and will always be taken advantage of by evil, greedy people.

[SR]

I blame disparities in taxation between dividends and capital gains for this. Hate the game, not the playas.

[Dave W.]

That's why you can make as many Sarbanes-Oxley-type rules as you want; it won't stop those determined and unscrupulous enough from violating them.

No, but it will stop those who are not determined and unscrupulous enuf. Which is the point of all the criminal law, not just the parts u don't like.

[VM]

"Of course it's the fault of the market, Jamie. You see, most people are just too stupid to be able to understand the intricacies of the market and will always be taken advantage of by evil, greedy people.

Comment by: Lowdog at May 25, 2006 02:53 PM"

dammit Lowdog. I read your comment thinking it was on the North korea thread!

[Dave W.]

That's why you can make as many Sarbanes-Oxley-type rules as you want; it won't stop those determined and unscrupulous enough from violating them.

No, but it will stop those who are not determined and unscrupulous enuf. Which is the point of all the criminal law, not just the parts u don't like.

Like the death penalty, I think SOX draws any power it has thru symbolism and as a statement of values as to what is important in US culture. Like the death penalty, I oppose SOX, but, like the death penalty again, my opposition is very weak because I just don't feel that bad for the people who bear the lion's share of the inefficiency.

[lannychiu]

it is too bad that Sarbanes Oxley can be acronymized (is that a word?) as something similar to my beloved

Red Sox.

It would have been much better if the law was written by a Sarbanes and an Uxley, leading to the much more appropriate acronym

SUX

[Billy Ray]

Evil-Doers

I believe it's Evil-doers

[Dogboy]

Here's EXACTLY what SOX did:

It took $4.7M from my company last year --for no good reason -- and gave it to lawyers and auditors who are benefiting mightily from SOX.

[lannychiu]

Dogboy,

I assume that means work in a public company who are no doubt trying to steal money from poor orphans...so you guys deserve whatever fee the righteous regulators want to charge you.

[John]

I wonder how long it is going to be before Skilling and Lay's sniveling trophy wives show up on Larry King talking about how hard they have it now after living for years off of millions their husband's stole from investors?

[Dave W.]

It took $4.7M from my company last year --for no good reason

You have no idea how many scandals of deceitful type proportions that 5 million prevented. That info is doled out on a need-to-know basis only, and, son, you ain't in that club. Don't kid yourself that you know things you don't.

[John]

"You have no idea how many scandals of deceitful type proportions that 5 million prevented. That info is doled out on a need-to-know basis only, and, son, you ain't in that club. Don't kid yourself that you know things you don't."

Yes Dave because everyone in the business world is a crook involved in some shady rip off of investors and only things like SARBOX keep them all from stealing. The 5 million only prevented thefts if the people running the company are all crooks. Is that what you assume about every company?

[fyodor]

Don't kid yourself that you know things you don't.

And don't kid yourself into thinking you can make reasonable assumptions abut the world around you based on what you've observed. If you don't know it for a fact, you cannot have any reasonable opinion whatsoever. So open up that umbrella to keep the elephants away, since you don't KNOW that you won't be stampeded by elephants if you don't.

[nate]

Wait... I thought Dave W. was joking with his 3:56 comment.

[matt]

If he was serious and not joking around, Dave W.'s comment reminded me of this Simpson's scene:

Homer: Not a bear in sight. The Bear Patrol must be working like a charm.

Lisa: That's spacious reasoning, Dad.

Homer: Thank you, dear.

Lisa: By your logic I could claim that this rock keeps tigers away.

Homer: Oh, how does it work?

Lisa: It doesn't work.

Homer: Uh-huh.

Lisa: It's just a stupid rock.

Homer: Uh-huh.

Lisa: But I don't see any tigers around, do you?

[Homer thinks of this, then pulls out some money]

Homer: Lisa, I want to buy your rock.

[matt]

And of course that should be "specious" and not "spacious" reasoning.

[JW]

Can't we just buy all the shareholders in the US lucky rabbit's feet to ward off the evil-doers?

It'll be just as effective as SarBox and cost WAY less.

Of course, then we need to worry about irrational and exuberant foot rubbing.

[fyodor]

nate and Matt,

I don't KNOW Dave W was serious, but judging by our long and dreary history with him here at Hit & Run, I would say both that he was most likely dead serious AND that he's no stranger to spacious reasoning!! 🙂

[SPD]

I think it's "specious" reasoning. Spacious reasoning is when you choose to do so in the middle of Montana.

[fyodor]

SPD,

I was imagining spacious reasoning to be, well, akin to spacey reasoning. Like if your brain has no constraints on it and goes anywhere it feels like going with no connection to reality. Like it's your reasoning that's wandering around Montana!

I should add that at this point that I realize that Matt made an innocent typo of the type I've made plenty of times myself. I just thought the accidental result was amusing enough to put to use! Though if SPD was responding to me, perhaps that means that my joke was not easily 'gotten', oh well...

[Viking "Krazee Kowboy" Moose]

Hey Fyodor.

Maybe he's out of puddin'...

(Spacey reasoning: why he decided to play in K-Pax?)

[Dave W.]

If you don't know it for a fact, you cannot have any reasonable opinion whatsoever.

Depends on what I am being sold. If someone tells me that their company used to make gadgets, but has now switched to widget production, I tend to believe them.

If somebody tells me that their corporation is free of accounting trickery and always has been, I tend to be skeptical. I am especially skeptical if I am not talking to the CEO or CFO, because I know they wouldn't know. It is better for lowlevel employees not to know. Doesn't mean I assume Dogboy's company is guilty. Instead, as I so often do here at HnR, advocate agnosticism.

Selfserving statements best serve points that are uncontroversial. But we're talking about SOX here.

I was serious about Dogboy's assertions not meaning much for purposes of this debate. I was kidding about supporting SOX. In a later post, I clarified my position, to wit weak opposition, on SOX.

[Dave W.]

"later post" should be --earlier post-- (3.20p to be exact)

Again: Dave W. against SOX. That's the fact, Jack. Not so dreary, then.

[fyodor]

Instead, as I so often do here at HnR, advocate agnosticism.

Oh bullshit. Your implication is clearly that we should expect scandals to have been thwarted. If that's not what you consciously intended to mean, you should consider why it came out sounding like that to several people.

If somebody tells me that their corporation is free of accounting trickery and always has been, I tend to be skeptical.

Yeah but where did Dogboy say that? Well look, I'll concede this. Dogboy did not back up his parenthetical claim of "for no good reason." Presumably he figured that folks here would understand and concur that market forces, personal ethics and the threat of prosecution combine do enough to keep most companies honest so that SOX would do little to nothing to add to that. If those forces didn't work to keep most companies from being quacks like Enron, we'd be living in mud huts rather than modern cities. And meanwhile, the costs of SOX are very real.

[Dave W.]

I'll concede this. Dogboy did not back up his parenthetical claim of "for no good reason." Presumably he figured that folks here would understand and concur that market forces, personal ethics and the threat of prosecution combine do enough to keep most companies honest so that SOX would do little . . . to add to that.

I'll concede this. I win cause my concession is bigger!

[fyodor]

Whatever, Dave!!

[Dave W.]

oh, btw: SOX benefitted my past employer (a law firm), I believe. I also believe that it is a competitive benefit to my current employer. Still, I oppose SOX. Now that is the kind of integrity u won't see every day!

[Pro Libertate]

I was involved in assessing the effect of SOX on the bank I used to work for. The law had (and has) internal inconsistencies in it that were the result of it being slapped together as a but-we're-doing-something bill. I daresay that the costs of compliance will do more damage to the economy than every bad company act will in a similar period. Nothing will happen now, but look for SOX to go away with a few years.

A lot of the blame in the Enron case lies in the fact that GAAP allows a lot of shenanigans, too. But that's largely the government's fault (NGO or not, the SEC exerts a bunch of influence on GAAP). Don't hear much about that, do you?

[Dave W.]

I'll concede this. I win cause my concession is bigger!

Non-jokey translation: Well put, Fyodor. I concur with this analysis of SOX, too.

[SecondGuesser]

I love capitalism and I love free markets. But something inside of me says that Big Business is just as harmful to those endeavors as Big Government. Any thoughts on that?

[midbrowcrisis]

SG,
Big business is harmful to capitalism and free markets, especially when it colludes with the state, but surely it is not *as* harmful as Big Government. The Biggest Governments of the 20th century, Maoist China and the Soviet Union, set those countries back decades, not to mention killing around 100 million people in the process. And one wonders what Cuba would be like today had they had a truly free market rebellion in the late 50's instead of a statist rebellion.

[happyjuggler0]

And one wonders what Cuba would be like today had they had a truly free market rebellion in the late 50's instead of a statist rebellion.

Well, we can guess instead of wonder. Sompare North Korea and South Korea. The only difference worth a damn between the two countries is their economic systems. They have the same people, the same potential "natural" trading partners, roughly the same geography and natural resources, and started at essentially the same economic level.

But what a difference today.

[Jersey McJones]

You idiots.

The way you so simplistically differentiate money and power...

Ken Lay held considerable sway in the Bush White House - pushing through the FERC nomination, and almost being nominated to the Cabinet himself.

Money is power, you goofballs.

JMJ

[geeber]

Yes, Ken Lay held such sway at the Bush White House that when a collapsing Enron pleaded for federal help, the Bush White House said..."no."

Meanwhile, former Clinton Secretary of Treasury Robert Rubin tried to intercede on behalf of Enron.

[Isaac Bartram]

Ken Lay's problem was that he was stupid.

Instead of giving all that money to Bush he should have given to the Democrats.

If Al Gore had stolen the election instead of Bush Enron would still be in business and Ken Lay would still be flying high.

I'm only half-joking.

[Russ Feingold (D-Wis)]

If Al Gore had stolen the election instead of Bush Enron would still be in business and Ken Lay would still be flying high.

I'm only half-joking.

Tho it saddens me to say, I think you are on to something.

[Isaac Bartram]

SecondGuesser at May 25, 2006 10:03 PM

Big business is usually only a problem when it is in league with government. Of course, that is not at all unusual.

And, of course, politicians never help out big business for the benefit off their rich cronies. No, it's always to save the workers' jobs or to enhance the regional economy.
Remember, IT'S ALWAYS FOR THE PEOPLE!!

[Creech]

Even though these scumbags stole from Enron, etc., wasn't there a viable business left? Was it necessary to destroy Enron in order to prosecute a few crooks?

[Isaac Bartram]

Creech

I believe that Enron's viable divisions were sold off to raise money to satisfy creditors.

And I believe that the remainder is still operating but at a much reduced level.

But unfortunately most of Enron was a paper construct of media promotion and political patronage that could not survive the final revelations of the truth about its nature.