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"Enron: The Smartest Guys in the Room"

Your responses to “Enron: The Smartest Guys in the Room”

The Econ Extra Credit Team Sep 30, 2021
Heard on:

Unethical, greedy, immoral, selfish, dishonest, appalling, evil. The tale of an energy titan that deceived investors and regulators, devastating its workers’ livelihoods in the process, evoked these strong responses from our listeners — even 20 years later.

“Enron: The Smartest Guys in the Room” showed us how tens of thousands of employees lost their jobs and $2 billion in retirement funds. Before filing for bankruptcy in 2001, Enron paid out a whopping $745 million in cash and stock to senior executives. And former CEO Jeffrey Skilling, who served 12 years in prison, recently launched an energy investment venture.

Enron’s complicated legacy doesn’t end there. You can read or listen to David Brancaccio in conversation with The Wall Street Journal’s Jason Zweig on what the saga taught us about investing and with The Economist’s Vijay Vaitheeswaran on echoes of Enron’s energy deregulation in California and Texas today.

One of our listeners, Carrie, expressed frustration with Skilling’s seeming rebound.

“It makes me so mad that all the top people in the firm walked away with millions mostly funded by everyday people trying to make a living (i.e. Californians paying high electric bills, lost pensions, etc.) Then I read that Jeff Skilling is now out of prison and back at doing essentially the same line of work. Unbelievable that we allow this as a society.”

Listener Lyn C. pointed out that workers, not executives, are the backbone of the economy.

“There will always be foolish people, dishonest people and greedy people. The people who make the economy work are the workers. If you don’t protect them, there will be societal collapse. We have to ensure safe investments to grow industries and create jobs for those workers. More transparency is needed, along with clearer guidelines.”

Joyce C. recalls meeting former Enron employees and seeing the toll it took on them.

“When I moved to Houston 12 years ago, I often met people who had worked at Enron and heard their anger. I attended a seminar with [former Enron Chief Financial Officer] Andy Fastow shortly after he was released from jail; he was apologetic to the angry crowd but insisted that he had done nothing illegal, although he knew it was unethical and immoral. Until then, I had not appreciated the depth of the impact Enron had on the community. Yesterday I mentioned the film to someone who had worked there, and saw an angry reaction — even 20 years later. This film is a case for every business school course on business practices.”

And S. Cama pointed out that “smart” was ultimately not the best descriptor for Enron’s top execs.

“It was pure selfish motivation with a lack of any concern for the welfare of others — whether the employees, shareholders, and the general public at large, all of whom suffered. It should be called, ‘Enron: The Most Greedy Guys in the Room.’ It was very telling that so many in a position of power (whether auditing, regulator or compliance) who had an inkling that something wasn’t quite right still rubber stamped it or did nothing when they knew what was happening didn’t pass the sniff test. Enron was a harbinger for AIG, Bernie Madoff, and even the housing crisis. Good people doing nothing is what allows deception and evil to flourish. Shameful!”

Thanks for watching along with us. Got a documentary recommendation you’d like us to consider? Email us at extracredit@marketplace.org. We’ll be back next week with our October selection.

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