The Cost, er, Genius of Capitalism

Scott Thill

"People get to make good decisions or bad decisions, and they get to pay the consequences or to enjoy the fruits of their decisions. That's the way the system works . . . Companies come and go. It's part of the genius of capitalism." -- U.S Treasury Secretary Paul O'Neill

Leave it to the man paid $50,000 by Enron and hired by President Bush to oversee the way the country traverses its money trails to offer a sobering analysis of the energy scandal that has so far cost employees billions, states millions, the market even more, and at least one life -- that of J. Clifford Baxter, who was found the morning of January 25 with a bullet in his head, a gun and a suicide note at his side. Baxter's version of Texas justice is not the kind you will see on television, but it too is part of the "genius" of capitalism that O'Neill is referring to. In fact, it is a fitting metaphor for everything that Enron -- and the Bush administration -- stands for: dirty free market suicide.

Although Clifford is the one with the hole in his head, the peons at Enron are still the ones with the holes in their 401Ks, their retirement accounts, indeed, their pockets. And the anti-Midas touch of Enron's "bad decisions" will surely taint many more lives to come, most notably the slew of sycophantic media outlets and members, the Third World countries that rely on Enron's power dispersal (India, anyone?) and the Bush administration, which contains at least fourteen cabinet members who owned Enron stock in 2001, and countless others that have received contributions that without a doubt clouded their ability to either be relied upon to make objective decisions about the fate of the energy trading giant or make any decision at all.

Isn't recusing onself from the most important corporate scandal in the history of America tantamount to an admittance of guilt? (AP Photo)

Such as the country's primary agent in matters of graft and corruption of all stripes, the cheerless Attorney General John Ashcroft, who has recused himself from the case because he took money from Enron during his election run -- which he lost, of course, being about as objective of the law and justice as Enron CEO Kenneth Lay was about his company's solvency a scant few weeks before its fabled nosedive. Ashcroft's refusal to spearhead the investigation might seem like an honorable deferral (you know, so things can be fair and all) but it is closer to an admittance of failure than anything else, as well as a clever way to separate himself, as has the entire administration at this point, from Enron's rampant corruption. I call it an admittance of failure because this is precisely the job Ashcroft was hired to do: ferret out corruption, levy serious penalties, bring the hammer down on buddy and criminal alike no matter what the circumstances may prescribe.

And he quit, choked, and failed when it really mattered. He might as well admit he was on the take, too.

Like, say, the entire U.S. Attorney's office in Houston, which took itself off the case, citing a conflict of interest. That's becoming the chosen euphemism for "on the payroll" these days. And let's not forget about Ashcroft's replacement, Deputy Attorney General Larry Thompson, who during previous stint with the law firm, King & Spalding, has done some major work for Enron in the past. That's quite a pill to swallow when you consider that, according to the Associated Press, of the 248 senators and members of the House of Representatives on 11 congressional committees investigating the firm, 212 received donations from either Enron or its partner in document shredding, the pathetic Arthur Andersen accounting firm. And while you are crunching those numbers, try these ones, as well: 43 of the 57 members of the House Energy and Commerce Committee have received cash from Enron, while 52 of them received donations from Arthur Andersen. If those people can do their job with a clear conscience, what's Ashcroft's problem?

They can't, of course, and they probably won't.

Pardon me while I nervously adjust my tie. Kenneth Lay stands to walk away with $51 million in severance. We should all resign so comfortably. (Reuters)

All of this just goes to show, as O'Neill presciently stated -- although he probably had no idea of it -- how quickly the genius of capitalism reveals its naked associations and corrupt strands when the shit hits the fan. Capitalism is one long money trail and anyone with a critical eye can eventually find it and pick up the scent of all the whores on the payroll. And no one escapes, unless we let them -- which we usually do. Which is the real problem.

It's enough to say that J. Clifford Baxter's death points out just how deeply ingrained a unconscionable corporate scam that took advantage of the blood, sweat and tears of those who really made the wheels turn -- the common employees, not the execs who are usually just busy screwing them over for fat paychecks -- can exact its own particular brand of vengeance. We get to see humanity's callous, desperate, and/or malicious side when it all comes crumbling down.

Take Kenneth Lay, for example, who stands to - on paper, at least - sneak off with millions of dollars in severance pay, and this is after he has already nabbed over $200 million since 1999. This is a guy who was borrowing money from the company -- millions at a time -- and collateralizing his loan with his own Enron stock, a shady accounting practice that only hints at the greater corruption residing in the tons of shredded paper littering the various bins in the alley behind Arthur Andersen as we speak. Forget that this method is one way of jerking the money from place to place without ever really depreciating the stock's value -- the greater question is, where did all that money go?

We might want to ask the same question of Bush appointee to the Secretary of the Army, Thomas White, who was raking in millions of dollars -- which don't come cheap we might remind everyone -- having previously served as a Vice-Chairman of Enron. White was so awash in Enron money that it is hard to believe that he would have left such a lucrative post to work for a paltry government pittance -- unless one realizes that when he left Enron, having pocketed a nice million dollar severance package, he had at least $100 million in stock that no one knows what happened to. It would be hard top believe that such a savvy businessman (that's right, he's Secretary of the Army!) would jump a laden ship for a sinking one: in fact, it may turn out to be exactly the opposite.

Next: "Galbraith's condensation of American capitalism as Enron and O'Neill has illustrated it is both sweeping and inclusive. And, therefore, its genius seems to usually extract equal parts money and blood so far."