The Hightower Lowdown
Using cows to explain Enron; dumping nuclear waste in Yucca Mountain; and crying in your champagne at Austin's 360 Summit.
Enron's Ponzi Scheme
So much Enron, so little time.
Like a stunning Fourth of July fireworks display, this corporate firecracker keeps lighting up the sky with new revelations of its arrogance and avarice, each one more breathtaking than the last. Look, there's yet another top Bush official shooting out of the Enron cluster! Oh, wow, look at Arthur Andersen, Citigroup, and J.P. Morgan exploding from the midst of Enron's firestorm! Ooooo -- who would've thought there could be 3,000 subsidiaries, including 881 secret offshore accounts, hidden in one company!
There's a fun Web site (www.haveagoodlaugh.com) that tries to explain economics in terms of cows. Here's how it describes the inner workings of Enron: "You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so you get all four cows back with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholders who sell the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option to buy one more."
This would be funnier if it was not essentially true. There was no "there" at Enron, and unfortunately Enron is no isolated case. More and more of the global empires like Enron are Ponzi schemes.
Gosh ... I miss the old days. Like 1999. Or 2000, or even early 2001.
Way back then, brand-new high tech companies with names like WhzzBang.com were popping up like popcorn and getting gazillions of dollars in capital from giddy Wall Street investors. The heads of these high-flying firms were getting such massive paychecks that they didn't bother counting the money ... they weighed it. And, of course, since they were so rich, they assumed that they were geniuses, so they began to offer themselves to us lesser mortals as the solvers of all of society's problems.
Back then, we were told that everything from poverty to pollution could be dealt with if only government would get out of the way and let these "new economy" entrepreneurs apply their genius. Of course, Enron stock was selling at $90 a share back then, too, so many of these geniuses were nothing but self-inflated egos who were sipping their own bath water and telling us it was champagne.
One of the self-congratulatory forums for all this high tech hubris is held annually here in Austin, where these so-called "masters of the universe" gather to solve everything. It's called the "360 Summit," and all the big dogs of dot-comism come floating in on private jets, limousines, and pure arrogance, putting on an extravagant show, sipping champagne, munching caviar-on-toast, and holding seminars with such titles as "Who wants to be a millionaire?"
Ahh, but those were the old days. This year, the 360 Summit was a lot more somber than celebratory. How somber? Instead of caviar, the opening lunch was meatloaf. Outside the hotel ballroom you could buy discounted mousepads, coffee mugs, and other products with the logos of Agillion, Garden.com, and Point One -- former hosts of the "360 Summit" that are now, alas, bankrupt.
Whenever the Powers That Be start claiming that a bunch of corporate elites are going to solve society's problems, let's see if they can solve their own little problems first.
Jim Hightower's latest book, If the Gods Had Meant Us to Vote They Would Have Given Us Candidates, is available in a fully revised and updated paperback edition.