Don't blame the Bush administration for Enron

Posted: Jan 16, 2002 12:00 AM
Ken Lay should be handcuffed to a basement radiator next to a half-starved wolverine. The cadre of cash-outers from Enron's executive ranks should be forced to watch Bette Midler's "Beaches" with their eyelids propped open, like the guy from "A Clockwork Orange," for the rest of their lives. Anyone who says Enron without scowling should be publicly flogged with bamboo rods by bands of righteous citizens. OK? Have I sufficiently denounced Enron? Am I on the record saying that what these guys did was wrong? Good. The last thing I want to do is seem soft on the most despised institution in America. These days, to paraphrase President Bush's pronouncements about the war on terror, if you're not against Enron, you're with them. When such staunch conservatives and free marketers as George Will and Larry Kudlow feel the need to condemn a poster company of deregulation and the free market, you know that company is in trouble. So now that I've gotten that out of the way, let me say something that strays off the reservation of all this populist correctness: There is a lot -- and I mean a lot -- of good news in the Enron collapse. First of all, contrary to what the press and many Democrats would have you believe, the Bush administration did everything right. The only accusation opponents of the administration can make is guilt by association. That doesn't mean we won't learn something new that changes that impression. But, to date, there is no evidence whatsoever that the Bushies did anything improper -- and there is ample evidence they did everything right. Paul O'Neill, the secretary of the treasury and a former corporate bigwig himself, was asked for help by Enron, the most deep-pocketed and dedicated backer of George W. Bush's career. O'Neill said no. Enron reached out to the secretary of commerce, Don Evans, the president's former campaign chairman (i.e. the guy who took Enron's checks to the bank), and Evans said, can't help ya. In fact, so far, the only evidence of a political figure doing anything improper, though hardly illegal, concerns President Clinton's former treasury secretary, Robert Rubin. Now a top pooh-bah at Citigroup, Rubin asked Deputy Treasury Secretary Peter Fisher, a Clinton holdover, to help prop up Enron. Rubin began the phone call by saying his lobbying "might not be the best idea." I'm sure Rubin is more confident that it wasn't a good idea now. But the fact remains: The system worked. Despite all of Enron's money and access, and the caterwauling lamentations of the campaign finance "reformers," the administration let nature take its course. We still don't know that any crimes were committed by Enron's management, but that's certainly being investigated. John Ashcroft immediately recused himself from the criminal probe, because he'd received money from Enron as a senator. He didn't wait for indignant demands from The New York Times or Congress to do it. And, speaking of Congress, there are six separate investigations into the failure of Enron, several led or egged on by Democrats who took money from Enron, too. There's no sign that that money will do anything but provide motivation for these politicians to be extra hard -- not extra easy -- on the failed company and its possibly criminal executives. Of course, the hypocrisy of Democrats and some pundits who want to beat up the administration for being "too cozy" with Enron and at the same time want to denounce the administration for not "saving" the company when Enron reached out for help is stunning. But such accusations, like bile, are a byproduct of a healthy democracy. Similarly, the occasional failure of an enterprise is a necessary ingredient of healthy capitalist system. George Will recently wrote that Enron's failure should "remind everyone -- some conservatives, painfully -- that a mature capitalist economy is a government project. A properly functioning free market system does not spring spontaneously from society's soil as dandelions spring from suburban lawns." "Rather," Will observed, "it is a complex creation of laws and mores that guarantee, among much else, transparency, meaning a sufficient stream -- torrent, really -- of reliable information about the condition and conduct of corporations." Fair enough. But Will also knows that the market must be informed that criminal behavior or dishonest tactics will not be rewarded or long countenanced - by the government or the market. If this White House had decided Enron was "too big to fail," as previous administrations had done for various corporations (Chrysler, the S&Ls and Long Term Capital Management come to mind), it's entirely possible that Enron would not be the cautionary tale it is today. We would not be screaming for scalps, and other companies -- and their accountants -- would feel much freer to cut corners. Instead, they are all saying, "We don't want to be another Enron" or "another Arthur Andersen." Edmund Burke, the father of modern conservatism, once noted, "Example is the school of mankind, and they will learn at no other." It is a painful lesson for liberals, and apparently some conservatives, that painful lessons are vital to a mature capitalist economy as well.