Reading The Smartest Guys in the Room has forced me to acknowledge that our world is not as honest as I once thought. I remember about 2 years ago when I took a tour of the NY Stock Exchange a broker said to me personally, “times have changed… there is just not as much trust anymore.” I liked to believe that he was wrong—however, I figured even if he was right, and people were not trustworthy, the government would force them to maintain some level of truth. The government had full control and operated very effectively. I am increasingly disconcerted about what I hear in the news regarding both organizations and the government. Here are a couple of things frustrating me:
The Relationship between Businesses and the Government
Enron is just one of the biggest organizations to fall due to corruptness. There are countless other organizations out there which are as much of a problem as Enron but just do a better job at hiding their malicious practices. According to The Smartest Guys in the Room, “a new ethos was gradually taking hold in corporate America, according to which anything that wasn’t blatantly illegal was therefore okay—no mater how deceptive the practice might be” (McLean and Elkind 133). One reason business entities can get away with some of their practices is due to their relations with the government. Ken Lay used to lecture on the significance of business-government relations, and cared deeply about “politics and government policy, how government could shape markets” (McLean and Elkind 5). He made it one of his top priorities to build a relationship with key political figures. Lay used to pour tons of money into Bush’s political campaigns in attempt to build political influence. He also gave up to $6 million to Republicans and Democrats. Lay “time and again, would tap his growing network: for a job, for a favor” (McLean and Elkind 5). The way we see Lay was able to use the government to better Enron shows that the government does really have a corrupt side that organizations can also become corrupt from. In fact, organizations can use the government to become almost legally corrupt.
The Similarities I see between the Enron’s Style and the Government’s Style
Recently, Obama proposed a stimulus plan that only he really knew the details of because Congress did not have enough time to read it. The bill was 1,071 pages and Congress had one weekend to discuss it and decide on it. Thus, they voted without having deciphered on the intricate details. According to the MSNBC, “[Obama] invited Democratic and Republican leaders to the White House to hear their ideas on the economy, yet [he] didn’t share the plan’s specifics while they visited” (“President says U.S. could ‘lose a generation of potential’ if action isn’t taken”) It seems that no matter how good a plan is, if it’s putting forth $825 billion, everyone should have read it detail for detail. How the government is rushing a plan this big forces me to question its intentions. It seems like they are taking the Skilling approach to go fast, go big, or go home. Those who knew Skilling said, “Once he got his eye on the prize, price was no object” (McLean and Elkind 107). Obama may have a stimulus plan that the market will react happily to today, but not so happily when they realize the serious long-term repercussions of spending $825 billion. However, by the time that the public can see the true effect of the stimulus package, Obama’s term will be up. Does Obama know what the originators at Enron know: “by the time it was clear that the deal had gone south, the originator would have gotten his bonus and moved on” (McLean and Elkind 119)? The stimulus plan may be Obama’s “silver bullet” that he never really needs to be held accountable for. Additionally, do you remember the Skilling theory: “if you hired smart people, it didn’t matter whether they had any experience” (McLean and Elkind 120)? Obama is one of the smartest men in the room for sure, but his experience is not nearly as high as others. Before Obama was elected president, Matt Pearson, the Democratic Party chairman said, “A lot of the people I know say they really like him, but just don’t think it’s his time yet. He could use a little more experience” (“The Big Question about Barack Obama”). Being that we know what happened with Enron, and we know that Obama is less experienced, my only suggestion is maybe we need to take a little more time to read the stimulus plan.
I am not overly interested in politics, but I am very interested in The Smartest Guys in the Room. It seems to me like there are a lot of similarities between how the government operates, and how Enron operated. It also seems like businesses relations with the government can be very detrimental. I am just throwing these two points out to the class because that the purpose of blogs. Be gentle with the comments.