Creating traditions of free trade, property rights, and entrepreneurship in an impoverished continent, often amid lethal tribal and religious conflict, will take decades to achieve. But it is the only way to throw off the yoke of foreign aid.
It was only a matter of time before the Feds realized that political capital could be created from the Enron mess. The Federal Energy Regulatory Commission is now investigating all electricity sellers for evidence of pricing schemes employed during California’s energy crisis. In true Soviet-like fashion, the FERC has issued a deadline by which suspected firms must “admit or deny” their complicity in engaging in spurious pricing schemes during the time period.
Proponents of socially responsible investing, or SRI, promote it as a way to invest in stocks while having "positive social impact" at the same time. Beneath the surface, everyone knows that what SRI really promotes is old-fashioned socialist ideology employed in the name of investment.
According to Ludwig von Mises, socialism was doomed to failure because the lack of private property, plus the absence of a profit and loss system, meant that accurate economic calculation would be impossible in those regimes. Instead of order, there would be chaos--something that was borne out time and again as we witnessed the poor performances of socialist economies.
What may be the more important factor in manufacturing future Enrons is the role of government in fostering the boom-bust cycle. Enron, then, is just one casualty of many--albeit the largest so far--of massive credit expansion and of manipulation of interest rates by the central bank.
Hey, accountants are people, too, and they're not very happy ones these days. Arthur Andersen’s accountants--not unjustifiably--think that they are unfairly being made the scapegoats for much of Enron’s unreported sins, and the consequences could be devastating for the accounting concern’s survival.
A quarter century ago, there was a gasoline crisis--caused more by gasoline price controls than OPEC--which convinced Congress that Americans were not competent to make their own automotive choices. Thus, CAFE standards were born. They were intended to force us to get better mileage by imposing harsh penalties on any automaker whose fleet did not meet rising fuel economy standards. The Senate rejected an increase but what about existing rules?
Sometimes government agencies make mistakes and foist a project on us that does more harm than good. In the South, one doesn’t have to go far to see evidence of one of the more pervasive and persistent errors of the Soil Conservation Service—kudzu.
Opponents of the market say we have to stop another Enron from happening again. Yet all the government's watchdog agencies completely missed Enron. The system of cronyism in Washington, D.C., made the debacle possible and made it harder for the public to find out what was going on. Existing laws will put Enron executives behind bars, but they won't touch any of Enron's accomplices in Washington.
New York Times columnist Paul Krugman and others who claim that the Enron scandal will be a watershed for regulation miss the point. Government regulation already dominates our economic landscape. Tossing on a few more rules might do damage, but it will not prevent fraud from occurring in the future.
