The trouble with speaking generally on the US financial crisis and corruption in big business is that general arguments are easy to refute. I can talk generally about corruption at the top of many corporations, but it's easy for someone to reply, "corporations are the ones who make jobs" and "you're stereotyping all big businesses as corrupt."
In other words, it's necessary to get into specifics. How are certain businesses corrupt, what connections do they use to fuel their corruption, and what laws do they break?
Enron: The Smartest Guys in the Room does just that, going into Enron's history to tell us about the men (and a couple of women) who built the famous company from nothing only to destroy it with greed and arrogance.
It's an astonishing story. The book prints notes written from the government to Enron's CEO that read, "Please keep making us millions." It tells how Enron manipulated energy in California, treating the situation as a giant game while millions went without power and hundreds lost their jobs. Most importantly, it reveals how Enron cooked its books to look legitimate even as it lost money and made horrible deals that bankrupted the company.
It also tells readers about those in charge of Enron, and the level of delusion they shared is remarkable. These are people who believed an idea was the most precious thing, even if it lost money, and so they destroyed honest, money-making businesses to make way for increasingly crooked schemes, patting themselves on the back for their brilliance as they went. Even as Enron collapsed they couldn't see the truth, because they were so convinced of their own infallibility, and the stupidity of everyone else. Even after being caught no one at Enron seemed to understand that they were in big trouble. Didn't everyone yelling at them get how important and special they were?
Smartest Guys in the Room is a gripping read, with the exception of two chapters that are devoted to breaking down the economics of crooked Enron deals and cooked books. However, said two chapters will probably be more interesting to people with a greater head for numbers than I have, and I understand why those chapters were necessary. As I said above, it's not good enough to say "Enron was corrupt" and leave it at that. If people don't know how Enron and their collaborators stole so much money, how can anyone make a good argument about corruption on Wall Street or weaknesses in the justice system? That McLean and Elkind managed to shove all the boring facts into just a couple chapters and make everything else so fascinating is testament to their talent as writers.
Enron: The Smartest Guys in the Room is a good read for just about anyone interested in real life crime drama or economics. Bethany McLean recently followed it with All the Devils Are Here which examines the financial crises and the personalities that helped it happen. If it's as interesting as this one, I look forward to it.
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