The collapse of the Enron Corporation was first greeted by the Bush administration and big business commentators as just another company going bust; part and parcel of the ups and downs of the free market economy. As more information about Enron’s business practices emerged, the wider implications and significance of the energy company’s fall began to receive some commentary in the press.
Enron workers, their families, investors, and creditorswere all kept in the dark. Over 4,000 employees were laid off with many losing their life savings. Some had over twenty years of loyal employment with the company. They had the majority of their 401(k) pension funds in company stock. 15,000 Enron employees lost $1.3 billion of the $2.1 billion that was in the company’s 401(k) plan a year ago (NY Times 1/20/02). Unlike the company’s executives, they were barred from selling their Enron stock. Other state and trade union pension funds were also hit as a result of Enron’s collapse, including the Massachusetts State Pension Fund. Overall, more than $1.5 billion has been wiped out from these pension funds.
Enron has also been criticized by some as the primary culprit behind the California energy crisis in the Summer of 2000. They are accused of withholding energy supplies to drive up the price of energy to consumers and reaping huge profits as a result. The recent accusations of fraud by Enron claimthat they cooked their booksby setting up other companies or “partnerships” to hide theirs debts, transferring them into these fake companies and keeping them off their books.
The current hearings and investigations may result in the prosecutionof a few top company executives. The responsibility for the Enron collapse does not just lie on their shoulders but on the two main political parties and the system they represent. Three quarters of the US Senate and half of the House of Representatives took Enron campaign contributions. While the Democrats have sought to get some mileage out of Bush’s close friendship with Enron Chairman Kenny ‘Boy’ Lay and Cheney’s secret meetings with Enron bosses, the Democrats’ close ties to Enron are creating a conflict of interest. The Democrats have also received millions of campaign dollars, (legalized bribery) from Enron and voted with the Republicans for the deregulation measures that caused the crisis. Enron spent $345 million in 1999 and 2000 to lobby both political parties for the deregulation of future energy trading (Boston Phoenix 2/15 /02).
US history is full of examples of big business swindles assisted by the two political parties that it finances. The collapse of the Savings and Loans banks in the late 1980s saw both the Democrats and Republicans vote for the deregulation of the industry. When the speculative bubble burst, the Republican Bush Sr. administration with cross party support nationalized the losses by passing on the bill of $315 billion to taxpayers and then handing back the solvent companies to the same swindlers who looted them.
The Enron scandal is not a new phenomena but an old one that is inevitable under capitalism. The contradictions of this system are caused by the tendency of the market to overproduce and the inability of working people worldwide to buy back everything they produce. The resulting decline in the rate of profit with increased competition forces capitalists to look for new ways and short cuts to overcome these inherent contradictions. Speculation on the stock market with finance capital offers quick easy profits for a short time before reality catches up to the casino economy. The policies of globalization, privatization and deregulation allow corporations to plunder and loot with little or no restrictions and results in unemployment, war, terrorism, environmental destruction, and the ruined lives of millions of working people and their families.
Socialists believe that working people need to control their own destinies and lives. To do this we need to take the important first step of building a mass political party that is independent of the interests of big business and that will represent our own interests and needs. The UMB Socialist Club has already held a meeting on the Enron collapse and we have started to organize against the state budget cuts in funding to education and the lay offs, tuition hikes, and the cuts in resources at UMass that have resulted. We hope to help build a broad coalition of student groups, school staff and faculty to campaign on this issue. Contact us at [email protected].
By Seamus WhelanUMB SOCIALIST CLUB SOCIALIST ALTERNATIVE