The Clusterfuck Nation Chronicle

Commentary on the Flux of Events

What fascinates me about the Enron catastrophe is how it is a perfect metaphor to describe the larger American economy. A few sharpies get together and take a boring old economy gas pipeline company -- which actually did real things like move boring natural gas from wells in one part of North America to customers in other parts of North America -- and they transform that boring company into a sexy, "innovative," new economy, financial-and-information services company, and they borrow huge sums of money from formerly reputable investment banks like JP Morgan, and they assign that borrowed money to mysterious categories (subsidiary companies), and they gamble it on monetary spreads (hedges, arbitrages), and they broker imagined commodities (weather, broadband assignments), and they create an impression of tremendous business activity, driving up the share price their stock, which, once elevated, they reward their executives with, which, at the stock's height the executives all cash in on, and the board of directors, and the company's auditors, and the securities analysts, and the institutional monitors (SEC, etc), all go along with the idea that this is a real company doing real things -- and then the whole hallucinated structure dissolves in a mass of bankruptcy, recrimination, and personal financial ruin.

That's called a clusterfuck, and that's what the rest of our economy is like, too.