Category Archives: 2002

1/23/2002 – Enron, Trust, and Malfeasance

Enron, Trust, and Malfeasance

The collapse of energy giant Enron over the last six months has produced a surprising level of outrage especially for a cynic like me.

As this drama continues to unfold, I have been trying to understand how Enron structured their business and made money. Until just last night I was operating on the belief that the cleverness and sophistication of Enron’s managers simply outstripped my analytical skills. But, as I have been following the writing in the NY Times and Wall St. Journal, slowly it has come to me that they don’t understand the maze of structures and deals employed by Enron for years either.

Then, last night, on the Jim Lehrer News Hour on PBS, Paul Solman, one of the regular financial reporters, gave his analysis of what has been going on. After listening to Solman’s report, it is clear that Enron has been engaging in massive deceit, deception, and downright criminal activity for years.

Now, I must admit to some familiarity with the habits and attitudes of managers. I am used to the aggressive behavior of managers trying to stretch the accounting systems to make the most recent quarter look good. In fact, I have participated in such activities. But, Enron has engaged in a long-term shell game aided and abetted by its accounting firm, Arthur Andersen, LLC. The failure of the government (the SEC) and more importantly, the audit companies, to provide oversight, transparency, basic facts, and above all the application simple commonsense ethics to a huge company’s activities is outrageous. It undermines the credibility of the economy. If Arthur Andersen, one of the oldest and most prestigious audit firms can be so blind over so many years, what are we to make of their, and other audit firms’ reliability for oversight of all the other firms so many of us hold in our 401K funds?

It will be interesting to see how the government and the financial institutions of capitalism react to this. It is a basic tenant of the capital and equity markets that timely, transparent information is essential not only to the best and highest use of our capital resources, but also to the maintenance of trust in a reasonably fair play space.

1/24/2002 – Long Live Marmite

“Long Live Marmite! Only the British Could Love It”

from the New York Times January 24, 2002:

from a page A4 article “Burton-on-Trent Journal: Long Live Marmite! Only the British Could Love It”

“Being British, the company has had an appreciation of the public’s divided loyalties between those who find Marmite revolting and those who think it sublime.

One campaign, a television ad exploiting the product’s notoriety for producing bad breath, showed a woman excusing herself from a sofa clutch with her boyfriend and running into the kitchen to have a quick bite of Marmite. She returns, they kiss, and the final scene shows the woman alone while the man is heard throwing up in the toilet.”

1/15/2002 – “Sophie Ristelhueber: Details of the World” at MFA

“Sophie Ristelhueber: Details of the World”

October 2,  2001 – January 21, 2002 at the Museum of Fine Arts, Boston, MA

Karen and I saw a few of Ms. Ristelhueber’s photographs a couple of years ago at the Museum of Modern Art (New York). They were part of MOMA’s annual New Photography selections. We were struck then by the power of her work.

The current exhibit at the MFA includes “Fait”, 71 approximately 4 ft x 4 ft photographs taken in the deserts of Kuwait shortly after the end of the “Desert Storm” war. Some are taken from a helicopter and others are at ground level. All are intensely detailed but in some strange way quite abstract in their impact. This is accentuated in the exhibition by the juxtaposition of aerial and close-ups so that at first glance one can not be sure which is which. This is the scene of modern warfare.

Another series of photographs entitled” Beirut” are 31 small black and white photographs of a streetscape in war torn Beirut. Another confrontation with the results of war.

There is more here in this extensive exhibit. We highly recommend it.

Every One, #3, 1994 Black and white photograph mounted on fiberboard 106 x 71 inches, unique installation at the Centraal Museum, Utrecht.

(Picture to left and text description above borrowed from MFA web site 01/15/02)

 

1/15/02

Whose Opinion (Advice) Is This?

Whose Opinion (Advice) Is This?

The Problem

At a time when we are quite aware of the need for and value of transparency in the reporting of the activities of corporations (thanks most recently to the Enron affair), we could quite usefully extend this transparency metaphor to other parts of day-to-day life. The print press, TV, radio, and internet are filled with opinions and advice from all sorts of people. Many of these pass for expert status just based on affiliation with universities, institutes, and think tanks.

Increasingly we must ask ourselves, “whose opinion is this?” Who is being served by the expertise?

Although many in the academic and chic cultural world (not to mention the various right-wing types in political and religious quarters) may think that relativism is the creation of post-WWII French philosophy, most of the rest of the world knows full well that “truth” is in fact relative, that is, relative to who is paying. No surprise, the “experts” know this too, and regularly seek to hide or obscure who is paying. Now, even the pinnacle of prestige in the medical world, The New England Journal of Medicine, has had to strengthen its guidelines that seek to separate research performed at arms length from the pharmaceutical/medical industrial complex from that more directly controlled.

A Step Towards a Solution

What can we do to provide a substantial increase in the transparency of our information sources while keeping things simple?

We should begin to demand that every expert, commentator, think tank institute, or university laboratory reveal the sources of 80% of the funds supporting its research/organizational activities. In the vast majority of case the list of sources will not exceed three or four. This protocol will provide a revealing base of background information without substantial burdens.

A Caveat

Although the protocol proposed here will increase the transparency of our sources of information, it will not relieve us of the work of making sense out of the data and theories presented in any given situation. Just because a given piece of research is funded by “bad people” does not mean that the data is not meaningful and the analysis correct.