ericwelch's review against another edition
4.0
Update: My wife and I just finished watching Enron: [b:The Smartest Guys in the Room|113576|The Smartest Guys in the Room The Amazing Rise and Scandalous Fall of Enron|Bethany McLean|http://photo.goodreads.com/books/1171679587s/113576.jpg|1604], an excellent documentary made in 2005. I recommend it highly, especially as many of the seeds of the current economic crisis were apparent in the machinations of the Enron boys. The parallels are uncanny.
Ken Lay was the product of a very religious background in a small Midwestern town. During work on his PhD in economics, he became enamored of the world of stocks. He parlayed InterNorth, a small energy company into Enron. He was a rich man, having made $4 million in stock value increases from the merger of Houston Gas into InterNorth, later renamed Enron. He was also the highest paid CEO in the United States. The company's strengths were also its weakness: the constant risk-taking; the high debt load to ward off potential takeovers; "impassioned embrace of deregulation;" constant reorganization; and instant adoption of the hottest new business ideas. They were soon struggling for cash.
In the meantime, Lay had created a new culture at Enron. It was his belief that all one had to do was hire the best and the brightest, provide a free environment, and things would take care of themselves. He also had trouble saying no to anyone. He hired an old friend to be the "bad guy," but it soon became apparent to all that if you made money for the company you could get whatever you wanted.
Watkins was hailed in 2001, following the collapse of Enron, as a heroine for her "whistle-blowing." Whether her actions actually constitute that appellation is open to question. Certainly she was an insider, and her account reveals a great deal more of the financial shenanigans in greater detail than the previous book I reviewed, Anatomy of Greed. She interacted constantly with Lay, Skilling and Fastow, and if she got really nervous about what she was seeing, perhaps whistle-blowing was just a way of protecting her posterior.
What started out as a new paradigm, a different way of delivering energy, soon became a case of the blind leading the blind, or a corporate version of Dumb and Dumber, as the board and Enron employees began creating numerous new ways of hiding losses, even making losses look like revenue. It was a huge, ever-increasing house of cards.
Watkins is an accountant and naturally had a strong sense of the financial improprieties the company had embarked upon, but the impending doom she warned of in her now-famous memo to Lay should have been obvious to everyone. Enron's own head of research said presciently, "Every era gets the clowns it deserves."
If they ever make a movie of this book, it will have to be a comedy. It is astonishing how stupid many of the "best and brightest" graduates of American business schools were, as they bellied up to the trough of corporate greed. Sherron made an attempt to meet with Ken Lay, but first she had to convince his personal secretary to arrange a meeting. The secretary informed Watkins that "Ken gravitates toward good news. . . ." It did not bode well for the meeting. Another insider told her to make the presentation as simple as possible and eliminate any accounting jargon. She obliged and reworked her presentation so that her two-year-old daughter could understand it. The meeting was a flop, and it was clear to her that Lay could not understand - or perhaps did not want to understand - a thing she was talking about.
Ironically, Osama Bin Laden's exploits barely dented the US economy. Lay's machinations and the subsequent stock free fall provided a vicious slambang.
Ken Lay was the product of a very religious background in a small Midwestern town. During work on his PhD in economics, he became enamored of the world of stocks. He parlayed InterNorth, a small energy company into Enron. He was a rich man, having made $4 million in stock value increases from the merger of Houston Gas into InterNorth, later renamed Enron. He was also the highest paid CEO in the United States. The company's strengths were also its weakness: the constant risk-taking; the high debt load to ward off potential takeovers; "impassioned embrace of deregulation;" constant reorganization; and instant adoption of the hottest new business ideas. They were soon struggling for cash.
In the meantime, Lay had created a new culture at Enron. It was his belief that all one had to do was hire the best and the brightest, provide a free environment, and things would take care of themselves. He also had trouble saying no to anyone. He hired an old friend to be the "bad guy," but it soon became apparent to all that if you made money for the company you could get whatever you wanted.
Watkins was hailed in 2001, following the collapse of Enron, as a heroine for her "whistle-blowing." Whether her actions actually constitute that appellation is open to question. Certainly she was an insider, and her account reveals a great deal more of the financial shenanigans in greater detail than the previous book I reviewed, Anatomy of Greed. She interacted constantly with Lay, Skilling and Fastow, and if she got really nervous about what she was seeing, perhaps whistle-blowing was just a way of protecting her posterior.
What started out as a new paradigm, a different way of delivering energy, soon became a case of the blind leading the blind, or a corporate version of Dumb and Dumber, as the board and Enron employees began creating numerous new ways of hiding losses, even making losses look like revenue. It was a huge, ever-increasing house of cards.
Watkins is an accountant and naturally had a strong sense of the financial improprieties the company had embarked upon, but the impending doom she warned of in her now-famous memo to Lay should have been obvious to everyone. Enron's own head of research said presciently, "Every era gets the clowns it deserves."
If they ever make a movie of this book, it will have to be a comedy. It is astonishing how stupid many of the "best and brightest" graduates of American business schools were, as they bellied up to the trough of corporate greed. Sherron made an attempt to meet with Ken Lay, but first she had to convince his personal secretary to arrange a meeting. The secretary informed Watkins that "Ken gravitates toward good news. . . ." It did not bode well for the meeting. Another insider told her to make the presentation as simple as possible and eliminate any accounting jargon. She obliged and reworked her presentation so that her two-year-old daughter could understand it. The meeting was a flop, and it was clear to her that Lay could not understand - or perhaps did not want to understand - a thing she was talking about.
Ironically, Osama Bin Laden's exploits barely dented the US economy. Lay's machinations and the subsequent stock free fall provided a vicious slambang.
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