What else can companies and the government hide from the public? Today in class we watched a video about Enron and who was really responsible for its downfall. Throughout the video Enron employees especially Kenneth Lay, Jeffrey Skilling, and Andrew Fastow were questioned and put to the spot to answer this question.
Throughout their reign, Enron managed to grow faster than any company had before, but were doing so in one of the most deceptive ways possible. Enron used an accounting technique known as mark-to-marketing. With this they would actually add profits that were not even there and those who came up with the ideas were paid in millions. Yet the real question remained, where was all this money coming from when the profits really never happened? To the stock holder, and even to the trained analysts, Enron's stock seemed to be skyrocketing at a record speed, but in reality the company was in a massive amount of debt. Before this became known to the public and before everyone saw the stocks begin to decline, the companies top employees pulled their stocks making thousands, and millions of dollars while the others were left to take a massive fall. Although some saw through this scam of deception and lies, they were too afraid to say anything. However, as the scandal became more obvious and as new information was now available to the public it quickly unraveled and was exposed for what it really was.
This story relates directly to the oil crisis occurring today. When the word of an oil crisis first arrived, so few accepted this idea. Although some like Hubbert and others, saw the supply of oil for what it really was, many simply turned the other way and ignored the issue. It was not until in the 1970's when the U.S. reached its peak oil that concern began to spread. Just like with the Enron scandal, no one wanted to really acknowledge the truth. In both cases, the public was being deceived of what was really happening and only a select few professionals, such as the analysts of Enron, and Hubbert with the oil crisis knew the truth, but their opinions were quickly rejected and ignored. As more information became available, more people become aware of the truth and were quicker to agree to the once radical ideas they were so quick to reject before.
Today it is known that what Enron was doing was all really one big scam, and it is greatly known that the petroleum supply is finite, and other means of energy will soon be needed in larger quantites than ever before. In The Party's Over, Heinberg dedicates an entire chapter to what non-petroleum energy source or combination could compensate for the decrease and possible loss of the use of oil. He discusses the possibilities of the uses of natural gas, coal, nuclear power, wind, solar power, hydrogen, hydroelectricity, geothermal power, tides, waves, biomass, biodiesel, and ethanol and the chances they would be able to replace the loss of oil. However, as Heinberg states almost all of these alternates have some sort of a downfall and most likely would not be able to support society the way it is today. " If indeed none of the energy alternatives now available has the near-term potential to "support the high levels of structure and process of our current civilization," then profound changes are virtually inevitable in every sphere of human concern as oil begins to run out. Just what sorts of changes can we expect to see within the next 50 years?" (Heinberg 183-184).
The movie about Enron today really makes me wonder, just how much are we willing to believe simply because someone higher up than us says its true? It is so easy to accept information from people who you believe know what they are talking about but very difficult to obtain the truth for yourself. So what is really going on, and how do we know who to really believe?
The Party's Over-Chapter 4
The Smartest Guys in The Room
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