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Sox was passed in response to Enron. While that may have been a big failure, it had no effect on the wider economy. In fact Enrons scandal only came out after t

Sox was passed in response to Enron. While that may have been a big failure, it had no effect on the wider economy. In fact Enrons scandal only came out after the 2001 recession ended... the economy grew during and after Enron’s failure.

phs318u 7y ago
Should the government have waited for another half a dozen “Enrons” before acting? The whole point of regulation is to avoid such occurrences not as an “I told you so”
- MiscIdeaMaker99 7y ago
  Oh, there were. Tyco International Adelphia Peregrine Systems WorldCom (which was a big one) And there were many more.
yardie 7y ago
And how much time lapsed between identifying the problem, notification, committee meetings, proposal, final draft, voting, and enforcement?
- deleted 7y ago
  [deleted]
adamc 7y ago
Destroyed the pensions of many people, though.
- lozenge 7y ago
  Why are Americans invested in their own employer? It serms excessively correlated. My company pays my pension into index funds.
  - bm1362 7y ago
    Hedge funds bought shares because of the cooked books and unreal returns.
  - zerkten 7y ago
    This has changed for many large US companies when it comes to their 401k plans which are often the main vehicle for retirement savings (https://www.thestreet.com/story/13151412/1/how-your-retirement-plan-is-changing-because-of-enron-supreme-court.html https://www.thestreet.com/story/13151412/1/how-your-retireme...). There are still many opportunities for a poorly balanced portfolio.
  - 0x8BADF00D 7y ago
    Many are too lazy to do the research, and sadly, many lack basic financial literacy.
peanutgal2600 7y ago
How much business was lost through the two summers of rotating brown-outs? Datacenter outages? Maybe Enron didn't impact America, but thanks to America's pro-business, anti-consumer laws, Enron really hurt California.
digitaltrees 7y ago
What are you talking about. It was a massive drag on the California economy while they existed. They were literally shutting the power system for millions of people down to jack the price.
- stretchwithme 7y ago
  That was more a failure of the artificially constructed electricity market. It didn't allow longterm contracts. Weirdly enough, cities that had their own power companies could have such contracts and didn't get rolling blackouts. I worked in Santa Clara at the time and lived in Sunnyvale. We never lost power at work but frequently found all the clocks flashing when I got home. Which sort of suggests that centralization is the problem, not public versus private. We had a private company failing and public power companies unperturbed.
  - sterlind 7y ago
    my knowledge comes entirely from the documentary, but iirc Enron both created the energy market, allowing energy futures to be daytraded for the first time, and manipulated the market with bidding. the market itself was a massively cool idea, it's just that Enron had a massive conflict of interest and played both sides. they should have stuck to being a market maker and spun off their trading arm.
  - digitaltrees 7y ago
    Yet some how the same regulated market didn’t experience the same problems after their bankruptcy? Come on, you’re really stretching here when there is an obvious answer. You seem to be looking to blame centralization to fit a preconceived normative view of economics rather than just acknowledging maybe markets were not effective or efficient in this particular instance and in fact suffered a massive distortion specifically because a decentralized profit motive allowed one party to abuse market making mechanisms and hijack the price setting function so crucial to efficiency.
    - stretchwithme 7y ago

phs318u 7y ago

Should the government have waited for another half a dozen “Enrons” before acting? The whole point of regulation is to avoid such occurrences not as an “I told you so”

MiscIdeaMaker99 7y ago
Oh, there were. Tyco International Adelphia Peregrine Systems WorldCom (which was a big one) And there were many more.

yardie 7y ago

And how much time lapsed between identifying the problem, notification, committee meetings, proposal, final draft, voting, and enforcement?

deleted 7y ago
[deleted]

adamc 7y ago

Destroyed the pensions of many people, though.

lozenge 7y ago
Why are Americans invested in their own employer? It serms excessively correlated. My company pays my pension into index funds.
- bm1362 7y ago
  Hedge funds bought shares because of the cooked books and unreal returns.
- zerkten 7y ago
  This has changed for many large US companies when it comes to their 401k plans which are often the main vehicle for retirement savings (https://www.thestreet.com/story/13151412/1/how-your-retirement-plan-is-changing-because-of-enron-supreme-court.html https://www.thestreet.com/story/13151412/1/how-your-retireme...). There are still many opportunities for a poorly balanced portfolio.
- 0x8BADF00D 7y ago
  Many are too lazy to do the research, and sadly, many lack basic financial literacy.

peanutgal2600 7y ago

How much business was lost through the two summers of rotating brown-outs? Datacenter outages? Maybe Enron didn't impact America, but thanks to America's pro-business, anti-consumer laws, Enron really hurt California.

digitaltrees 7y ago

What are you talking about. It was a massive drag on the California economy while they existed. They were literally shutting the power system for millions of people down to jack the price.

stretchwithme 7y ago
That was more a failure of the artificially constructed electricity market. It didn't allow longterm contracts. Weirdly enough, cities that had their own power companies could have such contracts and didn't get rolling blackouts. I worked in Santa Clara at the time and lived in Sunnyvale. We never lost power at work but frequently found all the clocks flashing when I got home. Which sort of suggests that centralization is the problem, not public versus private. We had a private company failing and public power companies unperturbed.
- sterlind 7y ago
  my knowledge comes entirely from the documentary, but iirc Enron both created the energy market, allowing energy futures to be daytraded for the first time, and manipulated the market with bidding. the market itself was a massively cool idea, it's just that Enron had a massive conflict of interest and played both sides. they should have stuck to being a market maker and spun off their trading arm.
- digitaltrees 7y ago
  Yet some how the same regulated market didn’t experience the same problems after their bankruptcy? Come on, you’re really stretching here when there is an obvious answer. You seem to be looking to blame centralization to fit a preconceived normative view of economics rather than just acknowledging maybe markets were not effective or efficient in this particular instance and in fact suffered a massive distortion specifically because a decentralized profit motive allowed one party to abuse market making mechanisms and hijack the price setting function so crucial to efficiency.
  - stretchwithme 7y ago