People's Democracy

THERE is a profound ideological dimension to this crisis: It has exposed the big lie at the heart of so-called "Free Market" capitalism. The big lie that justified deregulation, that the "Free Market" would keep business honest, that the government, as Reagan put it, should butt out and let the genius of the market do what it does best. Enron’s collapse has exposed the hoax behind schemes to privatise Social Security. Bush told us, "Its your money! Why not invest it in the market." You might get rich. But in what sense did Enron workers own those stocks if they couldn’t sell them? The workers toiled to earn those stocks in lieu of a real Enron pension. But Enron executives reserved the right to siphon off that money to cover their "golden parachutes" when the hall of mirrors came crashing down. Behind Bush’s privatisation of Social Security is the plan to loot workers pension funds including both their private accounts and Social Security itself.

Enron’s meltdown lays bare the collision of public interest vs. private profit. Since the administration of Ronald Reagan there has been an assault on everything public, and a drive to privatise public services or publicly owned industries, that could be a source of profits for Wall Street. It has included calls to privatise the public schools, Social Security and Medicare. There is a drive to privatise publicly owned electric utilities and hospitals, to open up federally owned lands to the timber, mining, and energy monopolies.

Enron’s collapse may help tilt the scales against the privatisers and toward public control.

• First, fighters for reforming our electoral system say the only real way to end the corrupting influence of money is to have full public financing of our elections.
• Secondly, the wiping out of Enron 401 (k) accounts will reinforce the demands to preserve and strengthen Social Security and Medicare. The grassroots movement demanding a national health care system and a rescription benefit under Medicare should seize on the Enron debacle as a clear refutation of Bush’s privatization scam.
• Finally, Enron is a gas and electric giant that ripped off energy consumers coast to coast. Already, the grassroots movement that fought this swindle in California, are popularizing public ownership of energy and utility companies as the only real solution.

The Enron crisis presents many opportunities to open a national dialogue on the logic and benefits of socialism. The point is, Enron and a thousand other corporations like it, cannot be reformed. No matter how many laws and regulations Congress enacts—and they should enact them—sooner or later these corporations will be back picking our pockets. Bush’s incestuous "good-ole-boy" relations with Enron now place him in grave danger. A frenzied cover up is in full gear. The shredders are running full tilt at Enron, at Arthur Anderson, and no doubt in the basement of the White House.

What did Bush know and when did he know it? He knew from the beginning. Enron’s Ken Lay was Bush’s favourite CEO, so close that Bush called him "Kenny Boy." Enron poured millions into Bush’s political career starting from his first run for Texas governor in 1994. As Craig McDonald, director of Texans for Public Justice (TPJ) told me in an interview, "Bush was in bed with Enron long before he made his first run for political office." McDonald and TPJ wrote a report, "The Bush Gusher," which exposed Enron’s support of the Bush family. McDonald pointed out that Enron sent their top lawyer, James A Baker, who had served as Senator of State under George Bush senior, on a victory tour of Kuwait in 1993 to line up contracts with the Kuwaiti regime rebuilding after the Gulf War. Lay and Enron executives poured millions into the younger Bush’s presidential election campaign, much of it hidden "soft money." Bush flew on Enron jets to campaign rallies.

When Bush lost the popular vote, they rushed James A. Baker to Florida to orchestrate the stealing of the 2000 presidential election, using the same underhanded tactics they used to hoodwink Enron stockholders. Baker was on CNN nonstop explaining why the Florida votes should not be counted and why the US Supreme Court should choose the president. As a headline in the PWW said, it was "A very American coup." And the payback was not long in coming. Bush appointed at least 30 Enron executives, consultants, and investors to his administration including Army Senator Thomas E White who once owned 50 million dollars in Enron stock. Like so many other insiders, White dodged the bullet and sold his stock for a handsome profit before it became worthless. Other Enron-connected Bush officials include Defence Senator Donald Rumsfeld, US Trade Representative Robert B Zoellick, White House adviser Karl Rove, and economic adviser Lawrence Lindsey.

When Vice President Richard Cheney set up his energy Policy Task Force, he met with or spoke by telephone at least six times with Lay to make sure that every word in the plan conformed with Enron’s drive for total deregulation of the energy monopolies. McDonald said, "Cheney may have been talking, but the words were Ken Lay’s." In a brazen obstruction of justice, Cheney has refused all requests for documents generated by the secretive meetings of this Energy Task Force.

When Enron began to falter, last summer, Lay telephoned Treasury Senator Paul O’Neill and Commerce Senator Donald L Evans to plead for help in securing bank loans to keep the sinking ship afloat. Bill Clinton’s Treasury Senator, Robert E Rubin, now chairman of the executive committee of Citigroup, also telephoned the Treasury to plead Enron’s case. Contrary to Administration claims that they refused to help, Lindsey who had served as a 50,000 dollars a year Enron consultant, drafted a report on the danger that the Enron collapse could spread to other corporations creating "global market upheaval" similar to the collapse of Long Term Capital Management, the hedge fund giant in 1998. The Treasury Department also drafted a similar report. (Neither of them have been made public).

Jennifer Palmieri, a Democratic Party spokeswoman, said these reports are "a significant conflict of interest" and prove that the Bush White House "did a lot of thinking about the fact that the company was going to collapse but they did absolutely nothing to make sure that 50,000 Enron employees would not lose their life savings."

Enron has been pouring out the money to buy influence in Washington since it was founded in 1985. In the past ten years, Enron has admitted contributing 6 million dollars to Republican and Democratic lawmakers. What did they get in exchange? Tom DeLay rammed through Cheney’s energy deregulation package through soon after the September 11 terrorist attack.

Among the biggest recipients of Enron largesse were former Texas GOP Senator Phil Gramm and his wife Wendy, who was chairperson of Reagan’s Task Force on Regulatory Relief. In a revealing report, Public Citizen exposed how Senator Gramm won "stealthlike approval" of legislation exempting energy commodity trading from government regulation and disclosure, at the specific bequest of Enron. Wendy Gramm pushed through similar exemptions for energy corporations in 1993, and was rewarded by Enron with a seat on their board of directors. She was paid 915,000 dollars in salary and 1.85 million dollars in stock options and dividends from 1993 to 1998.

Bob Herbert, New York Times columnist wrote, "The kind of madness that went on at Enron could only have flourished in the dark. If the deregulation zealots had their way, we’d be left with tainted food, unsafe cars, bridges collapsing into rivers, children’s pajamas bursting into flames and a host of corporations far more rapacious than they are now."

Fellow New York Times columnist Paul Krugman compared the Enron crisis to the meltdown of the so-called "Asian tiger" economies four years ago, calling it "crony capitalism." But Krugman revealed in an earlier column that Enron paid him 50,000 dollars to serve on an "advisory committee." Krugman lamely claimed the body "did nothing." He’s wrong. This was part of Enron’s efforts to infiltrate and silence the corporate media.

Writing in The Nation, William Greider pointed out that "there are more Enrons out there," that the secretive, deceitful double-dealing that brought Enron down, is part of the corporate culture of globalised transnational capitalism. This is not a case of one rogue corporation, he wrote, it is the "system."

In "Lectures on Fascism" the great Italian Communist, Palmiro Togliatti, points out that the "corporate state" lies at the evil heart of fascism. "We have seen bailouts for faltering banks, interventions in which Mussolini is not afraid to say, ‘They have cost us billions.’ At this moment, the corporations have entered the field of legislation—the economic policy of fascism, the organisation of the supremacy of finance capital in the country’s life, has reached the highest point."

Togliatti goes on to say:

We do not have fascism. But Enron is a model of Mussolini’s ideal corporation based on the interpenetration of the corporation and the state, its takeover of a political party to serve as its political instrument, its seizure of power if necessary by coup d’etat.

The collapse of Enron presents both dangers and opportunities. So far, the Democrats have been at best weak and timid in response to this crisis proving that Enron succeeded in largely silencing them. Tom Daschle revealed this timidity when he went hat in hand into negotiations with the Republicans on an economic stimulus package. His first move was to drop the demand that all unemployed workers receive extended health care coverage. It reflects the Democrats misguided estimate that the recession is already coming to an end.

This political cowardice does not mean that we should write off the liberals and centrists in the House and Senate. There is a core of fighters in Congress, mostly in the Black Caucus, Hispanic Caucus, and Progressive Caucus, that we should build around. Every lawmaker needs to hear our demands that they take a stand, to bring Enron and its executives to justice, to expose and fight Bush, Cheney, Rumsfeld, Ashcroft as well as DeLay, Trent Lott, and other lawmakers in the service of Enron.

They need to hear our demands for a real economic stimulus plan starting with a programme to save our steel industry. Double the minimum wage. Double the weeks of unemployment compensation to 52 weeks. Put money in the pockets of the needy. Take it from the bank accounts of the greedy! Tax the rich! And stop Bush’s "sole superpower" bully wars around the world.

Clearly, the AFL-CIO led coalition must intervene to mobilise a real fightback. Our Party must be in the middle of this struggle. We need to go all-out to expose the Enron crisis as a crisis of the system in the pages of the PWW and in Political Affairs. We need to hammer at the Bush connection and not permit Bush, DeLay and the ultra-right escape their ringleader role in the rise and fall of Enron. We should explore issues untouched so far such as the connections of Enron with the Bush war policy and the ripple effect of the bankruptcy in the worsening economic crisis. The fight to expose Enron and defend all those hardhit by its collapse, could be a determining factor in the 2002 elections, helping defeat the ultra-right. And in 2004, it could be a key factor in making Dubya a one-term president.