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Pipe Dreams: Greed, Ego, and the Death of Enron

Robert Bryce

posted on 30 January 2003

reviewed by Joe McCauley

This is old fashioned muckraking, high entertainment beginning with a
history of Houston's high-rollers, including Mr. Lay and the main
cast of Enron characters. The role of mark to market accounting in
allowing and even encouraging companies to mislead investors with
false financial statements is convincingly explained. What I missed,
however: the analytic side that would show the extent to which
derivatives trading losses (was there a net gain or loss, how big?)
fanned the flames of the financial instability and spurred on the
drive to report imaginary profits from newly-created sub-ventures.
The greatest failure of the book is to present the 'greedy
individuals' as the culprits instead of focusing more systematically
on the deregulated economic system that the high-rollers operated
within. For information about how the IMF and World Bank have
systematically produced negative results in the Third World through
the imposition of strict rules based on neo-classical equilibrium
theory (globalization via privatization and deregulation), see
Stiglitz's recent book "Globalization and It's Discontents".