January 19, 2002
From the desk of Jane Galt:ANDREW SULLIVAN slams Paul Krugman
ANDREW SULLIVAN slams Paul Krugman for taking Enron's money while waxing self-righteous about Bush. He also links to an article Krugman wrote for Fortune in 1999 discussing Enron's business model, which Sullivan calls a puff piece, citing this section:
The retreat of business bureaucracy in the face of the market was brought home to me recently when I joined the advisory board at Enron--a company formed in the '80s by the merger of two pipeline operators. In the old days energy companies tried to be as vertically integrated as possible: to own the hydrocarbons in the ground, the gas pump, and everything in between. And Enron does own gas fields, pipelines, and utilities. But it is not, and does not try to be, vertically integrated: It buys and sells gas both at the wellhead and the destination, leases pipeline (and electrical-transmission) capacity both to and from other companies, buys and sells electricity, and in general acts more like a broker and market maker than a traditional corporation. It's sort of like the difference between your father's bank, which took money from its regular depositors and lent it out to its regular customers, and Goldman Sachs. Sure enough, the company's pride and joy is a room filled with hundreds of casually dressed men and women staring at computer screens and barking into telephones, where cubic feet and megawatts are traded and packaged as if they were financial derivatives. (Instead of CNBC, though, the television screens on the floor show the Weather Channel.) The whole scene looks as if it had been constructed to illustrate the end of the corporation as we knew it.
Personally, I don't think it's a puff piece; it looks like the same kind of idiotic millenial blather that convinced my co-workers, who couldn't read a balance sheet, that they were stock-picking geniuses, and my classmates, who could, that they were better off borrowing money to pay for school than selling any of their precious Webvan stock.
Sullivan's point, however, is well taken: for Krugman to criticize the administration for doing pretty much what it would have done anyway after taking money from Enron is the height of hypocrisy, the more so because Krugman admits straight out that he couldn't figure out any legitimate reason for Enron to give him that $50K.
Posted by Jane Galt at January 19, 2002 2:56 PM | TrackBack | Technorati inbound links