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Energy Regulation and Summary of the Enron Scandal

summary of the enron scandal

Is Deregulation ever a good thing?

Let's look back at the deregulation of the Banking Industry in the Eighties. There was a need for reform due to the skyrocketing interest rates of the time, but what ensued was a $100 billion (possibly more) rip-off by the likes of Michael Milken and several dozen of his band of corporate thieves.

 

Fifty five Federally Insured Savings and Loan Institutions defaulted, and dozens of huge corporations filed for bankruptcy. The money lost by these corporations and S&Ls was pocketed by Milken and his crew while the taxpayer and investor footed the bill.

Deregulation of the public airwaves is still being sought - not by any citizens groups - but by (you guesed it) large corporateconglamorates. After having the rules changed in the nineties they were back for more.

The public found it to hurt local coverage, put people out of work, and there was a huge negative response from citizens that has so far stahled this latest round.

Enron had been pushing for deregulation for 5 years or more saying that the prices will fall dramatically with increased competition.

They even produced TV commercials shown in California to get the public to back the scheme.....which they eventually (and foolishly) did.

The deregulation of the Energy Industry is quite vivid now with the taped recording of an Enron Exec asking for (and receiving) a bogus shut down of a power plant in Nevada (and their subsequent laughs).

The day of the shut down, Enron declared an "energy crisis" and raised prices (in some places) 400% to the local Power Companies who could not legally pass that much of an increase on to the public. The State of California went $40 billion in debt during that first year of deregulation.

So, it is quite clear that deregulation of industry will have horrendous side affects, although the drug industry and criminals have been prospering.

White Collar Crime Punishments

While our elected officials have condoned diminishing government regulations, they have been mute on updating of the criminal code. The punishments for huge white collar crime were put in place many decades ago before anyone knew what a billion was.

Michael Milken was fined $200 million dollars after stealing and cheating the American public out of billions of dollars.

 

He spent 18 months in a minimum security prison and was released to spend his loot. "Milken's punishment for costing the American taxpayers billions of dollars iscomically trivial" - a quote from Benjamin Stein who wrote a book on Milken's carreerin crime entitled "A License to Steal"..

When you realize that these white collar criminals are ripping the public off to the tune of billions of dollars, you see that there is much reform that is needed in our Criminal Justice System. In the case of the drug industry, there are law suits being filed by the families of their victims. One has to wonder, though, if the court cases should not be in Civil Court , rather in Criminal Court.

 

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