From: Technotranscendence (neptune@mars.superlink.net)
Date: Tue Jan 22 2002 - 20:43:51 MST
To be honest, it's still a little too early to tell what happened at
Enron. The kind of up to the minute reporting that's going on now
probably won't add much to our knowledge. We'll have to wait until a
few investigations are finished and evaluated.
That said, I didn't feel Roland Watson's "Greed" (at
http://www.lewrockwell.com/watson/watson30.html) was an attempt to
absolve the executives from their responsibilities or to wrap them in
the capitalist flag. Early in the article, he states that he is "not
focussing here on the dubious practises of the executives and
accountants related to Enron, we'll leave them to the judicial processes
of the land." He goes on to say he wants to "simply comment that those
who demand that the government bail out the 401K pension holders are
wrong."
In that area, I agree with him. The government shouldn't take the
taxpayers' money to bail out pensioners from Enron. That Enron might
have broken laws or "the rules" is another matter, but even if Enron
did, this doesn't make the taxpayers responsible for making up the
difference. If someone defrauds you, the person to seek damages from is
the fraudulent person -- not everyone else in society. Granted, you
might not be able to recover everything -- which is, sadly, likely the
case here -- but that does not give you a blank check on people who had
no responsibility in the matter -- the taxpayers.
Add to this that this is the same old song of investors -- here,
employees of Enron -- wanting the government to bail them out for bad
investments. In the long run, by not bailing these people out, more
people will become cautious about their retirement accounts. (The same
should be applied to other incidents of bailing out investors, such as
the bailout of LTCM -- where the initial investors all walked away with
fat wads of cash. Granted, that was a privately funded, but government
arranged bailout, but it reinforced the same overly risky investment
mentality that permeated the 1980s and 1990s.)
Anothe song, which all should be aware of, is life is full of failures
as well as successes. This is especially true in business and the stock
market. Everyone can't be right at the same time in stocks (or
commodities or futures), especially if each investor is betting that she
or he is right and everyone else is wrong. That's why it might be a
good idea not to stick your nest egg in your company's stock options or
even your company's 401(k). Diversify and be vigilant! After all, it's
your future you're playing with.
Enjoy!
Daniel Ust
http://uweb.superlink.net/neptune/
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