Regulation necessary to benefit everyone; Enron perfect example
Ben Piper (Jan. 14) is absolutely right to state that the investigation into Enron should not be allowed to become a political circus. This is not Teapot Dome.
Although Enron chief Ken Lay's close ties to the Bush administration have drawn media scrutiny, I would have been surprised had Bush not known one of Texas' most prominent businessmen. That the Bush administration did not intervene in the Enron collapse speaks well of this White House's integrity.
What Piper fails to mention, though, is the subtle manner in which Enron's collapse shows that the road to deregulation will be neither easy nor painless. This is a fairly significant omission in light of Piper's previous column, which urged the Indiana General Assembly to follow Texas' lead in deregulating energy markets. In fact, Enron's example demonstrates that energy deregulation is probably a road best not taken.
Enron's example is a perfect case study of how the interests of workers, management, shareholders and consumers do not always coincide, especially when a poor market structure (in this case, stalled SEC oversight rules for outside auditors) destroys the free flow of information. If Piper's wish were granted and Indiana deregulated its energy markets, the people who would benefit most now would not be consumers but investors and executives. Apparently, this transfer of wealth meets with deregulators' approval.
Edmund Morris' recent book "Theodore Rex" detailed the first President Roosevelt's crusade against the "malefactors of great wealth," whose oligopolistic control of the commanding heights of the national economy (railways, iron, finance) sparked massive social unrest. I knew conservatives hated the New Deal, but I didn't know they resented the Square Deal.
Regulation helps preserve the social contract between labor and capital. If conservatives continue to act without thinking through the long-term political ramifications of their short-term economic policies, then the protectionism will carry the day and reverse free-traders' gains.
Republicans cannot treat workers as lines on a supply-and-demand chart but must treat their concerns as seriously as they do investors' worries. If they do not, then the G.O.P. will suffer, and deserve, electoral defeat.
Paul Musgrave
Junior
