Mike, This is like the idea of fame in the Arts. Fame equals profit while the lack of it equals poverty. The problem with fame is the Paparazzi and the tabloids which create alternate versions of fame. So you need the fame but the fame can bring you grief, as well as money, in what you have to sacrifice in the way of personal relationship, families, time with children as well as such things as your own personal identity. So I don't find this to be all that controversial.
I also see it as the wave of the future. So many of the things that is now hitting the bourgeois side of the economy began in the expressive side of the society. We are your future. I'm not so sure that the average economist type is ready for that level of insecurity anymore than the average worker at Enron was ready to spend the time necessary to control their retirement accounts. Most people just want to do their jobs and then go home and get a beer. A result of the entrainment on factory whistles that created the belief that you buy the worker's time and not their expertise. The new world has obviously demanded more expertise then the average worker, at Enron anyway, was willing to put in. On the other hand, more speculative work outside the job's work load, will ultimately mean more expense in the sense of either less time at the job or more money for the available time. It all seems like the way the sport's salaries have spiraled upward. Only the lucky and the prepared truly succeed. Did you see this article from today's times about the "bubble." The name of this game is "if you can understand what happened then it wasn't wrong." That defines the market as a "work of nature" or as they say about highly trained expert singers "they are a gift of god." Talent and luck is a "gift of God", not vocal expertise, and the market is no work of nature either. The market is a work of culture and social processes. If Chancellor is right then Enron was not just self-promotion but had a huge amount psychopathic personal immorality built into the structure. Since what Chancellor says was known. What was known could be avoided. It reminds me of the old book by Karl Menninger: Man Against Himself, which argued for the death wish as a part of all human pathology. It has been forty years since I read the book but I seem to remember reasons like guilt, repression and abuse as the reason for such illogical behaviour. Perhaps Brad to fill this out since I'm out of my expertise on this one. But can you imagine Ken Lay's psychology that would make him believe that he could get away with such things in plain sight of everyone. As if the attention not only brought him money but would protect him. A problem that stars have on a regular basis when they believe their fans will maintain their loyalty no matter what the artist does against the Fame he has gotten. I'm reminded of Harry's talk about over production as if it hadn't gotten attention but Greider's "One World, Ready or Not" and Hedrick Smith's "Rethinking America" both made the point well before all of this came down. The point for me is oversight. The antidote to fame is criticism from the media and the seemedly fickle desires of the audience. As bad a movie as Mariah Carey's "Glitter" was, it still was pretty on the mark as a symbol of audience response. What made a fantastically successful career on video and CD's drew too close a look, too much attention to what is essentially a small talent in an entertainment bubble. There is some art being done in the Pop-hip-hop area but it is essentially engineered by talented producers and engineers. You don't want too much attention drawn to the talent of the performer. So you want attention but you must be sure that your product can stand up to it once you have it. There is much made of personal contracts and the contracts between individuals as the real basis for morality however, these same people who say such things create incredibly unfair and even immoral contracts. It seems that they wish to get away with whatever they can. Such action in the Performing Arts is the way to get blackballed in the business and being forced out. Only the very successful and wealthy can follow the less careful path and even they eventually lose out. There is too much money involved in putting the product together to tolerate personnel who endangers the project. How much longer will this society succeed without endangering the future of the world? Eventually on a global level, there will be a stop put to it. And no amount of rationalization by economists or analysts will stop it. The only hope was a competitor. But the communist weren't up to the job and now we are out of control, unless Democracy bounces back. I'm afraid I don't have much hope on that one. Not enough people seem to care about that. Ray Evans Harrell, artistic director The Magic Circle Opera Repertory Ensemble, Inc. [EMAIL PROTECTED] January 27, 2002 The Trouble With Bubbles By EDWARD CHANCELLOR LONDON-As Walter Bagehot, the great 19th-century editor of The Economist, put it: "The rocks only show once the tide has gone out." In recent months, we have seen the tide of sentiment and wishful thinking, which buoyed Enron in its rise to glory, subside. The rocks, upon which the company was scuppered, emerge in ever sharper form. However, the Enron affair is not an isolated case. On the contrary, it can be seen as representative of the greatest speculative mania in the history of the world. Speculation predates the Internet, of course, and Enron existed before Internet mania took hold. But in its hubris and attending hype, in its focus on earnings instead of ethics, in its insistence that it is unique and unprecedented - in touting its innovative use of technology - Enron stands as the quintessential Internet company. And its fall, like the bursting of the Internet stock bubble, has been spectacular. One of the characteristics typical of a bubble, and especially typical of the Internet bubble and Enron, is blinding arrogance. Enron called itself the "world's greatest company" (or sometimes just the "world's leading company"), while the media raced to pile on the superlatives, dubbing Enron the "most innovative" company in America, one of the "fastest growing," one of the "most admired." Small wonder that Enron's meetings with outside investors have been compared to revival meetings. The Houston energy company was both a leading proponent and beneficiary of the Internet boom, moving its energy trading business to an online platform. The company's Internet ambitions did not end there: it spent billions of dollars constructing a telecommunications network for trading bandwidth and delivering "killer app" services like video on demand. Enron also invested heavily in Internet and technology companies. Enron was the quintessential "weightless company" of the Information Age. Its "knowledge assets" were said to be infinitely "scalable," while the markets it hoped to dominate were forecast to be soon worth trillions of dollars. Speculative bubbles frequently occur during periods of financial innovation and deregulation. Enron was a prime beneficiary of the deregulation of the American utility industry. By developing trading markets for energy products (and many others), it extended the financial revolution of the last quarter of a century. With characteristic hyperbole, Enron's management boasted that it could manage risk better than almost any company in the world. However, it is now clear that Enron used financial engineering to conceal risk. The failure of Enron reveals a culture of lax regulation - another common feature of bubble periods. During manias, there is a tendency for businesses to be managed for the immediate gratification of speculators rather than for the long-term interests of investors. A decline in business ethics is another common feature of boom periods. At such times, the conflicts of interest, inherent in the business world, tend to be abused. In Enron's case, the abuse of the conflict of interest between management and shareholders, or the "agency problem," as economists call it, can be measured by the difference between the more than $1 billion raised through share sales by Enron's executives and directors and the many billions of losses of by outside investors. There were also multiple conflicts of interest between Enron and its outside advisers. Arthur Andersen earned more from its consulting services for Enron than from its auditing work. In time, we may discover whether this conflict of interest was the cause of Andersen's acquiescence in Enron's deceit. Enron's relationship with Wall Street reveals similar conflicts. Analysts employed by the investment banks eager to provide services to Enron remained bullish on the company long after others had started to raise questions regarding the opacity of its balance sheet and its low returns on capital. Merrill Lynch put money in Enron's "special-purpose vehicles" and raised hundreds of millions of dollars from others to invest in the same. Dozens of investment banks received information about the true nature of Enron's financial situation, yet because they received it on a confidential basis, they could not share it with their brokerage clients. Speculative manias frequently end in a wave of lawsuits and calls for greater regulation. Last year, following the collapse of the Nasdaq and the abysmal record of many I.P.O.'s, shareholder class-action lawsuits reached record levels. Enron will no doubt keep lawyers busy for years. The conflicts of interest suggested by the Enron scandal are already provoking calls for tighter regulation of derivatives, as well as the accounting and investment banking professions. In his classic book "Lombard Street," Bagehot wrote: "The good times . . . almost always engender much fraud. All people are most credulous when they are most happy. . . . Almost everything will be believed for a little while." In the bad times that inevitably follow, people are less happy and therefore less credulous. Their vision of entrepreneurs is more jaded, investors are more suspicious and business morals more strict. Under such circumstances, grand corporate frauds are more difficult to perpetrate. Perhaps a little less happiness is a small price to pay for a little more honesty. Copyright 2002 The New York Times Company | Privacy Information
