Max Schmeder

23 May 2012

Stylish but Soft-Hitting

"Enron: The Smartest Guys in the Room" is suave and well-crafted, butbetrays some wishful thinking and apologist tendencies.Some ex-Enron workers venture poetic but unmerited speculations abouttheir corrupter associates, conjuring hypothetical images of theirformer friends now reflecting back on their transgressions andexperiencing ethical remorse. We are subjected to clichés about theirhaving to face their own "shadows" and whatnot, all of it speculative,and in spite of any evidence that they ever experienced a moral twingeor regretted anything other than getting caught.There's also an insidious "slippery slope" message, some philosophicalwaxing upon the blurriness of ethical lines, and depictions ofcompulsive personalities, all of which introduce unwarranted moralambiguity. Bethany McLean, one of the investigative journalists,surprisingly lays overmuch of the blame on Andrew Fastow, declaringthat the fraud started with him (!) even though Fastow is elsewhereshown to have been recruited into a company already corrupt from thetop down. There is some subtle attempt at containment here. This filmskewers the culprits one moment, but then shrinks from theimplications.The WORST example is a naive question given undue emphasis by beingleft "provocatively" open-ended. The narrator, Peter Coyote, asks,"What motivated the corrupt traders? Was it their million dollarbonuses? Or was it docile complicity?" (I'm paraphrasing here) Ano-brainer answer you might think, but then - I kid you not - thedocumentary suggests the second possibility and launches into thefascinating but entirely irrelevant Milgram experiment, in whichreluctant subjects are persuaded by an authority figure to voluntarilyelectrocute others. But Enron traders were a uniformly sanguine lot,evidenced by testimonials and taped conversations displaying nakedgreed and delight (generous clips of which are included in thedocumentary). Yet we are supposed to imagine they were the victims ofobedience training?It's a bit much...Maybe two or three of the commentators don't pussyfoot around, andthrough them "The Smartest Guys" successfully conveys the perils of thefree market and deregulation; but these lessons get watered down bywistful undertones and feigned ambiguity. Post-Enron, the communistcharge that capitalists are "cannibals" now seems undeniably apt. Yetwe forever flatter ourselves, rehearsing the cant of the free marketideology, according to which the profit motive encourages 1) innovationand 2) hard work. Granted. But what the pundits and economistsinvariably overlook is that the profit motive also encourages 3)robbery. Adam Smith's *other* "invisible hand," if you will ...hiddenbehind the back and gripping a knife! Enron calls for an inquiry intothe nature of capitalism, not an explanation based upon specificpersonalities. Human nature is what it is, and there will always bepeople ready and willing to cut throats when given motivation andopportunity. To misquote the NRA: People don't kill people.. incentivesdo.Final criticism: a bit of shabby hypocrisy. One of the Enron execs isportrayed as having sleazy encounters with strippers; the viewer isthen dutifully treated to lots of footage of nude strippers... ha!

22 May 2012

Dont Pass This Up

This is a much watch if you're interested in the history of the Enron scandal. The praise from the first review is spot on!

21 May 2012

Good on the human story, not so good on the technical story

As a documentary film focussed on the human story of Enron, this is very well done in terms of the interviews, and the craft of selection and editing. The film also brings out, in the recorded words of the traders, just how destructive their behavior was towards California in outright manipulation of its electricity supply. The evils of unregulated capitalism, before our eyes.But as an explanation of the inner workings of Enron including the positives in their business model, it falls short. The filmakers were obviously not experts in business or finance. I realize it is not politically correct to say anything good about Enron, so brace yourself; Enron was not all bad. They were an innovative and even brilliant company in the early years, widely admired, and although Enron indeed flamed out as a criminal conspiracy towards the end, it did not start out that way. The film fails to explain for lay viewers exactly what it is that Enron invented in energy and commodity markets. The 'asset light' business model developed by Enron for commodity markets was legitimate; business schools study it to this day. They were inventive in other ways; for example Enron's idea to make a market trading fiber optic bandwidth was a worthwhile innovation just a bit ahead of its time. And Enron's attempt to stream movies over the internet failed with Blockbuster but is now a reality through Netflix.The film also does not properly explain the mechanisms of accounting fraud when Enron's creativity turned to hiding its sinking financial structure in a giant Ponzi scheme. For example, the viewer gets the impression that the limited partnerships ("special purpose entities") created by Fastow were entirely illegitimate. This is not true - they are a common business tool for packaging investments in the real estate industry - what was fraudulent was the exact way they were twisted to disguise Enron's debts. The film also gives the incorrect impression that "mark to market" accounting is inherently dishonest, which is also not accurate - in some circumstances it it entirely justified. So, like all human dramas, a more complex story and not all black or all white. Perhaps it is too much to expect that a popular film could clarify all this, but they should have tried a bit more. Otherwise it's like one of those films about Einstein where, in an attempt to popularize, we learn about his relationship with his wife - but nothing about the theory of relativity.The real tragedy of Enron is how an initially creative business got cornered by losses in some sectors and was under immense pressure not to disclose this to investors. Behaviing badly when backed into a corner is a common human failing.

21 May 2012

Even Their Logo is Sinister

Am I the only one who is creeped out by the mere image of the Enron logo? It looks like a convoluted swastika to me, as well it might be. But when caught, the spin at Enron is, rather than claiming "I was just following orders", an inversion of that. Here the "inmates are running the asylum", as the top brass refuse to accept responsibility, meanwhile bailing from their sinking ship.Initially I was somewhat disappointed with this documentary, fearing that it was just a collection of soundbites aimed at the 'short attention span' crowd, leaving those of us who are seeking a deeper explanation of the Enron story wanting. However, as the film progressed it did seem to be too complex to cover adequately, and indeed the story is still unfolding in the courtrooms and boardrooms of America. As another Amazon reviewer suggested, "The Smartest Guys in the Room" provides an overview; you'll have to do your own homework to further your knowledge but the film may pique your interest.What we are given is a brief look at the corruption hemorrhage that was Enron. It just bled profusely in all directions, illustrating the nightmare of deregulation, among other things. Reactionaries might accuse the filmmakers of having a 'political agenda'; that's what reactionaries do. But the audiotapes of the utterly unscrupulous traders as they rape and plunder the state of California, laughing all the way like it's "Jingle Bells", should be more than enough to put everyone on notice, and affect how they sleep at night.

20 May 2012

Review by an X-Enron Trader

I really enjoyed this movie and it helped me understand a little more about what was really going on at Enron. I could not understand why Jeff Skilling was so intent on getting away from phyical trading and into paper trading, etc., but this movie sure helped me to get the message of a greed that I still have a difficult time comprehending.

lightdee

20 May 2012

Fascinating documentary - never a dull moment - too bad the trial results are missing

A very interesting expose on the greed, hubris, lies, etc. that broughtEnron down. This film is well-done and digs up a lot of dirt. The PBSviewing showed a little clip after the film which discussed the strangetrial results, which was probably the biggest problem with the film -it pretty much ends with the bankruptcy of enron and doesn't show muchabout the trials, since they took place later, although they would makefor a great inclusion. To me, the most incredible part of the film isthat fact that these guys would stand up every day and tell bold-facedlies to the employees, the government, the investors, and make it allsound good. They had to be thinking in the back of their head "it's allgoing to come crashing down someday"...

17 May 2012

Well-produced, watered down with obvious political bias

"Enron: The Smartest Guys in the Room", at times, is a riveting and fascinating documentary about both human nature and one of the greatest collapses in the history of capitalism. However, the documentary is watered down at times with very one-sided and obviously left wing propaganda. This makes the film a lot less compelling than it could have been.In particular, the documentary has a long and very unbalanced section on California's power crisis. Grey Davis, the loser politician who mismanaged the power crisis, is interviewed like some kind of unbiased expert witness, along with his Democrat cronies. There is absolutely no analysis or counterbalancing of his demagoging statements. In my view, this discredits the entire section of the movie. The film constantly smears Republicans and George W. Bush with little more than guilt by association, even though Bush never gave Enron any help as President. All of the major corporate accounting malpractices of the 1990's (including Enron's) occurred while Bill Clinton was President, but you'll never learn this watching the documentary. Nor will you learn that electricity deregulation was successful in other parts of the country and it was in place overseas years before California. The documentary is never dishonest, but it's very biased when it veers off into its political sections.The rest of the documentary is very good though. It details the history of the company, and, in particular, the brutal culture that ultimately facilitated its demise. The film has excellent exposes on the personalities that ran the company, and their bizarre excesses. It's surprising and also angering to learn just how many individuals were complicit in Enron's corporate cover-ups. The system truly failed in this case, although the film squanders the opportunity to propose how the system could be changed to make it better.Should you see it? It's at least worth a look. About half of it is fascinating material that you probably haven't seen or heard of before. The other half is a Democrat campaign speech. If that doesn't bother you, then you'll like this documentary.

blanche-2

16 May 2012

I hope Ken Lay is somewhere hot

I agree with previous posts: "Enron: The Smartest Guys in the Room" isright up there with the biggest horror films of our time. And this oneis scarier because it's real.It's hard to say what boggles the mind most: the complicity of ArthurAndersen, the banks, and the traders in this elaborate scheme of makinga failing company look profitable; the fact that the executives cashedout their stock at high prices and froze the employees' stockaccessibility until it was worth nothing; the derisive laughter of thetraders over the Enron-caused blackouts in California ("let them fallinto the ocean - let them use candles); that Lu Pi, a guy who ran afailing Enron company, left that company with $250 million in hispocket; or the fact that Ken Lay died before they could convict him ofanything. Take your pick, it's all disgusting.When one of the California power companies called Enron and said therewas a fire in the plant, the trader chuckled and said, "Burn, baby,burn." That sums up Enron's, the banks, the traders', and ArthurAndersen's attitude toward the common man - burn, baby, burn. Let'shope that's what Ken Lay is doing right now.This is a great documentary even if you don't understand business. Theonly part I didn't quite get were these dummy corporations that Flatowstarted up to hide Enron's losses which were then invested in by thebanks. That was a little complicated, but you'd think someone wouldhave realized that the CFO of Enron running companies that weresupposedly selling to Enron was a conflict of interest. Funny, no bankpicked it up. They won't give you a mortgage, but they'll pay a fortuneto a dummy corporation.Probably my favorite part was the mark to market accounting systememployed by Enron and signed off on by Arthur Andersen. I have nounderstanding of a reliable accounting firm allowing such a thing. Inother words, if I have a book proposal, I can report a profit of, say,$30,000 on the book even though it isn't sold and I haven't seen adime. And one wonders how they cooked their books. With help, that'show.

Larry Ratliff

16 May 2012

Even news junkies and former Enron employees might be startled by some of the corporate revelations that fill the screen.

16 May 2012

Good Stuff -- Monsters That Walk Among Us

I didn't see this for quite a while because it sounded boring. When I finally saw it, it turned out to be quite good. I imagine it is some preaching to the choir, but it's good preaching. It makes me think of serial killers -- monsters that walk among us. We would probably never notice them until after the fact.

13 May 2012

Greed as a Creed

This review is from: Enron: The Smartest Guys in the Room (DVD) Narrated by veteran actor, Peter Coyote, this DVD is disturbingly real. It reveals the depths that people will sink at the expense of others, and it reveals how widespread it was.First, Arthur Anderson Consulting signed off on "mark to marketing" accounting. In other words, Enron could report their projected earnings as actual profits. They could "report" profits of millions of dollars that they didn't have. They paid bonuses and other excesses with these projections.Next, Jeff Skilling was hired by Ken Lay to run the operations of the company. Skilling was a man with fresh, or some would say, grandiose ideas. This is just what Lay wanted--a man of vision.Skilling soon instituted promotions and bonuses for analysts who produced more than the other guy. Creating a classic cuthroat environment, the producers were given phenomenal bonuses while their less successful counterparts were shown the door. These were all being given on projected earnings.One rebel market analyst from Merrill Lynch would not give Enron a "strong buy" rating. Skilling contacted Merrill Lynch who promptly fired the errant employee, and Enron gave Merrill Lynch a fifty million dollar contract.Enter Andy Fastow another Enron executive in the mold of Jeff Skilling who managed to set up dummy corporations which were paying Enron. Several prominent banks knew of the scheme and went along with it. (You may even have your money in one of them.)Another Enron executive, named Pi was an executive cuthroat who knew his predilections and his limits. He left the company after making $250,000,000 and married his pregnant, stripper girlfriend.Skilling, Fastow, and Lay kept attempting new investments in energy and other ventures which flopped miserably. The DVD shows how they were beginning to lose their ability to think of new ideas to fool the public and the investors who never saw an Enron balance sheet or earnings statement.The most chilling part of this is the Enron analysts who were able to create rolling black-outs through California. They invested in the stock of power companies before they called the power companies and asked them to shut down the power for hours at a time. This, in turn, created demand, which increased the price of the stock and their profits. The real chill is you hear what is tantamount to their psychopathic laughter at the misery and hardship they helped create throughout the state. In another instance, they actually began cheering when a forest fire shuts down a power plant. Their "profit cheering" with no regard for the misery of the people without power may make the viewer want to drop these guys from a tall building.It gets even better--I mean, worse. Ken Lay said he didn't know what was going on. Interviewees told Ken Lay what his analysts were doing. None were fired or disciplined. How did he not know? He, like other top executives, sold off almost all their shares in the company just before the bad news hit. The common worker who had his or her 401K tied up in Enron stock was not allowed to sell it as the company and its stock value collapsed. They lost everything. One common power company worker who was interviewed said that his pension went from $340,000 to $1,200. This was painful to listen to.One last thing, these "Enron entrepreneurs" fought tooth and nail to keep California's energy laws deregulated. Everything has its positives and negatives. If free market enterprise is unchecked it does lead to invention and creativity. It also leads to greed and excesses.Maybe a little regulation is not such a bad thing.Update: Lay and Skilling have been found guilty. Their lawyer fees, expensive. The verdict, priceless!

12 May 2012

A clear understanding as to why Enron fell

I am a CPA & I watched the film in an ethics class we are required to take, essentially because of the fall of Enron. I have since bought the video & watched it at least 5 other times. Of course there are political slants. For example, they try & tie the Bush administration(s)(Sr. & Jr.) to Enron. But, the majority of the film deals with what happened to Enron, so that in the end, the stock you purchased was worth $0. I would highly recommend any person interested in business or the fraud aspect in business to watch this documentary. A riveting documentary on the rise & fall of Enron & who the major players in Enron were.

Liz Braun

12 May 2012

A surprisingly entertaining look at the sucking black hole of corporate morality in America.

Chris Vognar

11 May 2012

Go see Enron: The Smartest Guys in the Room and learn how to get righteously angry again.

05 May 2012

Unfettered Hubris Drives Intriguing Account of Enron Scandal

Even after reading Kurt Eichenwald's Conspiracy of Fools: A True Story, I was not prepared for the near-Greek tragedy presented in this smartly produced documentary of the Enron scandal based on yet another book, Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, by journalists Bethany McLean and Peter Elkind. Directed by Andy Gibney, the 2005 film follows the complicated rise and fall of Enron in an easy-to-follow, chronological order since the mid-1980's, using actor Peter Coyote's lucid voice-over narration. Enron started as a moderate-sized Houston gas-pipeline company that grew exponentially, reaping benefits for shareholders and far more so for the Enron executive team for a long, uninterrupted stretch. Billions of dollars were collected due to speculative mark-to-market accounting techniques approved by the SEC, and Enron consequently became one of the world's largest natural-gas suppliers. What resonates most from this searing film is how circumstantially pathological the chief villains are in this true corporate morality story. While the infamous Ken Lay comes across as the corrupt figurehead we have already come to know through news reports, it's really Enron CFO Andy Fastow (dubbed appropriately "The Sorcerer's Apprentice") and especially President and COO Jeff Skilling, who are mercilessly exposed here. Skilling is portrayed as a brilliant leader and a corporate Darwinist, whose favorite book is Richard Dawkins' The Selfish Gene, which he apparently translated into a bloodless performance review policy that worked like a genetic algorithm for people. Employees were rated on a 1-5 scale based on the amount of money one made for the company. Skilling mandated that between 10-15% of employees had to be rated as 5's (worst). And to get a rating of 5 meant that one was immediately fired. This review process was dubbed "rank and yank". Such was a typical example of his survivalist thinking.The corruption spread throughout the company, as Enron was responsible for, among other things, gaming the Northern California "rolling blackouts" in 2001, whereby the company profited as huge parts of the state were plunged into darkness. Citizens were threatened by a deregulation plan that essentially enabled a number of immoral Enron traders (led by Tim Belden) to place calls that drove up energy-market prices and took advantage of power-plant shutdowns. Of course, the Bush family dynasty does not come across unscathed in the Enron story and justifiably so according to their inextricable ties to Lay. Gibney effectively uses video footage from testimony at congressional hearings, as well as interviews with disillusioned former employees such as Mike Muckleroy and whistle-blower Sherron Watkins (who uses some effective pop culture references like Body Heat and Jonestown to get her points across).There are some amusing vignettes and images that tie some of the disparate elements together with excessive glibness. The documentary is best when it sticks to the facts, for this is one inarguable case where fact is truly stranger than fiction. Extras are plentiful on the 2006 DVD. Gibney provides an informative albeit verbose commentary track, and four deleted scenes, about twenty minutes in total, are included that become redundant with the film's portrayal of corporate malfeasance. There is also a fourteen-minute making-of featurette, as well as a "Where Are They Now?" snippet on the principals and three separate conversations with McLean and Elkind on how they got the story, how they validated their findings, and their enthusiastic reaction to the film. Other bonus materials include Gibney reading from scripts of skits performed at Enron and a Firesign Theater sketch about Enron's demise, as well as Fortune Magazine articles written by McLean and Elkind and a gallery of editorial cartoons.

05 May 2012

Ask Why

I don't know.I am now 61 years old. Way back in the beginning, when I first began to consider political issues in high school, I thought that "from each according to his abilities; to each according to his needs" was as fair and reasonable a statement as anyone could possibly make. In junior college I took some philosophy classes and began to challenge everything I believed to that point. I ended up as a registered Libertarian (still am, actually) and a subscriber to Ayn Rand's Newsletter. I read almost everything she wrote and pretty much figured she was God.I bring all that up because a movie like this is destined to be viewed through eyeglasses tinted with the engrained viewpoints viewers bring to it. And especially this is true of those who review it. Those who rave about "The Smartest Guys in the Room" tend to lean left; those who debunk it tend to lean right. The marketplace must remain free, because unless it does, we will have a communistic economy, and we all know that does not work. And the fewer regulations the better. I believed that sort of thing for more years then I care to remember.The problem with an unflagging belief in the rightness of laissez faire capitalism, though, is that the historical record really doesn't support it. I hate to borrow from the film in this regard, but Enron's slogan was "Ask why," which is really what I have tried to do all my life. And once I got into history, which I actually began during my college days, well, one book led to another. And soon I was reading about workers and robber barons and strikes and Wat Tyler's Rebellion in 1381, and I don't know what all.And after a while, if you simply read history, I think you do learn some things, one of which is that the negative emotions--greed, hate, anger, etc.--tend to be stronger then the positive emotions like love, charity, kindness, and patience. "Robber barons" is clearly a pejorative term, but if you simply read about what they did--not just what they created, but what they took from others--that term takes on an accuracy it might not otherwise have had.I do believe that capitalism greases the wheels that run the machine that benefits us all. But I also believe capitalists must be regulated. I think Alex Gibney, the director of "The Smartest Guys in the Room," stated my position rather succinctly in one of the extras on this DVD. He said, "I think the story of Enron exposes the major flaw in capitalism, which is the crude belief that raw self interest, left un-tethered, will always result in the best possible social good. It's not so."I think Mr. Gibney did an excellent job with this film, and if it is not as "balanced" as some of the reviewers think it should have been, that may be because it's difficult to make a positive argument for fraud. At any rate, regardless of where one resides in the philosophical spectrum, I do think this film is worth watching. It will definitely raise your blood pressure--whether you agree with it or not!

03 May 2012

Entertaining, not thorough informative

It was too dramatized, I thought. Also I didn't like the stripper scene because it was too long and too much nudity for my taste... gross. You lose concentration from what they're talking about. They could have just narrated the story about the strippers, why show so much nudity in a corporate scandal documentary???Better off reading the book called "Conspiracy of Fools"... very good reading material and informative, not too dramatic like this "documentary"

J. Hoberman

03 May 2012

Less corporate noir than capitalist disaster film.

01 May 2012

Good, but couldve been better

The single best thing about this documentary is the sheer volume of footage we get of the actors involved in the Enron drama. We get a fair bit of newsreel type stuff of the primary players, plus a good deal of interview footage of those from around the periphery. Altogether, this gives you far more of a sense of who these people were, and why they did the things they did. It puts meat on the bare bones of facts, names, and figures. Decisions - and disasters - are made not by abstract optimizers, but by real, flawed, flesh and blood human beings. Films like this one remind us of that. On the down side, I would have liked to have seen more thoughtful probing into how the accounting fraud at the core of the Enron debacle was allowed to continue. We do get to see something of the underlying mentality involved: the merchant bankers and all the rest who just lined up to play their part and take their fee and keep their mouths shut. Indeed, it is in exposing the human dimension to the fraud that this documentary is at its strongest.But one thing we could have seen more of is deeper probing into the institutional structures that facilitated all this. In particular, I would have liked to have seen much more of a sustained focus on the auditors. I single out the auditors for the simple reason that they are, after all, the ones whose nominal role it is to uncover accounting fraud and report it. That's the whole reason for having auditors in the first place. Of course, the reality is that auditors are hired and fired by the very people they're supposedly monitoring. It's like going into the criminal justice system and being able to hire and fire not only your own defense team, but the police whose nominal role it is to investigate you as well. Understandably in such a system, prosecutions remain rare. It is for this reason that I would say that the really fundamental problem is with the institution of auditorship itself. That was the case back in Enron's day, and it remains so today. Sarbanes-Oxley's solution of audit committees is a joke. It's just regulation for the sake of being seen to be doing something, despite the fact that you're really doing zip. It's a great employment scheme for corporate accountants and attorneys, but otherwise it just creates more paperwork. And if there's one thing that Enron should've taught us, it's that these people are superb at filing the right paperwork. So long as the auditors are hired and fired by the very people they're supposed to be auditing... Well, you figure out how that's going to end. So as radical as this idea may seem to some in the business community, I would say that the real lesson of Enron is simply this: No, it's not okay for the people whose nominal job it is to report to the market on the integrity of a company's accounts to be hired, paid, and fired by the very people whose accounts - and integrity - they're supposedly investigating.In fact, it's just plain stupid. We don't have to stop at company accounts either. There's a deeper and more general principle here: it's not okay for people whose nominal job it is to provide "independant" advice to the market on ANYTHING to be hired, paid, and fired by people with a vested interest in the perceived status of whatever is being advised upon.If you're wondering why any of this still matters a decade on, why Enron still matters a decade on, ask yourself simply this: Would we now be in the middle of the Global Financial Crisis if mortgage backed securities weren't rated by people who were ultimately being hired, paid, and fired by the very people who were selling those securities? If we'd connected the dots and had a blinding flash of the obvious way back in 2001, there's a lot of pain we could have avoided. Enron was a * H U G E * missed opportunity.This is the kind of analysis I would've liked to have seen more of in this film. So I can't help but end this review where I began it. On the level of individual human beings involved, this was undoubtedly a fascinating documentary. But on the level of the broader institutional structures that allowed Enron to happen, it wasn't particularly insightful. It never really went beyond the rather uninspired observation that people just didn't do what they were supposed to.Theo.

Robert W. Butler

01 May 2012

Alex Gibney's documentary is a concise examination of the Enron affair that's poised between straight journalism and outright satire. When it's over you will be so mad you can't see straight.