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As the prophecies of the ages
continue to come true we in the capitalist system must look at Enron goes bust, Argentina in chaos - a warning to the world's economy.
The roots of Enron go far and wide.
Besides a loss to pension funds in 14 states and personal investments in 401k
and stocks vanishing, James Flanigan of the Times
points out some other ways that Enron is effecting our capitalist system.
“The collapse of Enron Corp., so far
a political, legal and investor crisis, is now imposing widespread costs on the
Electricity
and natural gas companies are facing higher costs. Projects to build power
plants, pipelines and transmission lines are being put on hold. And in all
sections of the economy, companies with high debts are feeling the pinch of
tighter credit.
More
than $12 billion of investment in new power plants has been postponed in recent
weeks as financial markets, unnerved by Enron's sudden descent into bankruptcy,
have effectively raised the cost of capital for energy projects. Plans to
develop natural gas deposits also are being cut back dramatically.
Ultimately,
if these cutbacks result in power shortages and higher costs in future years,
the burden will fall on consumers, according to energy experts.
To
be sure, the recession and mild winter weather are reducing demand for energy.
But Enron's demise is playing a role, experts say, as lenders and credit rating
firms are taking a hard look at corporate debt levels and forcing many to cut
back spending plans and sell assets to improve their balance sheets.
It is necessary to understand the
service that Enron, at its best, provided. In a phrase, Enron "made
markets."
Now Enron's bankruptcy increases "the risks and uncertainty in the business," Rowe said.”
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The Enron bankruptcy is giving some
big players the jitters. Financial collapse? Hardly, but another sign that something has gone wrong with the
system and the once safe bet on capitalism is not so safe anymore.
Capitalism has changed in so many ways - Enron being an example of new
accounting practices to fit new laws - that it must be called something else,
like Gambling. But that is already taken, perhaps capsumerism
because of its high capsumption of natural resources.
If Bush is remembered for anything
let it be for stopping runaway consumerism. On the bright side slowing the
construction of oil burning power plants that pollute our environment is a good
thing. On the very real side, within the crosscurrents of Enron and
Michael Tivana