"Enron: The Smartest Guys in the Room"

This documentary, which came out in 2005, was played on PBS this week
as part of their "Independent Lens" series. I remember seeing it
reviewed when it first came out, but didn't see it until this week.

Overall, a pretty interesting film. I know enough about accounting and
the specifics of the case to know some of the technical reasons how
the Enron guys broke the law, but I didn't expect a mainstream movie
to be able to present it without it being boring. In all, this film
did a pretty good job of explaining it, I thought. Sure, some of the
things they said were technically a little misleading. (Example: The
"mark to market" method, for instance, is actually appropriate in some
cases. The problem was the way Enron decided to apply that method in
their case.) But those are mainly quibbles. On the whole it seemed ok.

The pacing of the film was appropriately brisk. You'd think a
documentary about technical business irregularities would sag in
parts, but I have to say, it really didn't. Likewise they did a good
job of conveying the crazed, testosterone-filled culture of the energy
traders. I've known people who do that sort of thing and it seemed
pretty accurate from what I could tell.

I do have a few criticisms of the film, though. First, there's a part
in the middle where they try to compare the actions of the Enron
people to those of the subjects in the famous Milgram psychology
experiments. It's a pretty good analogy, I think, but the problem is
that for people who don't really know the experiements, that part of
the film might be a little confusing. It's a little hard to know why
they're mentioning these experiments unless you already know what they
are, because their explanation was too quick.

There's another problem too, particularly in the parts where they try
to tie the Enron scandal to larger business irregularities at the
time, and political figures. On the whole, they didn't fall into the
trap that you sometimes see, in which a film in effect has the message
"This happened because all business is evil," but occassionally they
seemed to imply that certain things were "bad" when they really
weren't. Deregulation itself, for example, wasn't the problem with
the California blackouts, for instance. The problem was individuals
involved turned out to be *criminals*. Likewise, at one point the
film seemed to imply that everything in the energy industry would be
better if we had the big, bloated monopolies of the past, which is
laughably wrong if you know the first thing about the energy industry
or how it works and used to work.


Another slightly sloppy bit in the film was the part where they were
showing that Lay had been close to President Bush and his family.
Granted, given Bush's popularity ratings it might seem enough to say,
"How good can this person be, he's a friend of George Bush!" But
really they didn't explain what exactly Bush did or didn't do for him,
other than saying that there were rumors that he was going to be
picked for Secretary of Energy, withouth really interviewing people
who were in an actual position to know whether this was true.
Basically it just seemed like they were trying to foist guilt by
association on Lay and the Bushes, but never really said exactly what
was wrongdoing. My point here isn't to say "They were trying to smear
Bush, aren't they bad" - it's to say that as a storytelling
technique, it's seemed pretty weak to merely point out the connection
without going any further.

But overall a very interesting and well done film. A good way to get
caught up on the Enron scandal if you followed it in the news but were
a little fuzzy on which player was responsible for what.

The "bottom line" in the Enron mess was that, in fact, the company wasn't
making money but actually losing money.

A handful of top executives covered this fact up and also diverted hundreds
of $millions to their respective personal benefit.

But ALL the money that went to the crooked executives in total was nothing
compared to the energy shortfalls during the period.