I WAS IMPRESSED BY Paul Krugman's column
on Enron a week or so ago, and linked to it in my last entry. Now it
seems that Krugman was in the pay of Enron a couple of years back, and
during that time wrote a
paean to the newness and rightness of entities like Enron for Fortune.
He's being lambasted for it, of course, in the op-ed pages and the ditto-head
platoon of the warblogs.
A good thing, too, I'm sorry to say.
It only serves to underline the essential problem with
economic and business journalism. I'm a fan of Krugman's -- I'll admit
it. I tend to agree with him on a lot of things, including the column that's
drawn the brickbats. But this should serve (not just me) as a warning about
"heroes", every one of whom eventually stumble on their feet of clay and
fail us, often tragically.
His praise of Enron -- technically, he says he was writing
in praise of "markets"; whatever -- was "a bit naive", he says
today. Fair enough. But it stands, alongside the rest of his work.
And I think it's reasonable to expect to be judged by the best and the
worst of your work. The Fortune piece reads like a starstruck gush,
an almost pollyanna-ish response to the triumphal "new economy" moment.
Krugman had just cashed a $50,000 cheque from Enron for what sounds like
a single speaking engagement; I think I'd probably be a bit charitable
to someone who'd just given me the down payment on a house for a few hours
of my time and a few cubic feet of my hot air.
Now that moment is over, and cooler heads have prevailed.
But a cool head isn't an asset in the business press, where the business
is basically about making nice with the hot stock picks of the moment.
Gloom and caution are reserved for select columnists, senior contrarians
or popular academics -- like Krugman -- hired to give the appearance of
"balance". In the case of spectacular failures like Enron, the knives and
the schadenfreude come out -- it's assumed that the readers expect
a nice, cautionary tale of greed and tragedy, and such features are, after
all, so much more fun to write than the usual, glowing encomium to the
genius of the market and its princes.
It's hard to argue with success, even if that success
is built on some fraudulent press releases and the fervid assurances of
senior executives who are dumping their own stock while lying to your face.
Enron was able to fly high for as long as it did thanks to PBS documentaries
that didn't dig hard enough, and people like Krugman who let a bit of money
(okay, a LOT of money) get in the way of their natural skepticism.
The Enron mess (Dare I call it a scandal? Oh I dare.)
stinks all to hell, and there's a lot to be said about what went wrong,
and how it reminds us that the market isn't
notably kind to anyone below executive level. It's not a viewpoint
that appeals to true believers, though, and Krugman's unwittingly offered
himself up as a convenient scapegoat, a sideshow to distract us from the
real issues. He has tenure at Princeton and a gig at the New York Times.
I think he'll survive it better than Ken Lay -- perhaps. I know my opinion
of him won't.