Enron: The Smartest Guys In The Room
great film documenting the “rise” and fall of enron. it lays out in good detail how fastow, lay, and skilling built the paper empire using various schemes like mark to market accounting, opening bogus funds, lying to investors, bilking california out of $30+ billion to inflate profits, etc. it looks at a range of effects this had including the almost complete loss of personal 401k accounts of pg&e and enron employees, the myriad problems (economic and political) caused in california from the energy crisis, the thousands of jobs lost by enron employees and employees of firms (arthur anderson being the largest) associated with enron. it portrays enron’s culture as one of greed, pride, machismo, and a darwinian world view. for example, skilling introduced an employee review process which mandated at least 10/15% of the employees receive the lowest grade possible on his 1-5 scale. these employees would then be let go. the film uses specific examples of failures like the one in dabhol, india which lost $1 billion for the company, yet yielded millions in bonuses for the executives who put the project together. it documents enron’s role in the california energy crisis, like energy traders taking power plants offline to increase energy prices. at the same time it shows how arthur anderson and banks like citibank, merrill-lynch, and chase were complicit in enron’s attempts to mask their massive losses. they explain the culture of enron’s rank and file through evocation of the milgram experiment; a great way to explain how people could have done what they did, at the same time it’s a stunning indictment of humanity.