This is an item which won't interest most people, I'm afraid. But it's something that I've thought a lot about. When the Enron scandal broke in 2001, there was a lot of breast beating about how business journalists failed, how the press should have dug deeper and not drunk the Kool-Aid, how it should have been clear to anyone with even half a brain that Enron was a complete fraud.
Well, maybe. But I find it remarkable that 5 years later that the government prosecutors, armed with subpoena power and testimony from several inside players, have still not been able to convincingly nail Skilling and Lay to the wall. I have no idea whether Skilling and Lay will eventually be found guilty or innocent. But the lack of a smoking gun, even now, does help explain why it was so hard for the press to blow the whistle on Enron in 2000 and 2001.
I got the same impression, frankly, from reading all the books on Enron. None of them were able to convincingly say whether Skilling and Lay were dishonest or simply over-optimistic, blinded by their own belief in the New Economy. I'm not sure even Skilling and Lay could tell.
In the end, it strikes me that the real culpability in this drama lies with the accounting firm, Arthur Anderson, who were charged with being the voice of prudence and failed at that task.