The collapse of Enron has been grabbing headlines for months. Politicians are on a warpath to get to the bottom of the scandal. Their outrage is justified, but their vigilance shouldn’t end with Enron. Federal, state, and local governments are guilty of egregious fiscal mismanagement-on a much larger scale.
Worried about the lost retirement funds of Enron employees? It pales in comparison to the tragedy of Social Security, where millions of Americans can’t afford to save for their own retirement because they are forced to pay into a system that has massive unfunded liabilities and projects bankruptcy. Or consider Oregon’s Public Employees Retirement System, which bleeds taxpayer funds by the billions with no stoppage in sight.
Enron’s problems centered around forced investment, lack of diversification and poor accounting-all of which are even bigger problems in the public sector. At least in a free market, fraudulent or unsound practices cannot survive; eventually the offending business goes belly-up. The fall is a painful, but ultimately healthy event-industry survivors learn from their competitor’s mistakes and new providers crop up to offer more valued services.
Only the strong arm of government can support a bad business plan over the long term. Witness Amtrak or the Beaverton Round. When the offending business is the government, shareholders-read taxpayers-have no way out.
Taxpayers deserve at least as much consideration as private shareholders. Our elected officials should consider the Enron investigation a mere warm-up round, and then quickly turn their attention to the departments they oversee.
© 2006, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.