Remember the East Asia crisis? when the US Treasury and its IMF allies blamed that region's problems on crony capitalism, lack of transparency, and poor corporate governance? Countries were told to follow the American model, use American auditing firms, bring in American entrepreneurs to teach them how to run their companies. (Never mind that under the leadership of their own entrepreneurs East Asia grew faster than any other region - and with greater stability - over the previous three decades.) The unfolding Enron scandal brings new meaning to two favorite American sayings: ``What goes around comes around,'' and ``People in glass houses shouldn't throw stones.''
Enron used fancy accounting tricks and complicated financial products (derivatives) to mislead investors about its value. No transparency here. It used its money to buy influence and power, shape U.S. energy policy, and avoid regulations.
Crony capitalism is not new; nor is it the province of a single party. Former US Treasury Secretary Robert Rubin reportedly tried to influence the current government to intervene on behalf of Enron in its hotly contested dispute in India. In office, he had intervened when the supposedly independent board for setting accounting standards tried to clean up the accounting of senior executives' share options. Partly thanks to him, this effort to make corporate accounting more transparent was stymied.
America's willingness to provide multi-billion dollar bail-outs to airlines or to create cartels to protect its steel and aluminum industries suggests that free market ideology is but a thin guise for old-fashioned corporate welfare: give to those with the appropriate connections.