Toronto Star business columnist David Olive writes in Wednesday’s newspaper that former Enron CEO Kenneth Lay, currently on trial in Houston, has been correct in his testimony in blaming the media for the company’s downfall. Lay has blamed The Wall Street Journal, in particular, for being on a witch hunt to bring the company down.
Olive, however, has another reason why the business media should be blamed. He writes, “Yet Lay is right to fault the media, though not for the right reason. In common with many, if not most, business executives, Lay feels the media’s proper role is to convey upbeat news, as when reporters repeatedly reported Lay’s frequent assertion that, ‘We like to think of ourselves as the Microsoft of the energy world.’
“I like to think of myself as the Hemingway of the writing world, but I don’t say so because only authority figures of presumed wealth and unsurpassed intellect (Lay has a doctorate in economics) are accorded legitimacy in making sometimes-outlandish claims.
“The media’s sin in the Enron saga was to give the company a free ride during a stratospheric-growth phase in the 1990s, despite or perhaps because of opaque financial reporting and arrogant managers.
“Instead of probing Enron’s corrupt culture while there was still a company to save, journalists at Forbes, Time and Fortune, among others, showered the firm with heavy praise.”
Read the rest of Olive’s column here. Gee, if it weren’t for the short sellers telling the media something was amiss with Enron, do you think the company will still be humming along? (Note extreme sarcasm.)