It is a common refrain in headlines at Joe Romm’s Climate Progress:
Smearing and innuendo is hardly fair play. But in this case, Joe Romm has something embarrassing to hide. Just as Koch Industries might be his least favorite company, Enron was his darling company.
Specifically, Romm was not only a cheerleader of Enron (Enron is “a company I greatly respect,” Romm would say). He was also an unpaid consultant and collaborator with the infamously fraudulent division, Enron Energy Services (EES), purveyor of energy efficiency service in (gamed) long-term contracts.…
It is perhaps the most revealing ‘crony capitalism’ memo in American history–at least that is in the public domain. (I ask others to submit nominations for this (dis)honor to see if this memo does not take the prize.)
It was written from Kyoto, Japan in the afterglow of the Kyoto Protocol agreement by Enron lobbyist John Palmisano. The global green planners were euphoric that, somehow, the world had embarked on an irreversible course of climate control (and thus industrial and land-use control). Palmisano’s memo reflects that as well as the specific benefits for first-mover ‘green’ Enron.
Parenthetically, I was lucky to have received this memo back at Enron to share it with posterity. Palmisano had me in the “To” list but but purposefully did not email it to me (we were foes on ‘green’ energy issues).…
[This exploration into the theory of regulation was inspired by the role of the mixed economy in the rise and fall of Enron. The analysis applies to many current issues, such as the negative environmental effects of the supply/demand for used batteries, the lead story in today’s New York Times.]
Political economists have long recognized the challenge of getting regulation right in a mixed economy.
“A scheme of state interference for the attainment of some social or economic benefit,” stated Hubert Smith back in 1887, “will in general succeed or fail according as it is able or unable to cause a change in the nature, habits, and disposition of those whom it affects.”
A century later, regulatory economist Sanford Ikeda reached a like conclusion:
…Interventionism is really a process of entrepreneurial adjustments in both the private and public sectors, where these adjustments tend to be both unanticipated and undesirable (from the viewpoint of the interveners) owing to radical ignorance, complexity, and dispersed information.