15 of 17 people found the following review helpful
This review is from: The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron (Paperback)Not having read any other books about Enron, I came to this one not knowing what it was they were supposed to have done and ignorant of how it had all worked out. The book was published in 2003, so it doesn't cover the recent death of Enron founder Kenneth Lay, or the court verdict on former COO Jeff Skilling (guilty of 19 out of 28 charges). But it does do a fantastic job of explaining how a bunch of arrogant MBAs made a global phenomenon out of a company that didn't earn much cash and wasn't very good at providing the service its customers paid for. The title is bitterly ironic: Enron prided itself on its cleverness, but if stupidity has something to do with consciously walking towards self-destruction when you should absolutely know better, then the architects of Enron were phenomenally stupid.
I came to this book knowing little about corporate finance, and the authors are expert at doling out just enough information so that you can follow the insanely complicated financial transactions that made Enron appear to be far more substantial an entity than it really was. The characters are a fascinating rogues' gallery of people I wouldn't trust to sell fried dough out of a handcart on Boston Common: Skilling, arrogant, aggressive and downright unpleasant; Chief Financial Officer Andrew Fastow, blithely skimming off millions from the deals he oversaw that enabled Enron to borrow money from itself and chalk it up as earnings; Kenneth Lay, endlessly complacent and blissfully untroubled by the fact that his company was built on illusions practically from the start. My favourite moment of high comedy is when, just as the company is beginning to crumble, Lay gives a speech to Enron employees, reassuring them that they'll ride out the current crisis. During the ensuing Q&A, he is handed a question from the audience: "I would like to know if you are on crack. If so, that would explain a lot."
This is a brilliant and shocking book, and a vitally important one because if a company like Enron can become so big so quickly, on the basis of so little actual achievement in the way of providing services, then capitalism is a lot more unhealthy than many of us had begun to suspect.