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Why Congress Investigates Enron


Members of Congress are certainly licking their chops over the Enron affair. Now why would that be? Could it be that they cannot resist investigating a company that apparently lied to the public, misrepresented its financial situation, kept lousy records, engaged in conflicts of interest, and acted covertly?

Wait, that sounds familiar. Why, the federal government does that routinely — the very government overseen by the congressmen who want to hang Ken Lay & Co. from the nearest tree.

Could it be that Enron gives them a chance to prolong the day when the public finds out that the government engages in gross misconduct every day of the week?

At least it’s possible for Enron to go bankrupt. What can we do about a corrupt government? Vote them out? Not bloody likely, considering all the ways incumbents have to keep themselves nestled cozily in power. And if the dishonestly named campaign-finance reform bill ever makes it into law, it’ll be even harder to throw the bums out.

Another thing that we can say in favor of Enron, in comparison with the government, is that the Houston firm could never threaten us with prison if we didn’t send it money. Enron might have lied to investors, but at least it didn’t commit armed robbery.

Lest people take this to be just another anti-government rant, let’s remember a few things. The federal government has regularly lied to the American people for many years. Every now and then some investigative reporter digs up a case of systematic official dishonesty — usually so long ago that the perpetrators are gone from the scene. For example, a new book about President Lyndon Johnson confirms what many have long thought: that the “Gulf of Tonkin incident” was a fabrication that led to the deaths of 58,000 Americans and 2 million Vietnamese in an obscene and illegal war. One could multiply the examples many times. Shall we bring up Pearl Harbor?

One example is as fresh as this morning’s milk: The Defense Department has announced it might place false news stories in the foreign press. The only difference here is that it made the papers so soon. It would be naive to think the policymakers haven’t already lied in its the war on terrorism. What would you call dropping hundred-dollar bills with George Bush’s picture in Afghanistan? Or distributing a doctored photograph of a beardless, mustachioed Osama bin Laden wearing a Western business suit?

As far as financial disclosure goes, the government does many things off the books to hide its true burden. And it is hardly one to lecture about keeping records. The Government Accounting Office regularly reveals that federal department records are a disaster — including those of the Internal Revenue Service, which demands that you keep immaculate records if you want to stay out of the hoosegow. The Pentagon routinely “misplaces” billions and billions of dollars. That’s when it’s not spending billions on useless weapons that are built in some influential congressman’s district.

I don’t recall reading that Enron ever conducted secret experiments on unwitting Americans, but our government has done it more than once.

Then there are the lies that everyone is so used to, they are taken for truths. For example, nearly everyone believes that employers pay half their employees’ Social Security “contributions.” (Another lie: they’re taxes.) Wrong! Employers simply send money to Washington that they would have paid to their employees had the government not demanded it. As someone once said, businesses can’t pay taxes; they can only collect them. The mirage of an employer contribution was deliberately created to fool the American people in order to make Social Security more palatable. It’s a lie.

Of course the biggest lie of all is that Social Security has any assets for future retirees. Wrong. The coffers are empty. All government has is the power to tax.

I’m not saying Enron did nothing wrong and that the dishonest executives shouldn’t have to pay restitution. Rather, I’m saying that we should take congressional sanctimony for what it is: a hypocritical smoke screen intended to distract us from the legal crimes committed every day by the executive, legislative, and judicial branches of the U.S. government.

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    Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.