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US: The Enron case - Delaware and Rep. Michael N. Castle



The Enron case is important to the US and the world since it raises the issue of the justice of the US capitalist system to the small investor and to the world at large. The latter was the theme of the World Social Forum, held in Pôrto Alegre, Brazil, to counter the New York meeting of the World Economic Forum. The fairness of the system to small investors, a large percentage of the US population, is our most immediate concern. I can understand their dismay. Years ago, when my activities concentrated on Latin America, I was friendly with Pan American, which served the region, and invested my modest savings in it. Virtually the flagship airline of the US, it seemed as solid as a rock, I did not heed warnings, with the inevitable result. I could not believe that such a national asset would be allowed to go bankrupt. I was unaware of the influence of the theories of Joseph A. Schumpeter, who argued that failing companies should be allowed to go bankrupt. This was economic Darwinism. In fact the US has bailed out some companies, notably Chrysler, but that seems to be the exception. The congressional hearings on the Enron case have lamented the impact on small investors, but have not as yet discussed ways to help them. They have concentrated on the system. A congressional hearing featured Harvey Pitt, chairman of the Securities and Exchange Commission, an articulate and sober individual. An active questioner was Michael Castle, Republican of Delaware. Never in all these debates have I heard mention of where Enron was incorporated. It is said that corporations are often incorporated in Delaware because the conditions there are more favorable (?). Could these conditions, which I do not know or understand, be a contributing factor in corporation scandals? I am copying this to Representative Castle, and I await his reply.

Ronald Hilton - 2/5/02


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