19 Apr 2009 3:17 pm   //   Filed under: Hard times, Movies

The journalism-proof company

Recently I sat down to watch “Enron: The Smartest Guys in the Room,” the 2005 documentary about one of the biggest business failures in American history. This movie literally put me to sleep. Why?

I think it’s because Enron, despite being an epic failure, is just a bad story. Enron traded products like natural gas, something you can’t actually see, and electricity distribution, which is just a concept. “The Smartest Guys in the Room” is stuck using footage of mirrored-glass office buildings with rows of empty workstations inside. The executives profiled in the film aren’t especially interesting. Their motivations—to make money and ruthlessly crush the competition—are easy to understand, and their downfall is a simple morality play. And what exactly happened to Enron is so hard to explain that if the most interesting person in the world told a story about it, you’d be bored to tears.

Enron built a journalism-proof company. Some reporters understood the company was doomed and even managed to get articles published before the company collapsed. Nobody paid any attention. It was just too boring!

The opposite of Enron, in terms off journalism, is General Motors. A proud, historic company, it has tens of thousands of workers and vast acres of American industrial infrastructure at its disposal. You’ve got great visuals: Cars, trucks, gigantic assembly plants, rusting factory towns. You’ve got personal stories of unemployed workers. The product is something almost everyone uses. GM has been the subject of countless books and articles, and two of the best documentaries I’ve ever seen: Roger & Me” and “Who Killed the Electric Car?”

As a result, everybody knows GM is on the brink of failure—unlike Enron in late 2001.

Unfortunately, most companies don’t lend themselves to popular stories as neatly as GM. Did we really learn anything from Enron? The AIGs and Countrywides and Washington Mutuals and Wachovias and Merrill Lynchs are still poisoning our economy with schenanigans similar to those that brought down Enron. Our economy has stopped rewarding people who create stuff and instead rewards people who trade stuff that already exists. Then it was energy, this time it’s debt and real estate.

Journalists and regulators know what’s going on. Some watchdogs actually bark. The problem is human nature. People don’t want to hear barking, they want to hear a good yarn.