Systemic failure?

Paul Krugman: “The Enron debacle is not just the story of a company that failed; it is the story of a system that failed. And the system didn’t fail through carelessness or laziness; it was corrupted.”

The more that’s uncovered about Enron, the smellier it gets. One thing that’s notable in the scandal is how few analysts and observers had any clue of what was going on. An exception seems to have been investor activist Bob Monks. His research group, The Corporate Library, gave Enron’s board a bottom-of-the-class grade E because of worries about the company’s relations with its external auditor. Rather prescient.