Perspective: FTX’s downfall shows the problems exposed by Enron have only gotten worse
However, the parallels between the two companies go beyond any potential acts of fraud. Enron’s rise and fall at the turn of the century was, in part, the result of the economic fragility at the heart of the information age. The FTX debacle suggests that this problem has only gotten worse in a world with social media.When Enron crashed, it seemed to symbolize the perils of a new, opaque way of doing business.
Many on Enron’s own leadership team couldn’t explain the company’s operations to reporters and financial analysts, but that didn’t seem to matter. If anything, it was a bonus. The company’s 1999 annual report to investors actually celebrated peoples’ inability to describe the business.Enron’s apparent success seemed to herald the arrival of exciting new economic possibilities. Businesses no longer need be weighed down by costly physical processes and assets.
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