Saturday, April 16, 2005

Life in Phoenix, Kevin Bacon, and Ruminations on American Capitalism

I’ve been living in Phoenix nine months now! Time flies.

I’ve met some wonderful people since I’ve been here, and enjoyed being closer to my cousin and her family.

My cousin’s husband, Chris Lamont, founded the Phoenix Film Festival. Last week’s festival marked their fifth year. The event has been a huge success. This year’s featured film was Loverboy, a film produced by Kevin Bacon and his wife Kyra Sedgwick. Bacon directed. They both acted in the film with Sedgwick in the lead along with an amazing child actor Dominic Scott Kay who also acted in Minority Report with Tom Cruise.

It was a powerful film. The story featured a young woman Emily Stoll (Sedgwick) who decides to have a baby out of wedlock. As part of her grand plan she has no relationship with the father beyond the one night. After giving birth, mother and son proceed to live a very eccentric life. At first her approach to motherhood comes across as off-beat but cool and innovative. But things go too far as Emily’s attachment to her son begins to smother him, leading to trouble.

I asked Bacon a question about the film during the Q & A afterwards. I also had the “thrill” of passing him as he came out of the men’s room when I entered. To top it all off I briefly met Sedgwick after the film and gushed about how much I enjoyed it. My statements were sincere, but my celebrity worship was a little pathetic. What can I say? My cousins and their friends actually met the Bacons, had real conversations, and got their pictures taken with them. I missed all of that. Meanwhile Chris, as festival founder and executive director, was their official host during their time here.

Arizona is wonderful in the winter and spring. Since Christmas day I have been mountain biking nearly every weekend. Today we rode a trail in the Phoenix Mountain Preserve, just a few miles from my house. After a wet winter things are drying up. I saw my first snake of the year.

One of our more noteable mountain biking experiences to date came about a month ago. We were at a trailhead in Mesa, on the southeast side of the metropolis. As we geared up paramedics rushed down the trail ahead of us. We were told someone had fallen and severed his ear off, presumably hitting a rock just the wrong way. Not much later, as we started our ride we came across the poor fellow who was lying about a foot off the trail. He was well attended to and there wasn't much we could do except for be in the way. We proceeded on, passing him and looking down at him as we pedaled by. I couldn't help but feel like we were treating him like roadkill, but there wasn't anything for us to do except get in the way.

Jake is keeping me busy as he quickly grows up. He's already almost as big as Jackson was. I am afraid he will be somewhat bigger than Jackson before he stops growing.

I am currently teaching the following classes: Geo-political History, Humanities, Speech, and Marketing. This is a mix that makes sense given my undergrad degree in marketing and my M.A. in history. I've taught subjects ranging from ethics to algebra.

This is my first time with our Humanities class and I am having a great time with it.

I’ve read a number of books over the past few months. Two of the most recent are Conspiracy of Fools on the downfall of Enron, by Kurt Eichenwald and Blood on the Street by Charles Gasparino. Together they paint an ugly picture of American capitalism in action. While not prepared to through my hat to the socialists, I am a proponent of strong regulations, safeguards, and checks and balances on the capitalists.

Eichenwald’s book is especially well written. It’s a narrative of Enron told as best as he could from a fly on the wall perspective. His research was extensive. I am sure there are errors, as there are in any book, but he creates a detailed story of Enron in action. Andy Fastow, the Enron CFO comes across as the biggest villain in the story, though if you’re looking to point fingers there is plenty of blame to go around. Considered one of the top and most innovative American companies for years, and sought after by politicians who wanted to associate with popular and successful people (Democrats and Republicans befriended the leaders of Enron), Enron was rotten to the core.

In late 2001, almost overnight, Enron went from the top of corporate America to being a heap of collapsed cards. They declared bankruptcy, their stock became worthless, and thousands of people lost their jobs. At the same time Enron’s accounting firm Arthur Andersen also ceased to exist almost overnight after the corporation became a convicted felon for crimes committed related to their work with Enron. Tens of thousands of people lost jobs in that debacle.

Of course Enron’s fall was just the beginning as other high flying companies came crashing down: Worldcom, Global Crossing, Tyco, AOL Time Warner, countless dot coms, and on and on. Not all of these went bankrupt, but many did and the others lost trillions in market capitalization--meaning many investors lost trillions in their portfolios.

Gasparino’s book focuses on the three most popular stock analysts of the boom years as well as some of the regulators who have had various successes and failures in picking up the pieces after the boom ended. Elliot Spitzer, New York State’s Attorney General, comes across as a fascinating character. Successful where the SEC failed miserably, Spitzer brought his brand of justice to many wrong-doers. Yet his brand of justice is an odd one. Using a New York law he has immense power, even more than the federal government. Yet Spitzer, assuming he is sincere in his goals of fighting for the small investor, can only do so much in punishing the people and companies that were so out of line in recent years. The consensus among Spitzer, other regulators, and industry leaders is that he can not go all out in prosecuting these crimes where his prosecutions would bring down companies like Merrill Lynch, Salomon Brothers, and others. To take down such “big fish” could have such negative consequences on our financial system that even Spitzer is afraid to go that far. So the companies pay fines, some individual’s find their careers ending, but basically things continue as always.

Interesting questions are raised about the nature of our economy and the best ways of regulating it. We live in the wealthiest society of all times based on material measurements (and others), yet our institutions have has many contradictions and weaknesses, as each of do as individuals. Reading about Enron, and the other discredited or questionable players of recent times provides an interesting perspective on these issues.

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