How politicians must respond to Satyam.

Ken and Raju

How politicians, who value capitalism more now, must respond to Satyam.

Satyam's meltdown makes Enron comparisons inevitable. But Enron was a more creative fraud. It was trading in something called weather derivatives when it went bust and its special purpose vehicles (where losses were hidden) are to Satyam’s cooked books as Hyderabadi biryani is to curd rice. Plus, politics was mixed up in the Enron story in a way it isn’t in the Satyam story. This has an obviously good implication. But politics needs to get mixed up in scandals like Satyam. The implications will be even better.

 

It is obviously good that there is, as yet, no evidence of Enron-like political shadiness in the Satyam affair. Remember that the late and unlamented Kenneth Lay, who was Enron’s chief when the company went bust, was a chum of George W. Bush and a bigger chum of Dick Cheney. Wendy Gramm, wife of Republican Senator Phil Gramm, had chaired a committee on energy regulation in 1993 that had exempted energy trading instruments from regulation. Mrs Gramm then joined the Enron board and Enron proceeded to lose over the years tonnes of cash in energy trading. Before Enron went bust it made several calls to the White House and the Capitol. True, Republican politicians didn’t rescue Enron. But that’s a tribute to the American system’s taste and capacity for retribution when big bad things are revealed.

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