Enron: The Smartest Guys in the Room Page #10

Like a forced

outage type thing?

Right.

Those guys

at the flip of a switch

could just yank

the California economy

on it's leash whenever

they wanted to.

And they did it,

and they did it,

and they did it.

And they made so much money.

The heart of it is

that an industry

that went for a hundred years

from the days of Edison built

the best electrical system

in the world,

sold the power at reasonable

prices to consumers

and was very reliable

was all of a sudden

turned into a casino.

These strategies made

some money for Enron.

But the real money was

made by betting

that the price of

energy would go up

It did.

And the West Coast traders made

nearly two billion dollars

for Enron.

You can't treat electricity

like you treat oranges.

It's the lifeblood

of the society.

It can't be stored.

You can't turn

these people loose

and let them

just have a quote free market

because a free market is God

Damn expensive to

the customers.

There would be

ample supply available

at the right f***in' price.

Oh, sure there would.

It wasn't just Enron

"Every company traded

according to the rules

that California put up there.

We're the future of Enron.

And we're f***ing making half

a billion dollars for Enron.

Can you believe that?

We'll definitely retire

by the time we're 30.

We're talking

about a commodity that

normally trades

in the thirty-five,

forty-five dollar range.

High prices are when it

gets into the fifties.

A thousand dollars?

Prices aren't going to stay

at 1,000 bucks forever.

It weeds out the weak

people in the market.

Get rid of them

and you know what,

the people who are strong

will stick around.

And the Enron traders never

seemed to step back and say,

'Wait.

Is what we're doing ethical?

Is it in our best

long term interests? '

'Does it help us

if we totally rape California? '

'Does that advance our goals

of nation-wide deregulation? '

Instead they sought

out every loophole

they could in order to profit

from California's misery.

Temperatures in California are

hitting higher than 100 degrees

fueling wildfires and fears that

California's strained power grid

could once again near collapse.

What's happening?

There's a fire under

the core line.

It's been de-rated

from 45 to 2100.

Burn, baby, burn.

That's a beautiful thing.

I was never comfortable

on the trading floor at Enron.

And if I had questions,

I didn't ask them,

because I didn't want

to know the answer.

You know,

I didn't want confirmed

what I suspected might be true.

That what I was doing was,

in fact,

unseemly or was,

at least, unethical,

if not worse.

Why did the traders do

what they did?

Was it their multi-million

dollar bonuses

or had Enron found

a way to exploit

the darker side of

human behavior?

In the early

60's Stanley Milgram

tried to figure out

what characteristics

there were of evil people.

Was there an evil strain

or could normal people

do really bad things?

And so he set up

this experiment.

In the experiment

he had an actor playing

an experimental subject

and a real experimental subject.

Want to step right

in here and have a seat?

They went into this room

and he had an experimenter say,

'we're going to see

if mild electric shocks

will help people

memorize lists.

Incorrect... You'll now get

a shock of 75 volts.

Soft air.

He kind of did some

yelling in there.

The Milgram Experiment has

a lot to say about Enron

because I think people lost

their sense of morality.

Like Milgram,

once you accepted the idea

that behaving

inhumanly was okay,

you could do anything.

And the shocks increased

with the number

of mistakes that they made.

I can't stand the pain!

Let me out of here!

He can't stand it.

I'm not going to kill that man.

The subject,

the real subject is begging

the scientist-looking

person to stop too.

And the scientist only says

'the experiment requires

that you continue.

Please continue. Go on, please.

You accept all responsibility?

The responsibility is mine,

correct.

Please go on.

In a way,

Skilling was almost like the guy

telling those people below him

it was okay to up the power.

California's Electric Utilities

may have to pull the plug on

millions of customers.

It's the f***ing coolest thing

I've done in a long time.

Holy f***, yes.

You gotta love the west.

Oh.

During the height of

Wednesday's blackout,

fire crews had to free people

trapped in elevators.

All that money you guys

stole from those

poor grandmothers in California.

Yeah, Grandma Millie, man.

She's the one who couldn't

figure out how to f***ing vote

on the butterfly ballot.

Now she wants her f***ing money

back for all the power

you've charged right up her ass.

You must continue.

Go on, please.

You're gonna keep giving him

what... 450 volts every shot now?

That's correct. Continue.

It's kinda hard to say

well we should be,

you know we shouldn't do this

even though it's allowed

because you know.

I mean, that's what we do.

Right.

Best thing that could happen

is f***ing an earthquake.

Let that thing float

out to the Pacific.

Put up f***ing candles.

Milgram's discovery

was disturbing.

Fifty percent of

the subjects were

willing to shock to the death,

so long as the commands came

from a seemingly

legitimate source.

Tonight I'm declaring

a state of emergency

in California to give the state

the authority

and the resources to

keep the lights on

in California.

The Governor,

who's been basically

capitulating to

the demands of the energy

companies and utility companies,

needs to put his foot down.

We wanted the Governor to send

in the state police

or the National Guard to seize

control of the power plants

and put it back on-line.

And I thought we didn't have

to take over every plant,

we really only had to

take over one.

'Cause then they would

know he meant it.

I'm going to get

the nine billion dollars

back that Enron,

Dynergy and Reliant stole

from us and get it back to you.

Despite what the

people of California

think Enron's making money

despite California,

not because of California.

The year-long energy

crisis would cost

the state of California

$30 billion dollars.

The markets in California are

the most regulated market

in North America today.

And that's what's

causing the problem.

California,

it never deregulated.

Enron, buy stock today.

Thank you very much.

We are doing the right thing.

You're the good guys.

We are the good guys.

We are on the side of angels.

Oh, I can't help myself.

You know what the

difference is between

the state of California

and the Titanic?

This being a web cast,

I know I'm going to regret this.

At least when the

Titanic went down,

the lights were on.

Jeffery Skilling,

how's it feel to make a killing?

A top executive at one of

America's biggest power

companies received a raucous

welcome in San Francisco tonight.

Protestors heckled Enron's CEO,

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