American History27 Dec 2009 08:00 am

Not Quite The Smartest Guys in the Room

In 2001, Enron, after being named “America’s Most Innovative Company” by Fortune magazine six times, collapsed. How could something like this happen? How is it possible to hide hundreds of millions of dollars worth of losses?? And what is a “financial derivative” — that thing that played such a large role in the entire economy’s collapse a few years later — anyway???

Answering those questions would take more than a single post, but today’s entry on Enron in the Intellectual Devotional’s American History edition seemed like a good excuse to point our readers to some of our favorite sources on all matters financial:

Print: If we want to read something that will help us understand the ins and outs of world finance, we turn to The New Yorker magazine. Don’t worry: we’re not talking about 30-page articles on the history of ketchup. We’re talking about a weekly, one-page feature: James Surowiecki’s “Financia. Page.” A few hundred words on everything from the foreclosure crisis to the moral hazards of bailouts. Check out his most recent piece on Tiger Woods’ collapsing endorsement deals, and read on from there.
Radio: The mortgage crisis. Bank failures. Health care reform. Issues like these have dominated headlines in recent months, but they take much more than a headline to explain. Whenever we’ve gotten particularly confused, we’ve turned to the Planet Money team at National Public Radio. They have a free podcast, and we feel just that much smarter and more informed every time we listen to it. Subscribe here.
Film: This is a post related to Enron, so we would be remiss if we didn’t mention Alex Gibney’s 2005 documentary The Smartest Guys in the Room. In it, Gibney follows two Fortune reporters, Bethany McLean and Peter Elkind, as they uncover the layers of Enron’s remarkable act of fraud. Dry as it sounds, there’s never a dull moment.