Enron #3

1. What does Gladwell mean when he says that, 'Puzzles are "transmitter-dependent"; they turn on what we are told. Mysteries are "receiver dependent"; they turn on the skills of the listener.'?

When Gladwell says, “Puzzles are ‘transmitter-dependant,’” he means that the information that is received is based solely on what you are told. The pieces of the puzzle do not have to be interpreted to be understood. “Mysteries are ‘receiver-dependent,” because the information given must be interpreted, what is understood depends on what the receiver hears.

 

2. Why didn't Enron have to pay taxes on their S.P.E.'s? What would be Enron's defense? Can you name the Illogical Fallacy present?

Enron didn’t have to pay taxes on their S.P.E.s because it was just an “accounting fiction,” because the IRS doesn’t  pay attention to mark-to-market accounting; they only tax you when you make money: “you pay tax on income when you actually receive that income.” Enron’s defense would be that they weren’t making the money, they were projecting that they would make money, and the IRS taxes actual income, not projected income. The Illogical fallacy present is circular reasoning: Enron’s claim that they are making money but cannot be taxed on it, but the IRS taxes income, but couldn’t tax Enron’s S.P.E.s because they weren’t actually making money, they were projecting the money they would make.

 

3. Did Enron try to hide the fact that they weren't paying taxes?

Enron did not try to hide the fact that they were not paying taxes. However, if anyone requested information on Enron’s S.P.E.s, the “paperwork for each one probably ran in excess of a thousand pages,” so it was hardly easy for anyone to discover that Enron was not paying taxes.

 

4. Why does Gladwell claim that, 'Woodward and Bernstein would never have broken the Enron story.' Why don't you think anyone asked about Enron's financial statements? Is there a fallacy at work here?

Gladwell claims that ‘Woodward and Bernstein would have never broken the Enron story’ because they did not have a source, a leak, as they did with Deep Throat in the Watergate scandal. I don’t think anyone asked about Enron’s finances because of the huge amounts of paperwork, and also that Enron’s stock was doing so well, and the company seemed to be thriving, so no one questioned it. The ad hominem fallacy is at play here, where Gladwell assumes that Woodward and Bernstein wouldn’t have broken the Enron story, because they wouldn’t have had a source. He does not look at their investigative abilities without the help of sources, but he attacks them, for having a source.

 

5. Gladwell claims that, 'Mysteries require that we revisit our list of culprits and be willing to spread the blame a little more broadly. Because if you can't find the truth in a mystery—even a mystery shrouded in propaganda—it's not just the fault of the propagandist. It's your fault as well.' Do you agree with the implications of this statement?

I agree that if you cannot find even a bit of truth in propaganda, it is your fault as well as the propagandist. Because propaganda is based in truth, and propaganda, is 2/3 Platonic truth: it is independent of one’s belief system, and it it is public, but it is not always justified.

 

6. What was the advice of the Cornell students to anyone who held Enron stock?

The advice of the Cornell students to anyone who held Enron stock was to sell. ‘The students' recommendation was on the first page, in boldfaced type: "Sell."’