People's confidence was put in question for such an important matter. It showed common people, who are not connected to everyday financial news the way in which money can be made through illicit means under the rules and regulations of the state and of the accountancy system. Moreover it broke the trust of investors, of employees, and of stock owners. This can have a long-term effect as investing companies will be seen with more circumspect eyes by the public and by the authorities.
Another major effect the Enron scandal had on the population of the city was emotional. As stated above, the Enron company was considered to be one of the most important symbols of the American business environment. However, in 2006, its assets were sold worldwide, and thus its name shattered (Thomas, 2006). It was perceived as a shameful deed and one America will probably be identified with for decades to come.
Despite these feelings which remain unquantifiable, there are effects which can be measured in numbers. In this sense, one of the most important aspects of the Enron case was the social one. More precisely, given that parts of the shareholders were employees, it was them who actually lost most of the money when the company failed for bankcrupsy. In this sense, "The expected payments to Enron's lenders fall well short of other bankruptcies. Bondholders in the WorldCom bankruptcy, the only Chapter 11 case larger than Enron's, are to receive 36 cents on the dollar" (The New York Times, 2003). Thus, comparing with the...
This comes to point out, aside from the financial issue, the matter of trust in the employer and in the capitalist way of earning money.
Overall, it can be said that the Enron scandal indeed represented one of the grey moments in the history of the U.S. And of that of Huston. For the U.S. It was the failure to control one of economy's giants. For Huston it was a shock to have something as big as this happen in their city. It was an effect on the trust people share in the public authorities, in businessmen, and, above all, in the system which governs the country locally, regionally, and at federal level.
References
Bala, Dharan, G. And Bufkins, William R., Red Flags in Enron's Reporting of Revenues and Key Financial Measures, Enron: Corporate Fiascos And Their Implications. New York: Foundation Press, 2004.
Fusaro Peter C.,Ross M. Miller What went wrong at Enron: everyone's guide to the largest bankruptcy in U.S. . New York: Wiley, 2002.
The New York Times. Enron's Plan Would Repay A Fraction of Dollars Owed. 2003. Retrieved
from http://www.nytimes.com/2003/07/12/business/enron-s-plan-would-repay-a-fraction-of-dollars-owed.html
Thomas, Cathy Booth. The Enron Effect. Time Magazine. 2006. Retrieved from http://www.time.com/time/magazine/article/0,9171,1198917,00.html
