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Enronomics

Enronomics, is in reference to the criminal accounting "practices" of the failed US corporation Enron. It is a particularly insidious implementation of economics theory that is, in essence, the shell game[?]: Debt is transferred to facade entities, so that it can be distanced from the main entity. In order for it to work, like in the shell game, the illusion - in the accounting records, must hide any ties to the entities that carry the debt. While the debt is elsewhere, the appearance of wealth, and performance via profits is bolstered, and investment can continue at its elevated rate.

The scandals surrounding Enron also has implications for the Bush administration, as Bush had close ties to several Enron executives, mainly the former CEO, Ken Lay. The style of conduct is reported to be similar to those used by Bush's former company Arbusto Energy.

The use of the scandal-linked term Enrongate[?], though it has appeared in several papers, never achieved great popularity. The later objection and call to action by former Fed Chairman Paul Volcker[?] (that the major accounting firms are still doing "aggressive accounting" for the same firms that they audit) has also received little press play. This may be because of successfully applied media distraction (see censorship in the United States).

One innovation of enronomics is the financial metric "hypothetical future value[?]".



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