Is the Enron story one of outrageous mendacity or stupefying ignorance?

As the case unfolds, corporate whistle-blowers emerge to tell of timely but unheeded warnings of accounting chicanery while the company’s top executives, some now richly retired and others holding high positions in the Bush Administration, assume the posture of the three monkeys of evil innocence. Hear no evil, see no evil, speak no evil.

Top Enron executives either were unbelievably stupid or their business practices were deliberately venal to the point of criminality. Of course, that determination will be left to the courts, but what we have learned so far provides a compelling refutation of the central ideology of modern conservatism, that huge corporations function best when freed of governmental oversight.

How opaque and out of control these enterprises must be if those who run them profess such ignorance!

Since the election of Ronald Reagan, the apostles of an unregulated market, lavishly financed by business lobbyists, have demolished barriers to corporate greed and corruption that for most of a century had served this country well.

The Enron debacle is just the most damning in a long list of evidence that the zealots of deregulation did this country, and its free-enterprise system, a terrible disservice. The financial markets are now roiled and may be permanently damaged by profound suspicion of corporate practices on the part of investors, who now realize they have good reason to fear the worst.

The deregulation ideology of modern conservatism, endorsed mightily by our current President, who cited Enron as a model, holds that big business can best police itself and that government regulation is a costly intrusion.

Yet the best case made by Enron’s top executives to explain the ignominious crash of their enterprise is that it was not possible for them to know what was going on.

Clearly, if the bosses could not get at the truth, then outside public surveillance, beyond that of complicit accounting firms, is required.

What better poster child for the failure of corporate self-policing then Enron director Wendy L. Gramm, wife of Texas Sen. Phil Gramm, who came to that $300,000-a-year position immediately upon leaving her post in the first Bush Administration as chair of the Commodity Futures Trading Commission.

Commodities trading has been Enron’s most lucrative business. Its enormous profits were made possible by two decisions pushed through the commission by Gramm in the last months of the Bush Administration that exempted Enron’s derivative trading from CFTC fraud oversight.

Authority for the CFTC to exempt Enron was provided by a law signed in 1992 by President George Bush, a close friend of Enron Chairman Kenneth L. Lay and a major recipient of Enron campaign contributions. Glenn English, the former Democratic representative from Oklahoma who was one of the sponsors of the original act, warned that the law’s purpose was subverted by Gramm’s rulings, which he predicted accurately “opened the door to serious fraud,” calling it “the most irresponsible decision” that he had come across in his eighteen years in Congress.

While serving on the Enron board, Wendy Gramm has been a leading voice in Washington, testifying before congressional committees in favor of across-the-board deregulation of corporate business. Her directorship of the regulatory studies program at George Mason University, which received a $50,000 gift from Enron, has added academic credibility to her testimony.

Yet Wendy Gramm served as a member of the Enron board’s auditors committee that had particular responsibility for making sure that the books were not cooked. That they were cooked and that she, an experienced professional in such matters, now claims ignorance of the company’s nefarious accounting practices, makes a compelling argument for government surveillance.

Enron spells the end of the Reagan revolution, which aimed at giving corporate America a blank check.

For decades, we have been mesmerized by woeful anecdotes of government meddling in the private sector, but now as the Enron scandal unfolds, there’s a growing bipartisan consensus for Congress to do its constitutionally mandated job of regulating the flow of interstate commerce in the public interest.

Otherwise, as Enron demonstrates, corporate greed knows no limits.