Enron; Wendy Gramm; Mercatus Center Regulatory Studies Program; Enron Loophole

The most fateful Mercatus Center hire might have been Wendy Gramm, an economist and director at the giant Texas energy company Enron who was the wife of Senator Phil Gramm, the powerful Texas Republican. In the mid-1990s, she became  the head of Mercatus's Regulatory Studies Program. There, she pushed Congress to support what came to be known as the Enron Loophole, exempting the type of energy derivatives from which Enron profited from regulatory oversight. Both Enron and Koch Industries, which also was a major trader of derivatives, lobbied despartely for the loophole. Koch claimed there was no need for government policing because corporations' concern for their reputations would cause them to self-regulate. (188)