SACRAMENTO, CA - Mark Twain is sometimes credited with the remark that history doesn’t repeat itself--but it rhymes. (This is a polite version of the Edna St. Vincent-Millay remark that we are fond of quoting around the office: “History isn’t one damn thing after another; it’s the same damn thing over and over again.”)

This comes to mind with the recent collapse of Enron, the implications of which have not yet come fully into focus. Financial writers have been quick to compare the Enron debacle with Long Term Capital Management, whose smash-up in 1998 briefly threatened a worldwide liquidity crisis. Yet it occurs to us that the broader comparison that will come to be drawn is with the Savings and Loan meltdown of the late 1980s.

Both crises, it will be said by the simple-minded and muddle-headed alike, were the result of “deregulation.” Both, it will be said, were made more severe by the irresponsible and perhaps even criminal machinations of a few high fliers. Forget “Spike,” the inmate with whom California Attorney General Bill Lockyer wanted to lock up Enron’s Kenneth Lay; maybe Charles Keating instead (Samuel Insull being too remote and obscure to the popular imagination to be serviceable now).

Of course, as careful observers know, it wasn’t deregulation that caused the S & L crisis; rather it was the moral hazard of high federal deposit insurance combined with political interference with government oversight. The collapse of Enron owes more to exotic and still-murky business practices rather than the (partial) deregulation of the electricity market.

As always, it will require extreme labors to correct media and public misperception of the scene, which is in keeping with the axiom of the medieval scholastics that it is always ten times harder to defend truth than to spread a heresy. Meanwhile, there will be immense pressure to expand government power over energy markets.

In the meantime, let us keep in mind that most of the so-called “experts” are full of borscht. Alan Abelson points out in this week’s Barron’s that some financial analysts have boldly downgraded Enron stock from “Buy” to “Hold,” which vindicates the Woody Allen character who explains his occupation in one of his films: “I’m a stockbroker--I invest people’s money until there’s nothing left.” Enron is far from the only wipe-out at the moment. The Tweedy, Browne mutual fund company points out in a recent bulletin that $1,000 invested in Nortel Networks a year ago would be worth only $67 today, whereas $1,000 invested in Budweiser--the beer, not the stock--would be worth $79 today for the returned-bottle deposits. (Tweedy, Browne identifies 873 stocks that are down 70 percent or more from a year ago.)

It could be worse. You could be Larry C. Johnson, a former counter-terrorism specialist at the State Department who offered his confident predictions of future trends in a July 10, 2001 New York Times op-ed piece entitled, “The Declining Terrorist Threat.” Most Americans, Johnson wrote, “are likely to think that the United States is the most popular target of terrorists ... and have the impression that extremist Islamic groups cause most terrorism.”

Not to worry, Johnson wrote: “None of these beliefs are based in fact.” I’ll bet he bought Enron stock at $84, too.

Steven Hayward is senior fellow at the Pacific Research Institute in San Francisco, and the author of the Index of Leading Environmental Indicators. He can be reached via email at shayward@pacificresearch.org.