By GREGORY N. HEIRES

The Enron bankruptcy is a bitter lesson for all working Americans and a sharp warning to anyone who still believes in privatizing Social Security after the recent stock market decline.

As the disaster loomed, 29 executives sold off their stock and walked away with over $1 billion. The corporate collapse that followed hurt investors nationwide and wiped out the life savings of thousands of employees.

The Enron rip-off proved again the dangers of deregulation and raised profound doubts about the credibility of accounting firms and Wall Street.

The scandal at a company once described as the model firm of the information economy revealed the influence of political contributions and financial chicanery in government and economic institutions.

AFL-CIO President John J. Sweeney denounced "Enron economics" Jan. 31 at a labor-sponsored panel during the World Economic Forum in New York City.

"Deceit and manipulation are what Enron economics is all about," Mr. Sweeney said. "Enron's executives used money and political clout to rewrite the rules. What is really wrong with Enron is not how it fell, but how it rose."

During the go-go '90s, Enron - once the country's seventh largest company - was a chief cheerleader in the movement for deregulation of public utilities and transformed itself from an energy supplier into a financial institution that earned most of its profits from on-line trading of electricity and natural gas.

Wall Street analysts praised Enron's innovations and peddled its stock to institutional and individual investors, who have lost $60 billion in the debacle.

Congressional investigations have shown that Enron's success was based less on real production than on complex accounting maneuvers that disguised its real debt. Enron officials set up 3,500 subsidiaries that let the company avoid showing what it owed on its balance sheets. Executives made millions through the partnership scams.

But the fake profits and fishy accounting practices came to light in October, when the company was forced to report huge losses that sparked a frenzied sell-off of its stock and led to its collapse. The Arthur Anderson accounting firm has taken a public relations beating because it never raised a red flag about Enron's financial practices.

The demise of the Houston-based company has particularly embarrassed the Texas Republican establishment and the Bush administration.

When the stock plummeted, New York City's pension systems lost $109 million. They have joined a nationwide class-action lawsuit in an effort to recoup their losses. While the debit may raise the city's financial obligation to the systems, retirees' pension payments are constitutionally protected and cannot be cut.

The Enron collapse is an example of how ordinary employees are threatened when companies shift from traditional, defined-benefit pension plans - with guaranteed payments - to defined-contribution systems like 401(k) plans.

Tragically, thousands of Enron employees took huge losses in their 401(k) savings, because Enron barred them from selling company stock in their accounts as the share price dived. Executives, meanwhile, took advantage of their inside information about the company's problems and sold their personal stock holdings.

The experience at Enron has prompted calls for limiting the amount of their own firm's stock that 401(k) plans may hold and lessening restrictions on selling the stock.

It also serves as a warning about the danger of Bush's plan to privatize Social Security by setting up individual investment accounts - eliminating payment guarantees and risking retirement savings in the wild gyrations of the stock market.

Enron executives "rigged the markets, and freed themselves from all accountability," Mr. Sweeney said. "Then they used that freedom to fleece consumers, investors and even their own colleagues. Some Enron executives may go to jail, but the real outrage isn't that Enron violated the rules. The real outrage is that Enron made the rules."