The incredible growth of the computer industry led to increased business consolidation, making it possible for large firms to keep control of their far-flung operations by communicating instantly within the United States and throughout the world. The federal government aided the merger process by relaxing financial regulation. Media companies took the greatest advantage of this situation. For example, in 1990 the giant Warner Communications merged with Time Life to create an entertainment empire that included a film studio (Warner Brothers), a television cable network (Home Box Office), a music company (Atlantic Records), a baseball team (the Atlanta Braves), and several magazines (Time, Sports Illustrated, and People). Other mergers mirrored the trend in the media: The estimated number of business mergers rose from 1,529 in 1991 to 4,500 in 1998. The market value of these transactions in 1998 was approximately $2 trillion, compared with $600 billion for 1989, the previous peak year for consolidation.

Corporate consolidation brought corporate malfeasance, as some chief executives abused their power by expanding their companies too quickly and making risky financial deals, which put workers and stockholders in jeopardy. Such practices led to a number of scandals, including one involving the energy-trading and utilities company Enron. Operating out of Houston, Texas, Enron benefited from the deregulation of the gas and electric industry in the 1990s, which brought exorbitant profits and encouraged corporate greed. Enron’s prices shot up and its stock soared. In October 2001, information began to trickle out about insider trading, faulty business deals, and questionable accounting practices. As revelations mounted, Enron’s stock and its credit rating plunged. In December 2001, the once mighty Enron filed for bankruptcy and fired four thousand employees; its top two executives were subsequently convicted on charges of criminal fraud.