Andy Grove, retired co-founder of Intel, gave a fascinating interview to Bloomberg Businessweek earlier this month questioning the continued wisdom of America’s longstanding commitment to free trade. He begins by challenging a recent Thomas Friedman column in The New York Times entitled “Start-Ups, Not Bailouts,” in which Friedman argues that vibrant, innovative start-up companies are the key to job creation, not tired old manufacturing companies.
Start-ups are unquestionably wonderful, says Grove. The problem is that once a great new product is created, most of the resulting jobs invariably go to overseas factories, mostly in Asia. America in particular is home to an impressive percentage of the world’s entrepreneurs and inventors, yet they are just a tiny percentage of our workforce. If the U.S. can’t find ways to create jobs for everyone else, Grove argues, we’re in big trouble. His prescription: Government must adopt economic policies that are strongly jobs-centric, and if that means irking the Chinese and the Indians, so be it.
Could prolonged economic stress undermine our nation’s support for free markets and effect fundamental change in our global outlook? Stranger things have happened.
Here’s the link: (http://www.businessweek.com/magazine/content/10_28/b4186048358596.htm)Read More
This week’s Economist magazine contains a thoughtful and provocative special report on debt, arguing that “for the developed world, the debt-financed model has reached its limits.” While the report is beautifully conceived and written—what else would we expect from The Economist?—it is also off base.
Debt per se is not a social, moral or economic evil. Rather, it is the uses to which borrowed capital is put that can cause problems. Borrow money to build a more productive factory or develop a better mousetrap and the world will reward you handsomely; but borrow money to play the slots in Las Vegas, and your creditors are apt to become deeply distressed. Borrowing and lending money to make sound long-term investments is and ever shall be good practice; not so borrowing and lending for short-term gratification or speculation.
Corporate leaders in developed nations are failing to deliver the all-important message that long-term investment in productive assets remains both necessary and possible. We wallow in pessimistic assessments of our economic prospects, accepting the media’s dyspeptic view that nearly every nation this side of China is doomed to decades of stagnation and declining living standards. Corporate and governmental leaders need to fire up their speechwriters. Our institutions have not lost the capacity to control their own destinies. They’ve merely forgotten how to do it. Investing and working toward solid, long-term ideas and objectives is still the best way forward—indeed, it is the only way.Read More
Vanity Fair’s June 2010 issue features an excerpt from War at The Wall Street Journal, a new book about Rupert Murdoch’s takeover of that newspaper. It was written by Sarah Ellison, an ex-Journal reporter who covered Murdoch’s determined efforts to wrest the paper away from the Bancroft-Cox family. Ms. Ellison’s excerpt relies primarily on the views of Marcus Brauchli, the former Journal editor who tried to accommodate Murdoch, only to be ousted by him in favor of a longtime News Corp. retainer. The excerpt, boasts Vanity Fair, “reveals how quickly and brutally the hope of the paper’s old regime died.” A bit of journalistic hyperbole, perhaps.
It would have been more accurate to say that the Journal had been losing its distinctive focus and persona for many years before Rupert Murdoch came along. Nearly 25 years ago, when I wrote the first independent history of the Journal’s origins, the newspaper was indeed the preeminent chronicle of business and economic affairs in the United States. Its unique role, carved out by visionary editor Bernard Kilgore at the start of World War Two, was to report, explain and expand upon everything related to getting a living in America, a subject woefully neglected by the mainstream press in the 1940s and for decades afterward.
Every article in Barney Kilgore’s Wall Street Journal was filtered through a business or an economic lens, and to millions of business-minded readers that lens was every bit as important and engaging as the political and criminal fare more typical of major newspapers. At the same time, Kilgore’s Journal meticulously reported the business doings of major industries and corporations, ensuring that anyone of stature in the business world would read the Journal daily to avoid seeming badly uninformed.
I noticed much of the Journal’s distinctiveness evaporating in the 1990s and throughout the early 2000s, as deep staff cuts led to skimpy coverage of some non-glamorous industries. It also redirected much of the news hole to coverage of personal finance, which was already well covered by a host of other publications like Money Magazine. To my eye, the Journal’s coverage of major business and financial events became less thorough and thought-provoking and its celebrated page-one “leader” articles less imaginative. At the same time, other newspapers—most importantly The New York Times—were awaking to the importance and the public fascination with business and economics after decades of giving them short shrift. In the economically flush 1950s, ‘60s and ‘70s, it was rare to see a business story on the Times’ front page; these days, it’s a daily occurrence.
Ms. Ellison makes a great deal of Rupert Murdoch’s apparent New York Times envy. “Brauchli wasn’t surprised that Murdoch wanted to attack the Times,” she writes, noting that Brauchli rushed to accommodate the paper’s new owner “with a new sports page, more political coverage, shorter stories and bigger headlines”—changes that helped void whatever remained of the sophisticated Kilgore stylebook. In the end, it seems, Brauchli still couldn’t dance quickly enough to suit Murdoch; he resigned after negotiating a generous parachute.
Is Rupert Murdoch remaking the Journal into something crass and common, as the Ellison book excerpt implies? That remains to be seen. What seems evident to me, however, is that long years of misdirection, mismanagement and aggressive cost cutting had already undermined the Journal’s standing as a uniquely wonderful journalistic product.