Great Holman Jenkins column today, Hillary vs. the Wisdom of Crowds, commenting on Mrs. Clinton’s speech last week in New York:
On the subject of how the market lacks a long-term perspective:
The same market that shows zero patience with McDonald’s shows endless patience with Amazon. Isn’t that what we want: Every company to be analyzed differently, treated differently, in light of its particular set of opportunities?
Mrs. Clinton claims “we also know that publicly held companies facing pressure from shareholders are less likely to invest in growth opportunities than their privately held counterparts.”
Uh huh. That sounds like a rigorous claim carefully resting on comparisons of apples and oranges. But if true, won’t the problem fix itself by public companies turning themselves into private companies?
The greater problem is the dearth of high-growth companies creating jobs and the next round of innovations that make all our lives happier, healthier, and more comfortable:
Mrs. Clinton would do better to worry about a sharp falloff in new business starts in the past decade, not to mention a generally depressed investment mood that has businesses of all sizes pushing earnings back to owners rather than building factories and developing new products. How does raising taxes on entrepreneurs improve matters? Not explained.
Capitalism will never be heaven, but to imagine that America’s trouble is not enough rules, that the tax code is not complicated enough, that its distortions are not distorting enough, seems insane.
Funny jab – I remember this too! All the worry about how the Japanese were going to eclipse us. He could have mentioned how we sold them 30 Rock at about the same time.
On the substance, it was enough that the critique be so banal, so overly familiar as to be digestible without thought—which it certainly was. To claim economic problems stem from “short-termism” in the management suite is a moldy-oldie dating back to the mid-1980s. We’ll give one amusing example because it doesn’t involve a politician: Management guru Michael Porter in 1992 derided shortsighted U.S. businesses for investing only 9% of GDP compared with 14% for Germany and 20% for Japan—just as the U.S. was embarking on a two-decade burst of creativity that gave the world the Internet.