As IF Times

link Its Apple and CalPERS vs. Greenlight in stock proposal showdown – latimes.com.

While not exactly an obvious burning social issue, the battle that is developing between a stockholder, (actually hedge fund manager) and the corporate behemoth Apple is a good example of why businesses have such a hard time in modern America.  Unless you’ve been in a coma for the past 10 years, it’s widely accepted that Apple has been the most successful of American corporations of the past decade, possibly ever, parlaying innovative thinking  and creating must-have items into unparalleled commercial success.   People fortunate enough to have owned the stock from a decade ago at around 10 dollars a share were rewarded with a meteoric price rise to just over 700 last fall.

And yet Steve Einhorn of hedge fund fame, thinks that he is a better judge of how the company should employ their growing cash asset as if he were a tech visionary.  While Einhorn uses the red herring of “returning the cash” to Apple’s shareholders, in reality, he is second guessing the very business strategy of a company that has outperformed anything in the U.S. stock market in recent memory.  It’s as if he dines in the nation’s best restaurant and then decides to tell the chef how to make a better Bearnaise sauce.  Despite the success that Apple has become through the vision of Steve Jobs, the company is obligated to now spend untold money on lawyers to defend themselves from someone who thinks they could do better.

Wielding the green eye-shades of backroom bookies measuring quarter to quarter performance,  large  institutional investors can successfully coerce public  corporations in many ways; from what suppliers they use, to where they operate, whom they hire, or even the actual core business direction.  The rise of activist investment funds such as Einhorn’s can successfully bully companies into actions that can end strategies that have long term growth potential for the sake of short term gains.   While those with Einhorn’s mentality may be lauded for their short term investment shrewdness, their ilk are responsible for much of what ails American industry.  Of course none of this happens without the everpresent threat of legal action.  The bully tactic of using lawyers to advance a particular cause has of course become high art here in the West.  While the popular discussion these days is about restricting the access of guns to the average folk, the epidemic of lawyering up has continued unabated causing immeasurably more and longer term harm to society.

The business of Wall Street has gone from providing an environment designed to seed and grow corporations to that of being a virtual casino in which the actual businesses themselves are irrelevant; they are merely statistics for comparison on the worksheets of MBA’s and bankers like cards in a poker hand.  Some may notice the similarity to the dynamic present in today’s professional sports business, notably football.  While the actual sport itself generates it’s own circle of economic influence, the ancillary and derivative businesses of wagering are thought to be as big or bigger than the legitimate monies involved with the actual sport.  So much money in fact that there are ongoing suspicions of game rigging to benefit large bettors. This has happened to the investment business.  The problem is that the derivative tail winds up wagging the underlying dog.  Eventually, it all gets corrupted and the entire enterprise is threatened with collapse.  In a casino at least, you are given the illusion that you can win.

It’s laughable to accept that Einhorn has a better feel for what Apple can do with their cash horde, since to my knowledge, he has no experience at all in running a real operating company, much less a leading edge tech giant.  Presumably, if he did, he would start a competitor.   Luckily for him, the free market provides a mechanism for venting his frustration for not getting his way.  He can sell.

link ‘Too Asian’? – Canada – Macleans.ca – EHDT Studios.

There is a great series of print ads by Intel, the computer chip giant, which shows contrasting images.  In one side by side contrast, college aged kids are depicted in some kind of aerobic class and on the other side, it shows an image of two similar aged kids sitting over a chessboard in a cafeteria.  The caption is, “Your workout” and then “Our workout”.  As the image on the top of this piece shows, another juxtaposition is “your rockstars, our rockstars”. 

Obviously the ads are meant as tongue in cheek depictions of the people behind the Intel corporation.  But the stark contrasts have an all too accurate and poignant root in reality.  When you step back and consider our culture today, most of what’s considered popular are pursuits that,  while fun and amusing are all about hedonism and little to do with achievement.  Like it or not, this is a bit of a detour for western society, long thought of as founded on the Protestant work ethic.

Somehow the culture of self actualization has taken root and navel gazing is no where in the world practised as artfully as in much of Western society.  One could argue that this is the hallmark of an advanced society.  I think that’s a specious position.  With the great wealth available in western society, it’s natural to figuratively sniff the roses.  One of the most active discussions going on now is the debate to allow marijuana as a legal substance since this appears to have broad appeal.  According to some old statistics from the Journal of the American Medical Association, $1.42 billion dollars a year was spent on advertising alcoholic products in the year 2000.   There’s no reason to believe that number would be lower today. Like tobacco ads of old, images are sold of the lifestyle associated with consumption of such products.  And people buy it. Lifestyle sells.  Unfortunately, now we’ve come to the point of wanting to have the lifestyle without the means of getting there.

We celebrate the accomplishments of sports and entertainment people and pay them astronomical salaries for accomplishments that have more to do with genetic good fortune than hard work.  All of this is wonderful and perhaps are indicators of an advanced society.  Unfortunately, the development of the rest of world has brought forth waves of people with ambition, talent and a work ethic that rubs up against the less urgent attitudes of the West.  To many of these people, the value set embraced by western society (at least depicted in pop culture) is amusing at best but not the goals to be strived for in the harsh reality of life.

The heroes of this wave of people are the likes of Gordon Moore, Bill Gates, Steve Jobs and perhaps even Jeff Bezos.  They have built not only companies but entire industries based on the strength of brainpower.  On this intellectual plane, they can compete.  Anyone who has been paying attention may have noticed that advances in technology have been the conspicuous engines for commerce over the past 30 years and will continue to be so moving forward.  A society that does not replenish and encourage its members to stay on the leading edge of this is doomed to be in the backwash of  the next economic wave.

The linked article referred to some claims that universities in North America were implementing subtle quotas in their admissions so as to limit the amount of Asian students because of concerns over their academic dominance.  If true, this is only doing harm to the progress of society.  The logical tack is to encourage the best/brightest and most diligent to excel in their education so that the benefits accrue to society later on.  Kids with the old Protestant work ethic should be encouraged, even if they happen to be Asian.  Given a choice I’d bet 99.9% of most hard working Asian kids would rather play basketball or baseball for a living.  Or act, or sing.  But the realities just aren’t there.  To try to hold off kids that are smart with a good work ethic makes as much sense as keeping Angelina Jolie in a closet for being too pretty or limiting how many 7 footers are allowed in the NBA.

The world is becoming smaller and competition will only get more intense.  We’d better make sure we have the players to compete in the new game.