Although the import tariff has been reduced considerably since the creation of the General Agreement on Tariffs & Trade in 1947 (today the World Trade Organization), governments persist in arguing that maintaining their protection prevents dumping, protects "strategic industries," and guards against the impact of cheap foreign currency and labor. My feeling is that companies want to make, not lose, money. Competition would increase innovation, and in an open country it should redistribute employment from less efficient companies to highly efficient ones.
Santiago, Chile Europe may not be an oasis of textbook capitalism, but it certainly doesn't require a few good Enrons either ("Why a few Enrons would do Europe good," European Business, Dec. 24). The spectacular rise and fall of the energy-trading goliath didn't serve to validate Joseph A. Schumpeter's trumpeted theory of "creative destruction." Enron Corp. wasn't displaced by younger, nimbler rivals. It was a technology innovator, not an imitator.
The largest bankruptcy in history says less about the American economy's dynamism and more about our regulatory laxity. The Enron story is one of creative accounting, not creative destruction. Note to European bureaucrats: Steer clear!
St. Paul, Minn.
In the "creative destruction" of the Enron debacle, a few top executives created wealth for themselves while destroying the livelihoods and pensions of hundreds. John Rossant pretends that the only alternative to Enron is European feather-bedding. Rather than condemning both, he elevates the lesser evil to a positive good.
Philip D. Roos
Jefferson City, Mo.
John Rossant doesn't give American politicians nearly enough credit in his commentary. When it comes to economic meddling, our leaders can prop up a dying company just as well as the Europeans can. Take the recent U.S. airline bailout, for example. The money our government handed over (with almost no strings attached) went far beyond the losses they suffered in the wake of the September 11 attacks and delayed the day of reckoning for many of these losers. The Europeans, by contrast, were models of restraint, allowing two national flag carriers to go bankrupt.
San Jose, Calif. "Enron: Let us count the culprits" (Editorials, Dec. 17) completely missed the mark. The accuracy and adequacy of Enron's external financial statements is primarily the responsibility of the management of Enron, not that of the external auditors. Collusive behavior from senior executives, purposely intended to deceive auditors and third-party users of financial information, cannot be regulated out of existence with the passing of new accounting rules or the stroke of a pen.
We must reinstate the historical relationship of the finance organization scrutinizing the operations branch of the company: Eliminate the present practice of having the chief financial officer report to the CEO, and restrict CFOs and other high-level finance officers from being paid bonuses based on the company's quarterly or annual results.
I also propose that any company requiring a Securities & Exchange Commission audit must change auditors every three years, and retain the same auditor but once every nine years. That way, there would be at least three separate auditors of a company's financial statements during a rotation.
Gregg M. Stieber, CPA
Sammamish, Wash. Now, let me get this straight ("Excite@Home: A saga of tears, greed, and ego," Information Technology, Dec. 17). The company had a flawed acquisition strategy. It had unrealistic, grandiose plans. It overpaid for acquisitions. It would not raise prices to provide much-needed revenue. It has to sell off acquired assets for less than it paid for them. And, ultimately, employees and shareholders are being stabbed in the back. Are you talking about Excite@Home or AT&T? Maybe both companies have the same core problem: C. Michael Armstrong.
Armstrong's expensive broadband/last-mile strategy for AT&T was unrealistic from the start. Had he instead used that money to create the ultimate wireless company--prices as low as land-based telecom, unrivaled reception, and a wireless phone in every hand--he might not be tearing AT&T apart today. You know, Mr. Armstrong, Bill Gates did pretty well with his concept of a PC in every home, and "air" can be that last mile.
Ramsey, N.J. Despite Paul Raeburn's expectations for a biotech boom, the bubble may turn out to be more of a foam ("A biotech boom with a difference," American News, Dec. 31). Unlike the Internet Big Bang, biotech will not have the impetus of online commerce or the productivity enhancement from digital hardware and software. There is no such quid pro quo to be derived from pharmaceutical purchases. The biotech market will be real and relentless, but it is unlikely to create a potential economic panic and job derailment--at least not in this downturn. It should remain steady, without the riptide of an exuberant swell followed by a pelting crash. For a long-term investment, yes. For a short-term windfall, no.
R. Lyman Ruth
Chippewa Falls, Wis.