In reference to the article by Maria Bartiromo ("Romano Prodi Opens Up," Face Time, Dec. 4), may I point out that Professor Romano Prodi never intended to refer to a plan by the Italian Government to take an ownership stake in Telecom Italia.
In addition, the fact that the article appeared nearly 10 weeks after the interview between Professor Prodi and Ms. Bartiromo should have required an updated record at this late date to avoid this unfortunate misinterpretation.
Spokesperson for Romano Prodi
Prime Minister of Italy
Michael Mandel offers important insights into the limitations of national economic policy in a global economy ("Can anyone steer this economy?," Cover Story, Nov. 20). However, his identification of Paul Romer as the person who suggested first, in the 1980s, the Big Idea that innovation is important to the economy is way off the mark.
Romer's New Growth Theory is an important contribution, but the importance of technological innovation and change to the economy was recognized decades before Romer. Robert Solow's 1957 paper on the subject earned him a Nobel Prize in economics. The book Technological Innovation for a Dynamic Economy, which I co-edited with James Utterback, is only one of many treatments of the relationship of innovation to economic performance that appeared well before Romer's work.
Christopher T. Hill
Professor of Public Policy & Technology
George Mason University
The basic dynamics of innovation-growth linkages were first emphasized by Joseph Schumpeter and Karl Marx some 94 to 158 years ago. They were highlighted econometrically during the 1950s by Robert Solow, Jacob Schmookler, and Solomon Fabricant. Detailed analyses were provided during the 1960s by several economists, including Schmookler, Zvi Griliches, Richard Nelson, Edwin Mansfield, Christopher Freeman, William Nordhaus, and Edward Denison.
That the U.S. enjoyed a comparative advantage in international trade from innovation was shown in two February, 1967, articles, written inter alia by the leading scholar on multinational enterprise, Raymond Vernon.
Innovation has long been recognized as crucial for economic prosperity. The intellectual history should be characterized accordingly.
John F. Kennedy School of Government
Innovation policy is miscast as one of the four big ideas of economic policy. Rather, innovation is the solitary big idea of cultural policy. Innovation needs to be understood and programs maintained to achieve it. Otherwise, we will be eating the exhaust fumes of China and India.
There has been a steady stream of innovations since 1800, including the steam engine, cotton gin, electric light bulb, Bessemer furnace, and the interstate highway system, for example. Each of these developments changed the culture and the economy, but none were mere "economic policy" implementations.
Government programs are important in maintaining an economic environment in which innovators find it worthwhile to innovate and capitalists find it worthwhile to support them. Quality education is imperative to the production of a population capable of innovating.
David D. Kilpatrick
Mandel says the incoming congressional Democrats had better get used to government not being able to influence the economy and that "nobody" can figure out why real wages for Americans have fallen or how to ensure strong job creation and strong wage growth.
I would argue that government policies have been effective, but their goal was not higher U.S. wages and employment. Instead they focused on higher profits and higher incomes for the few at the expense of the many.
Your article should have mentioned that spending on exports by our foreign trading partners is also a large share of the economy. The last time I checked, the U.S. was one of the top exporting countries on the planet. Mandel presents a hypothetical argument that foreign investors could pull out their money. But why would any seller intentionally cause financial harm to their best customer?
Hanover Park, Ill.
Boards can't communicatea compelling rationale for CEO salaries because few boards define their metrics ("CEO pay: The prestige, the peril," Up Front, Nov. 20). Innovative companies that want to be accountable for their CEO's salary should look at the company's reputation, market position, strength, customer and employee satisfaction, and other factors that are critically important to the future of the enterprise.
What if a board could say: "We paid our CEO this many millions of dollars because customer satisfaction went up, employee satisfaction and retention went up, reputation markers improved, and positions in our key competitive markets strengthened"? Now that's a compelling message.