MY grandfather started our mail-order company 100 years ago. In the early 1950s, customers were driving to Randolph, northeast of Madison, to see what they were purchasing by mail from us, and my dad saw an opportunity to start a local garden center.
One of my first jobs was to take the orders for shrubs from the garden center to a storage area and to take the shrubs to the customer. I was 11. I also hoed the weeds and detassled corn.
In the 1990s, the two branches of our family split the business. The Jungs received Jung Seed Genetics, which sells agronomic seeds to farmers, and the Zondags got the catalog division and the garden centers.
Category: Business
The Legacy of Billy Tauzin: The White House-PhRMA Deal
More than a million spectators gathered before the Capitol on a frosty January afternoon to witness the inauguration of Barack Obama, who promised in his campaign to change Washington’s mercenary culture of lobbyists, special interest influence and backroom deals. But within a few months of being sworn in, the President and his top aides were sitting down with leaders from the pharmaceutical industry to hash out a deal that they thought would make health care reform possible.
Over the following months, pharmaceutical industry lobbyists and executives met with top White House aides dozens of times to hammer out a deal that would secure industry support for the administration’s health care reform agenda in exchange for the White House abandoning key elements of the president’s promises to reform the pharmaceutical industry. They flooded Congress with campaign contributions, and hired dozens of former Capitol Hill insiders to push their case. How they did it—pieced together from news accounts, disclosure forms including lobbying reports and Federal Election Commission records, White House visitor logs and the schedule Sen. Max Baucus releases voluntarily—is a testament to how ingrained the grip of special interests remains in Washington.
Google to enlist NSA to help it ward off cyberattacks
The world’s largest Internet search company and the world’s most powerful electronic surveillance organization are teaming up in the name of cybersecurity.
Under an agreement that is still being finalized, the National Security Agency would help Google analyze a major corporate espionage attack that the firm said originated in China and targeted its computer networks, according to cybersecurity experts familiar with the matter. The objective is to better defend Google — and its users — from future attack.
Google and the NSA declined to comment on the partnership. But sources with knowledge of the arrangement, speaking on the condition of anonymity, said the alliance is being designed to allow the two organizations to share critical information without violating Google’s policies or laws that protect the privacy of Americans’ online communications. The sources said the deal does not mean the NSA will be viewing users’ searches or e-mail accounts or that Google will be sharing proprietary data.
The partnership strikes at the core of one of the most sensitive issues for the government and private industry in the evolving world of cybersecurity: how to balance privacy and national security interests. On Tuesday, Director of National Intelligence Dennis C. Blair called the Google attacks, which the company acknowledged in January, a “wake-up call.” Cyberspace cannot be protected, he said, without a “collaborative effort that incorporates both the U.S. private sector and our international partners.”
A fight over freedom at Apple’s core
In 1977, a 21-year-old Steve Jobs unveiled something the world had never seen before: a ready-to-program personal computer. After powering the machine up, proud Apple II owners were confronted with a cryptic blinking cursor, awaiting instructions.
The Apple II was a clean slate, a device built – boldly – with no specific tasks in mind. Yet, despite the cursor, you did not have to know how to write programs. Instead, with a few keystrokes you could run software acquired from anyone, anywhere. The Apple II was generative. After the launch, Apple had no clue what would happen next, which meant that what happened was not limited by Mr Jobs’ hunches. Within two years, Dan Bricklin and Bob Frankston had released VisiCalc, the first digital spreadsheet, which ran on the Apple II. Suddenly businesses around the world craved machines previously marketed only to hobbyists. Apple IIs flew off the shelves. The company had to conduct research to figure out why.
Thirty years later Apple gave us the iPhone. It was easy to use, elegant and cool – and had lots of applications right out of the box. But the company quietly dropped a fundamental feature, one signalled by the dropping of “Computer” from Apple Computer’s name: the iPhone could not be programmed by outsiders. “We define everything that is on the phone,” said Mr Jobs. “You don’t want your phone to be like a PC. The last thing you want is to have loaded three apps on your phone and then you go to make a call and it doesn’t work any more.”
The openness on which Apple had built its original empire had been completely reversed – but the spirit was still there among users. Hackers vied to “jailbreak” the iPhone, running new apps on it despite Apple’s desire to keep it closed. Apple threatened to disable any phone that had been jailbroken, but then appeared to relent: a year after the iPhone’s introduction, it launched the App Store. Now outsiders could write software for the iPhone, setting the stage for a new round of revolutionary VisiCalcs – not to mention tens of thousands of simple apps such as iPhone Harmonica or the short-lived I Am Rich, which for $999.99 displayed a picture of a gem, just to show that the iPhone owner could afford the software.
In the Next Industrial Revolution, Atoms Are the New Bits
The door of a dry-cleaner-size storefront in an industrial park in Wareham, Massachusetts, an hour south of Boston, might not look like a portal to the future of American manufacturing, but it is. This is the headquarters of Local Motors, the first open source car company to reach production. Step inside and the office reveals itself as a mind-blowing example of the power of micro-factories.
In June, Local Motors will officially release the Rally Fighter, a $50,000 off-road (but street-legal) racer. The design was crowdsourced, as was the selection of mostly off-the-shelf components, and the final assembly will be done by the customers themselves in local assembly centers as part of a “build experience.” Several more designs are in the pipeline, and the company says it can take a new vehicle from sketch to market in 18 months, about the time it takes Detroit to change the specs on some door trim. Each design is released under a share-friendly Creative Commons license, and customers are encouraged to enhance the designs and produce their own components that they can sell to their peers.
The Rally Fighter was prototyped in the workshop at the back of the Wareham office, but manufacturing muscle also came from Factory Five Racing, a kit-car company and Local Motors investor located just down the road. Of course, the kit-car business has been around for decades, standing as a proof of concept for how small manufacturing can work in the car industry. Kit cars combine hand-welded steel tube chassis and fiberglass bodies with stock engines and accessories. Amateurs assemble the cars at their homes, which exempts the vehicles from many regulatory restrictions (similar to home-built experimental aircraft). Factory Five has sold about 8,000 kits to date.
Banking after the kindness of strangers
”Whoever you are, I have always depended on the kindness of strangers”. The last line of Tennessee Williams’ A Streetcar Named Desire – uttered by its desperate heroine to the doctor taking her to a mental asylum – is an apt summary of the US financial sector in 2009.
As the crisis abated, banks took maximum advantage of the kindness of taxpayers and regulators to return to their core business: making money for shareholders and employees.
Ultra-low interest rates, dwindling competition and pent-up demand for their services sparked a renaissance in profits and share prices of the financial institutions that emerged from the turmoil in reasonable shape.
The question is whether history will repeat itself, or even just rhyme, this year. Here are my ten, utterly personal and non-exhaustive, predictions for the year ahead in US finance.
1) Strangers will be a lot less kind. With banks boasting about their new-found health, regulators will pull the plug on most of the measures they introduced to drag the financial industry back from the brink. A host of acronyms (Tarp, Talf, PPIP, TLGP) will be forgotten but not missed.
“Person of the Year” – Goldman Sachs’ Lloyd Blankfein: “Doing God’s Work”
Under other circumstances, this would have been a year to savour in the long, rapid ascent of Lloyd Blankfein. Goldman Sachs, the investment bank he has led for three years, not only navigated the 2008 global financial crisis better than others on Wall Street but is set to make record profits, and pay up to $23bn (€16bn, £14bn) in bonuses to its 31,700 staff.
For Mr Blankfein, a scholarship boy from the Bronx whose first financial job at Goldman was selling gold coins in its commodities trading arm, has prospered to an extent that was implausible even 10 years ago, when it became a public company. Its influence has spread throughout the world, from New York and London to Shanghai and São Paulo.
A good slice of its success is attributable to Mr Blankfein, a tough, bright, funny (everyone remarks upon his unpretentious, wisecracking manner) financier who reoriented Goldman. Under his leadership, trading and risk-taking have pushed to the fore, reducing the influence of its investment banking advisers.
In 2009, however, Wall Street faced a wave of public anger at how banks that survived only with the assistance of taxpayers seemed unchanged and unrepentant. Goldman’s profitability, and suspicions that its deep links with governments around the world give it unfair advantages, made it a symbol of Wall Street greed and excess. It was described by the Rolling Stone writer Matt Taibbi as “a great vampire squid wrapped around the face of humanity”.
Global Supply Chain for Boeing’s New 787: The DreamLifter in Action
With the recent first flight of Boeing’s new 787, I thought it timely to post a photo from it’s supply chain: a converted 747 freighter known as the “Dreamlifter” that flies parts from around the globe to Everett, Washington for final assembly.
Goldman’s Collateral Damage
Cast your mind back to that SigTarp report, published last month.
Readers will recall there’s been a persistent stink over whether the efforts of the Federal Reserve and the US Treasury to prop up AIG had the effect of bailing out Goldman Sachs — its largest trading partner. Goldman Sachs always denied that idea, saying its exposure to AIG was collateralised and hedged against the mega-insurers’ fall. Others, were not so sure.
Last week the Wall Street Journal continued that particular line of thought with an article titled “Goldman fueled AIG gambles“, which examined GS’s role in acting as a middleman between the insurer and other banks. In short, Goldman offered banks protection on some of their investments (for instance on CDOs of home loans), which it in turn hedged with AIG in the form of CDS.
Will Big Business Save the Earth?
THERE is a widespread view, particularly among environmentalists and liberals, that big businesses are environmentally destructive, greedy, evil and driven by short-term profits. I know — because I used to share that view.
But today I have more nuanced feelings. Over the years I’ve joined the boards of two environmental groups, the World Wildlife Fund and Conservation International, serving alongside many business executives.
As part of my board work, I have been asked to assess the environments in oil fields, and have had frank discussions with oil company employees at all levels. I’ve also worked with executives of mining, retail, logging and financial services companies. I’ve discovered that while some businesses are indeed as destructive as many suspect, others are among the world’s strongest positive forces for environmental sustainability.
The embrace of environmental concerns by chief executives has accelerated recently for several reasons. Lower consumption of environmental resources saves money in the short run. Maintaining sustainable resource levels and not polluting saves money in the long run. And a clean image — one attained by, say, avoiding oil spills and other environmental disasters — reduces criticism from employees, consumers and government.
Much more on Jared Diamond here.