News Topic - Alan Greenspan

Post's Weymouth: The Last Media Tycoon
News from Portfolio.comAlso on PortfolioGame On: The VC Who Focuses Solely on GamesIn Praise of the Career WomanAriana Huffington Plagiarizes HerselfSubscribe to Portfolio magazineEditor's Note: Condé Nast Portfolio spoke with Katharine Weymouth prior to July 7, when the Washington Post named former Wall Street Journal managing editor Marcus Brauchli as its new executive editor. Nobody knows better than Katharine Weymouth that the newspaper industry is experiencing what may be called, euphemistically, a period of transition. But the new publisher of the Washington Post isn't big on euphemisms."The numbers suck in our business," the 42-year-old granddaughter of legendary Post publisher Katharine Graham declares, holding her tall, lithe frame dancer-straight, the result of a childhood spent in ballet classes. It's a lovely day in early April, and Weymouth is at the Post's downtown D.C. headquarters, meeting with the staff of Style, one of the paper's more popular sections. The session is a stop on the listening tour of the newsroom that she's been conducting since February, when she was named publisher and chief executive of Washington Post Media, a newly configured unit that encompasses the newspaper's long-divided print and web operations. (View a slideshow featuring some of the newspaper's major players.)This should be a very good day at the Post. The day before, the paper won six Pulitzer Prizes, a record for the Post and the second-biggest haul ever for any newspaper in a single year. To celebrate, Weymouth threw open the doors of her decidedly unflashy home for an impromptu shindig, greeting coworkers in her bare feet and chatting with young staffers into the night. But the afterglow is already waning, and now it's back to the dismal reality of newspapers everywhere. "We are going to have to get smaller and better and still find a way to put out the best product we can," Weymouth tells the assembled reporters and editors at the headquarters of the Post. "That may mean that we have to make some choices about what we can cover and what we can't—and those are going to be hard choices." (View a pop-up graphic showing how the Post's ad revenue and circulation stack up to the competition.)Weymouth, a divorced mother of three young children, is the lone member of her generation of Grahams to work at the family-controlled, publicly traded company that her great-grandfather, Allied Chemical tycoon Eugene Meyer, bought at a bankruptcy auction in 1933. Her new role makes her the almost inevitable successor to her uncle, Washington Post Co. chairman and chief executive Don Graham, and the two can often be seen circling the Post building together, walking and talking. Don, a physically fit 63-year-old, isn’t planning to go anywhere anytime soon, and in the meantime, Weymouth must prove herself by running the unit that defines the Washington Post's celebrated brand but that may also have the bleakest future. The Post Co.’s performance tells the story of a fading industry: Over the past 24 years, its cable unit has prospered but the newspaper, broadcast and magazine divisions, including Newsweek, have become dwarfed by its Kaplan unit, which offers education, test-preparation and career-training services and whose cash flow today accounts for nearly half of the company's $4.1 billion annual revenue. The tail has become the dog, and the Washington Post Co.—forever identified with fearless reporting on the Watergate scandal and the Pentagon Papers—now defines itself as a "diversified education and media company, with education as the largest and fastest growing business."Weymouth "is very talented, very smart, and she has a huge challenge, which is to be in the newspaper business at this particular time," says longtime family friend Barry Diller, chief executive of IAC/InterActiveCorp and a director of the Post Co., whose share price recently slid below $600 from a 52-week high of $885.At a lunch with Post editors and reporters, Microsoft chief executive Steve Ballmer confidently predicted that in 10 years "there will be no newspapers, no magazines that are delivered in paper form" and "no media consumption" except via the internet. Weymouth’s maybe impossible mission: to change that future—or at least figure out how the Post can survive in it.It was probably not an omen, but shortly before she was named publisher, Weymouth was mugged at gunpoint on a Washington street. It was midnight, and she and a female friend were leaving a dinner party at the home of a Post colleague. "I always feel like I'm a tough chick and nobody is going to mess with me," Weymouth says. "We were paying no attention to our surroundings, which we should have been. This guy comes around the corner and says, 'Your purses.' Then he pulled out a gun, and we realized he wasn’t joking." Emerging from the ordeal stripped of cash, credit cards and Weymouth's Washington Wizards basketball tickets—but otherwise unscathed—they retreated to a lounge, where Tim the friendly bartender served them margaritas on the house to steady their jangled nerves. Jangled nerves, of course, are the least of the challenges Weymouth faces. The Grahams today are almost the last of the great American newspaper families. They have managed to nurture and retain possession of a thriving journalistic institution while other media dynasties—the Chandlers of the Los Angeles Times, the Bancrofts of the Wall Street Journal, and the Binghams of the Louisville Times and Courier-Journal, to name a few—have loosened their grip, taken the cash from big corporate buyers, and faded into a gilded oblivion. Even the Sulzbergers of The New York Times are fighting to stay in power amid rising shareholder discontent over the company’s sinking stock price. "It's so amazing to see this family continue in control," says Post Co. vice president at large Ben Bradlee, who served as the Post's executive editor for 23 years and, with Katharine Graham, transformed the paper from a merely respectable publication into a world-class one. He adds that Weymouth's ascension guarantees that there will be a member of the family there for another 30 years. "When I heard she was coming in, it made me feel optimistic and good," Bradlee says. "And then when I saw her and the way she handles herself around here, with total ease and yet no sense of entitlement, I was really impressed."t was Weymouth's grandfather, Philip Graham—Katharine Graham's husband and Meyer's son-in-law—who first put the Washington Post Co. on the map as an emerging media power. After World War II, he bought a majority stake in the local 50,000-watt CBS radio station, then the CBS television affiliate, and then a TV station in Jacksonville, Florida. Philip bought the rival Washington Times-Herald and merged it with the Post, launched a wire service with the Los Angeles Times, and acquired Newsweek magazine. But all the while, he battled a severe form of manic depression, and in August 1963 he committed suicide, shooting himself at the family farm in Virginia. Katharine Graham found his body.The rest of the story is legendary in journalistic circles: Rejecting handsome offers from various media conglomerates to buy the company, Katharine took over as president. Shy and awkward, she felt inadequate to the task and, as she later admitted, terrified, but she was determined to keep the Post in the family. She'd spent her adult life as a wife and mother, driving a car pool for her four children, and knew little of business and nothing about management. But she steeped herself in expert advice and, with the help of a small group of executives who'd been hired by her husband, she presided over the newspaper and its related enterprises with increasing self-assurance and authority. An outwardly correct and reticent lady (who displayed a wicked sense of humor and cursed eloquently in private), she formed a seamless partnership with Bradlee, whom she hired in 1965 as managing editor after he famously told her he'd give his "left one" to edit the Post. Together, they faced down Richard Nixon's White House in publishing the Pentagon Papers in 1971, when government intervention could have jeopardized the Post Co.'s plans to go public. They pursued the Watergate investigation at a time when vindictive Nixon operatives were actively considering pulling the company's broadcasting licenses.Mrs. Graham, as she is still called by nearly everyone at the Post, died in July 2001 at age 84, after falling and sustaining head injuries while attending the Allen & Co. media-mogul retreat in Sun Valley, Idaho. But her descendants still seem to enjoy an almost mystical bond with their employees. When Weymouth made a heartfelt acceptance speech in the company auditorium on the day her promotion was announced, some Post traditionalists, such as former managing editor Bob Kaiser, were teary-eyed.Wearing her grandmother’s pearls for luck, Weymouth told the crowd about a recent conversation she'd had with a coworker in the advertising department, where she'd spent the previous three years as vice president and director. The colleague "poked her head in my office," Weymouth explained, "and said that there was a story that she thought I would want to hear. She asked me if I had ever noticed that often the elevators stop on the lobby floor when you have not pressed the button for the lobby. And the doors open, and no one gets on or off. I said yes, I had noticed that. She said, 'Well, my girls think that is your grandmother getting on the elevator.' I got chills when she told me that. And this morning, it happened to me. I was riding up from the garage level, a nervous wreck. And the elevator stopped on the lobby floor, the doors opened, and no one got on."The numbers do suck: The Post's circulation and advertising are down and dropping, the cost of newsprint is through the roof, and advertising revenue from the web isn't growing nearly fast enough to stanch the bleeding. In 2007, the Post's print-ad revenue plunged 13 percent from the previous year—from $573.2 million to $496.2 million (a decline hardly offset by an $11.5 million hike in the website's revenue, an 11 percent increase over the previous year). Average daily circulation has dropped to 673,180 from a peak of 832,232 in 1993. The staff was cut earlier this year through a round of voluntary buyouts, the third since 2003, a move that cost the company a record $80 million in severance payouts. Over the past five years, the newsroom's head count has shriveled from about 900 to less than 700, and the threat of layoffs still looms. It’s a sad, scary time. At a recent farewell party for the latest group of buyout recipients, several of them Pulitzer Prize winners, Don Graham was choked up."Our single-copy sales are declining by about 10 percent a year, and home delivery is almost flat," Weymouth tells the Style staff at the April meeting. Responding to a writer who complains that the Post's front page is often boring to readers who aren't obsessed with politics and government, she says, "I think the evidence will tell us you're right. There are days when I look at the front page and think we've done a better job, and there are days that I think, You must be kidding me!" The staffers laugh. Weymouth goes on, "There are days on Saturday that I think maybe somebody is trying to not have people buy the paper."Those are striking words for a newspaper publisher, whose traditional responsibilities don't usually include second-guessing the editors on their Page One selections. In the meeting, Weymouth insists she’s not going to bigfoot editors on news judgments. "It wouldn't be appropriate," she says. But in her short time on the job, she's made it clear that she'll involve herself in all aspects of the operations that define the brand, an approach that's symbolized by her decision to move the publisher's office to the fifth-floor newsroom to make herself "accessible"—a highly unorthodox step strongly discouraged by her immediate predecessor, Post Co. vice chairman Boisfeuillet Jones Jr., one of Don Graham's oldest friends from Harvard."Bo hates my idea of moving, hates it, and has tried repeatedly to talk me out of it," Weymouth tells the Style staff. "But I don't like to be stuffed away in a cubby. I don't know how many of you have been to the official publisher's office on the seventh floor. It's like a dreadful funeral coffin." Don Graham, who spent much of his early career as a reporter and editor, endorses the move. "Katharine came up on the business side, but she loves the newsroom and the people in it, and by being in the middle of it she'll learn a lot, and they'll learn a lot about her," he says. One thing they've already learned: She has opinions about almost everything. "Do you remember the rural-dentist photo, a month ago or whatever?" she asks the Style staff. "There was that elderly woman with, like, no teeth, dying in bed, and he was treating her? That was a good story, and I'm sorry to be so horrible—I'm hoping it was no one in the room who picked the photo—but there were better photos!"I went on the website and—not to do a Sam Zell thing—they have the same dentist with a beautiful old-fashioned truck and, no kidding, a dalmatian on the hood." Zell, the foulmouthed billionaire who recently bought the Tribune Co., appeared in a notorious YouTube video in which he accused a photographer at the Tribune-owned Orlando Sentinel of "classic journalistic arrogance." After the photographer argued that if ordinary readers had their way, the paper would carry stories about puppy dogs at the expense of stories about Iraq, Zell responded with a bracing "Fuck you!" "Sam Zell may be a loon with Tourette's syndrome," Weymouth jokes, "but he's not crazy. To some degree, it is puppies and Iraq."Though Weymouth has no journalism experience, the newsroom chatter about her has been positive so far, in part because she seems down-to-earth and decisive at a time when morale is low and apprehensiveness is high. She has moved with surprising speed to exercise the publisher's prerogative to name her own executive editor. Leonard Downie Jr., who has held that job since 1991, announced his post-Labor Day retirement plans on June 23. Countering stories suggesting the timing of his departure was Weymouth's idea, not his, he says, "I’m 66 years old, I have a novel being published in January, I have a lot of things I want to do with my life." While denying publicly that she was in any hurry to replace Downie, Weymouth nevertheless did little to hide her head-hunting activities. She sounded out nearly a dozen prospects both inside and outside the paper, including current Post managing editor Phil Bennett, New Yorker editor and former Post staff writer David Remnick (who said he wasn’t interested in the job), and two leading outside contenders, New York Times deputy managing editor Jonathan Landman and former Wall Street Journal managing editor Marcus Brauchli, who was ousted from that job by the paper's new owner, Rupert Murdoch, this spring. No other decision Weymouth makes will be riskier or more important, or will reflect more seriously on her leadership. The consequences of a mistake will be dire. As this magazine went to press in late June, Weymouth appeared poised to break with Post tradition and name an outsider. Brauchli was the leading contender. "In my mind, it's three different qualities," she told me, about what she was looking for in her own Ben Bradlee. "One is obviously intellectual caliber—the ability to run our newsroom and identify good stories. Two is charisma and leadership…. and the third is the ability to think strategically about the newsroom of the 21st century. There has to be someone who looks around and says, 'OK, what are we trying to accomplish?' Now we have the web, we have mobile, we have the Kindle and whatever other devices are going to come up, so what is the best way for us to exist in order to do the best journalism we can do?"Meanwhile, Weymouth has also been focusing on the kind of less exalted newsroom-personnel issues that publishers have traditionally avoided. It didn't take her long, in a series of informal one-on-ones with reporters and editors, to pick up on morale problems among the national news staff. Two and a half months after Weymouth became publisher, the section's assistant managing editor, Susan Glasser, was removed from that position and given another one outside the newsroom, working for Don Graham on special projects. Glasser's tense relationship with many of her reporters was already under scrutiny from her bosses. (Glasser had no comment.) Yet there's little question that Weymouth weighed in with her concerns, which likely accelerated Glasser's reassignment and prompted embarrassing coverage from rival news outlets, notably a detailed story about the episode in the New York Times. "It’s shocking to me," Weymouth says about the press coverage, dismissing it as gossip but declining to comment on her role. "As publisher, I'm going to take a lot of heat for almost anything I do. Some people are going to like it and some people are going to be horrified by it."Weymouth joined the Post in the fall of 1996 as an in-house counsel, from the blue-chip Washington law firm Williams & Connolly. (I met her soon after she arrived at the paper—I was a reporter there from 1980 to 2003—when she was assigned to vet one of my stories. She advised me to delete some potentially libelous material. We haggled; she won.) After graduating from Harvard College and Stanford Law School—with a brief interlude at Oxford's Wadham College, reading English literature and rowing on the Thames—she had clerked for a couple of judges in San Francisco, where she planned to make her home. But she couldn’t find suitable employment."I wanted to stay in California, but I graduated during a recession and couldn't get a job in California," she tells me over coffee at the Madison Hotel, across the street from the Post building. She’s dressed casually, in corduroy trousers, a Gap shirt, and a jacket from a New York street vendor; in a few hours, she's taking a crew of editors to a Washington Nationals baseball game.Moving to the Post after three years as an associate at Williams & Connolly, Weymouth spent the subsequent 11 years in a variety of positions on the paper's business side—associate counsel to Washington Post Newsweek Interactive, which included the paper's website, Washingtonpost.com; liaison between the often fractious advertising teams of the website and the newspaper; director of help-wanted advertising; and finally vice president of the entire advertising department, where she directed a sales force of 450. All were part of the grooming process. During that time, she presided over declining ad revenue, but Don Graham was still impressed with her performance: "I have long and deep relationships in that department, and I knew how well people were reacting to her, and I knew how many ideas she had. I knew from several jobs ago how really smart she is about picking people." Katharine Graham was pleased when Weymouth finally joined the family business. "She was optimistic but uttered some cautionary words to the effect that Katharine would have to prove herself on the job, which would be true of any Graham at the Post,” says Mrs. Graham's youngest son, Stephen, another of Weymouth’s uncles. Granddaughter and grandmother were very close; when I ran into them occasionally at Washington parties, they were clearly enjoying each other's company. "I would often end up with nothing planned on Friday night, and we would have dinner in front of the TV and watch Jim Lehrer," Weymouth says. "I would tell her about my dating life, and she would be amused." In July 1998, she married attorney Richard Scully; her wedding gown was designed by family friend Oscar de la Renta, and among the guests were Warren Buffett, Charles Schumer, Alan Greenspan and Andrea Mitchell. Weymouth changed her surname to Scully but changed it back again when she and Scully divorced six years later. Weymouth is herself a child of divorce. Her mother, Newsweek senior editor Lally Weymouth, who is Don's older sister, and father, Yann Weymouth, a prominent architect, separated when Katharine was 5. She grew up with her younger sister, Pamela (now a writer and teacher in California), on Manhattan's Upper East Side, attending the posh Brearley School for girls while studying at George Balanchine's famed School of American Ballet. "Ballet taught me discipline," Weymouth says. "If I wanted to dance three hours a night, I had to make sure to deal with everything else, getting my homework done. I had a little schedule written out, and I didn’t like people to mess with it."Yann Weymouth, older brother of former Talking Heads bassist Tina Weymouth, recalls a little girl who "would worry about whether she had completed all her tasks, whether she had done all she needed to do in school, worried about doing her homework and doing it right." The formidable Lally, known for her incisive interviews with world leaders, declined to be interviewed herself. "I can’t think of anything I'd like to do less," she quipped, half in jest but wholly in earnest.Weymouth learned early how to mix with grownups, many of whom were among the most distinguished in their respective fields. It was during one of her mother's parties, when Weymouth was 11, that Norman Mailer emptied the contents of his scotch glass in Gore Vidal's face, head-butted him, and socked him in the mouth, thus launching one of the more entertaining literary feuds of the latter half of the 20th century. Vidal memorialized the occasion as "The Night of the Tiny Fist."But with her own friends, Weymouth tried to keep her high-powered connections on the down-low. Molly Elkin, a Washington lawyer and daughter of novelist Stanley Elkin, knew nothing about Weymouth's illustrious family when the two bonded while they were both at Oxford. She and Weymouth decided to travel to Israel together during a school vacation, and Weymouth offered to make all the arrangements, instructing her friend to bring a decent dress just in case they ended up at a fancy dinner. Flying out of Paris, they submitted to a routine interrogation by security-conscious officials of El Al airline. "They asked us, 'Do you know anyone in Israel?'" Elkin recalls. "And I said, 'Yes, my friend Ricky Gold, who I've known since I was 3.' And then Katharine pulls out a five-page typed itinerary that I didn't even know she had with her. And it says, 'Dinner with Leah and Yitzhak Rabin,' who was then the defense minister. 'Lunch in the Knesset with Bibi Netanyahu,' 'Visit to the Jerusalem Post to meet with editor Ari Rath'—things like that. And my reaction was to look at Katharine and say, 'Who are you?'"Once the appointment of a new executive editor is behind her, one of Weymouth's highest priorities will be integrating the operations and staff of the newspaper and its website. The move is far more than bureaucratic; it threatens long-standing traditions and fiefdoms at the paper. The Post has long seen its internet enterprise as independent from the downtown newsroom and placed it across the Potomac River in suburban Virginia. The newsroom reported to Downie, and the website reported to Washingtonpost.com C.E.O. Caroline Little (who recently left the company). The corporate and geographical separation resulted in two very different and clashing cultures. Now the two entities for the first time report to the same person—Weymouth—a structure that, she says, reflects the "growing size and importance" of the website. "The idea, and the reason we named the new entity Washington Post Media, was so that we could really begin to think about ourselves as a media company—and not as a newspaper company and a web company," Weymouth says. To date, revenue from the print operation still far exceeds that of the internet, but this could change. "My goal is to make sure that the Washington Post is reporting and writing great stories and distributing them to our readers on whatever platform they want to get it on. If we can do that, then it won't matter whether revenues at the website are bigger than those at the newspaper, or vice versa. If we do this right, we will be a news company."In short, Weymouth is the woman in charge of reinventing one of the world's best newspapers in the age of the internet, and her success or failure at that task will be a leading indicator of the industry as a whole. "It’s going to be cutting costs and developing new products and trying new things—throwing a little more spaghetti against the wall," she tells the Style staff. "Some of them will work and some of them won't. I don't think there’s a magic bullet that is going to turn our industry around."Think about the record companies," she continues. "They’ve all been in this position, and some have survived it and some have not. Apple completely reinvented themselves. I.B.M. did not. TiVo did not. Microsoft constantly reinvents itself. Google has sort of a one-hit, brilliant wonder and is now trying to look for lots of other revenue streams but really hasn't, in my mind, succeeded. So I wish I could come up with what the iPod is for us."Whatever Weymouth does, Liz Spayd, a Washingtonpost.com editor who is also a veteran of the downtown newsroom, predicts that the new publisher will move forcefully and fast."Hold on to your hats, cowboys," Spayd says. "We’re going for a ride."
Wired News  –  Jul 16, 2008 3:30 PM [GMT]  ¦  comment?
found in Business

The World According to Carly Fiorina
News from Portfolio.comAlso on PortfolioMemo to Jerry Yang: Call Ballmer and Take the $33-a-ShareBlow the Whistle, Fade Into ObscurityThe Chemistry in ChemicalsSubscribe to Portfolio magazineAs chief executive of Hewlett-Packard from 1999 to 2005, Carly Fiorina was the most powerful woman in corporate America. She also became one of the most celebrated and criticized when she was fired from that job in February 2005 in a battle with Hewlett's board—and with tech venture capitalist Tom Perkins in particular—after a controversial merger with Compaq Computer. (She recounted that corporate melodrama in her bestselling memoir Tough Choices.)Now, at a mere 53, Fiorina is polishing her distinguished résumé with a heavy dose of political activism. She is a top presidential campaign surrogate for presumptive Republican nominee John McCain and chairman of Victory '08, the Republican National Committee's fundraising and get-out-the-vote arm. She is, of course, frequently mentioned in the media as a possible McCain running mate, but in an interview with Portfolio.com, she sounded more like an aspiring Treasury secretary.Lloyd Grove: Every so often you might be unable to resist putting on your McCain surrogate hat, but I was hoping to talk to you just as a businesswoman and as Carly Fiorina, independent thinker. Carly Fiorina: Well, for better or for worse, I usually am. L.G.: OK, good. So let me ask: Who and/or what is to blame for the souring economy, the bear market and $140-plus oil—the folks in charge?C.F.: Well, I don't think any president is responsible for any one of those things, and that's not a partisan comment -- just like I don't think we can blame Bill Clinton for the tech boom and bust. So I don't think you can blame George Bush for the credit boom and bust. But I think what we're seeing right now is very similar to what we saw in the tech boom and bust. We saw a whole set of financial instruments and financial institutions rush into the real estate market with a new and innovative set of credit instruments, and those credit instruments drove a huge upswing in growth in that part of the market. But they were also poorly understood, they weren't particularly transparent, people began to forget about risk, and the boom cycle inevitably became a bust. But the consequence of that bust has created a tightening of credit across the board. A tightening of consumer credit, a tightening of credit to small businesses, a tightening of credit generally, because these financial institutions—not to get too complicated here, but because they're bound by mark to market accounting—they are in essence writing down their assets as the market falls, causing them to be more cautious. They mark more assets down, I mean we're in kind of a self-perpetuating cycle here. And I don't think that has anything to do with which political party is in office, and I don't think it has anything to do with who is the president of the United States.L.G.: So you think this was just led essentially by greed on Wall Street? C.F.: Well, I think there was a situation where there was greed on Wall Street, there was a lack of transparency around a new set of financial instruments, there were a whole new set of financial instruments, there were a whole new set of financial players who were less regulated than banks, and all that together created a situation, which now is rippling through the economy. L.G.: Who would you blame? I know a number of people have blamed Alan Greenspan for not doing something about this when he had the chance. As you know, he's been on a very active rehabilitation tour. C.F.: I think it's a little bit of Monday-morning quarterbacking. L.G.: What's wrong with that? C.F.: I think it's hard to second-guess all of the decisions that are getting made when you don't have all of the same information, or are not in the same context. But there's no question that a period of easy money made certain risks look more attractive, and less risky than perhaps they should've. But, again, you go back to the tech boom and bust, part of that was how much was invested in telecommunications build-outs, and you had the same kind of thing—a lot of money chasing the opportunity to make more money, and people forgot basic elements of risk. I don't know how well you covered that or whether you remember much about it.L.G.: [Laughs] I remember putting money into AOL. C.F.: Exactly. So much the same kind of cycle unfortunately, but all of these cycles are worse and worse because our economies are more interconnected. And in this particular case, the financial instruments that were being used, when I say they lacked transparency, people didn't understand all the connections. Now, by the way, let me quickly say, there is a role for government in getting out of this—and so what a President McCain would do, what a President Obama would do, what Congress has done so far on a bipartisan basis, I'm not suggesting that there is nothing that can be done or should be done. But the cause of it fundamentally is not political, I don't believe.L.G.: Gotcha. Now, in February 2003, before we went into Iraq, people were worried that the price of oil was skyrocketing to $35 a barrel. C.F.: I know. That's incredible, isn't it? L.G.: So tell me what your analysis of that is. C.F.: I think there are a couple of things. First, I think clearly the demand for oil is skyrocketing, driven in large measure, but not completely, by the burgeoning economies in China and particularly in India. And there seems to be no abatement to that demand. Still, that rise in demand may explain why oil has risen from $35 a barrel, but it doesn't explain why the price of a gallon of oil has doubled in the past 12 months. For that, I think we have to look to a weak dollar, and people moving investment into commodities like oil; to some degree of speculation in that move. And I think we need to look on the margins to global unrest and concern. I don't think it's the Iraq war, however.L.G.: You don't? C.F.: No, I don't, because I think there was basically very little supply coming out of Iraq in 2003. I don't think in 2003 that people were counting on a big supply of oil coming out of Iraq. Perhaps they were in 2004, but I don't really think so. L.G.: How much would you attribute the weakness of the dollar to the government fiscal policies that we've been subjected to? C.F.: See, I happen to have a slightly different point of view than some do. I think a strong dollar is the result of policies, but I don't think the strong dollar is in and of itself a policy. So what do I mean by that? I think a strong dollar results from a belief that the U.S. dollar is a good investment. Where does that belief come from? I think bolstering free trade is a boon to the dollar. I think interest rates relative to other interest rates are a boon to the dollar. So a period of long easing or rapid easing is not helpful to a strong dollar actually, although it may be helpful to economic growth in the short term. And, most importantly of all, I think our pro-growth policies, if people believe that the U.S. economy is creating jobs and growing, then the dollar is likely to be stronger. If they don't believe that, it's likely we could be weaker. And, of course, as you know, a weak dollar is not all bad -- export growth in our economy is one of the real highlights.L.G.: Sure. Let me ask you sort of a dumb question, maybe. C.F.: I doubt it. L.G.: Well, you mentioned whether Clinton can be blamed for the tech boom and bust, but obviously under Clinton and the Republicans who controlled Congress, there were budget surpluses, and the economy was pretty strong through the latter part of his term. Republicans are supposed to be the party of fiscal responsibility, and your candidate has railed against this, but why do you think that is? That under the Democrats, the fiscal policy seems to be more responsible, and under Republicans, particularly these last seven and a half years, it has been sort of crazy.C.F.: I think you've said a lot there. L.G.: More than I should have. C.F.: No, no. Fiscal policy is not just, or even not even principally, the purview of the president. There is Congress involved, and you're absolutely right that a Democratic president, Bill Clinton, and every Republican in Congress came to a set of agreements to balance the budget. That agreement was noteworthy, but it took both parties to play. You're also correct that it is a Republican Congress, and a Republican president, George Bush, who saw the greatest increase in government spending since the Great Society. L.G.: Why is that? C.F.: Because they made the wrong choices. L.G.: I don't know how long you've identified yourself as a Republican. C.F.: Well, I've been a Republican for all of my voting life. L.G.: When you joined up, did you think this was going to be a party of conservative stewards of the budget?C.F.: Yes, and I think it's one of the reasons why Republicans are losing congressional seats, because people are angry over the fact that government spending is out of control. I think it's one of the reasons that Bush's popularity is low. Clearly the war is driving as much if not more of that, but yes, I think there are people who are surprised and disappointed that a Republican president and a Republican Congress have in fact driven a huge spending increase. I'm talking about a domestic spending increase. Now, I will quickly say that those domestic spending increases have gotten very broad bipartisan support. So if you look at the farm bill, for example, I mean it's a tribute to pork. And everyone, including Obama but excluding McCain, signed onto the farm bill. McCain voted against it. He has voted against every one, he doesn't believe in farm subsidies -- particularly to millionaire farmers.L.G.: What are they growing in Arizona these days? C.F.: Oh, I have no idea. L.G.: I assume that the agricultural output of Illinois is higher than it is in Arizona. [The Illinois agriculture industry is more than twice the size of Arizona's, according to government statistics.] C.F.: Yeah, but look, now I'm going to say what I really believe, but you may interpret it as a surrogate remark. It's the reason why I became a surrogate. John McCain actually does do what he thinks is right, even when it's to his political peril. I can remember being asked to go into Iowa in December, just before the caucuses, and just after he'd announced his opposition to ethanol subsidies. He knew what that would do to him. But he doesn't believe in them. And he has a track record to back it. So I think that his strident conviction that pork-barrel spending is wrong is backed up by a 20-year record. He's never asked for an earmark in 20 years—not once. There is no other member of Congress, Democratic or Republican, who has that record. Only John McCain has that record. Nobody else has come close. L.G.: Why do you think Obama is out-raising McCain, not only on Wall Street but in Silicon Valley? C.F.: Well, it's interesting. The last set of numbers that came out, he isn't out-raising McCain anymore. So for a long time, absolutely right, he was out-raising him in places like New York and Silicon Valley, and he may still be in those two particular locales. So I'm not trying to avoid your question, I'll come back to it. But on the other hand, if you look at the numbers that just got published for Obama and McCain for this past month, they're dead even. L.G.: Because I was just looking over a piece in the Daily News suggesting that, for instance, on Wall Street, McCain raised something like $5 million within a certain period and Obama raised over $8 million in the same period. C.F.: Yeah, from the trend looking backward you are correct. As a business person, I tend to look forward. And if you look at the trends over the last, call it three months, what you see is McCain's money trending upward, Obama's take trending downward, and in the month of June, they crossed. L.G.: If we're talking about fundraising, it looks like the R.N.C. [Republican National Committee] is doing pretty well. In contrast to the D.N.C., particularly. C.F: That's right, the R.N.C. is doing very well. The R.N.C. is out-raising the D.N.C. eight to one. All that money matters, it counts. Now that Barack Obama has made a decision to forgo public financing, he has to raise more money in each of the subsequent four months than he's ever raised before. L.G.: Don't you think, as someone who is used to looking forward and looking at numbers and dealing with money, that Obama's decision was entirely rational and understandable? C.F.: Well, if I set aside the fact that he absolutely changed his position. I find it -- "disingenuous" is a kind word. L.G.: Take off that surrogate hat, now. C.F.: No, no, this is not a surrogate hat. I would've found it much more acceptable had Barack Obama come forward and said, "You know what? I'm going to change my mind and I'm going to change my mind because it's to my advantage to change my mind. I've raised a lot of money, and I want to spend a lot of money." But what he did instead was say, the reason why I'm changing my mind is ..." L.G.: Because "the system is broken." C.F.: Correct. I mean, please, that to me was disingenuous. I know why he changed his mind. He changed his mind because he's raised so much money and he wants to spend a lot of money. My only point is, having made that decision, he has to raise much more money in the next four months than in any of the previous months. It's a tall order. I think there's clearly been a downside to his credibility in terms of how he explained it. I guess I would just say, they must have incredible confidence in their ability to raise money, and from what I've seen over last couple months, I don't know where that confidence comes from. L.G.: Let's switch gears here. Do you still root for Hewlett-Packard? C.F.: Of course. I still own their products.L.G.: Did you enjoy the ride back up on the stock? C.F.: Oh, well I knew the ride was coming. L.G.: So you held on, obviously didn't get rid of your stock at whatever it was, $12, when you were fired. C.F.: No, absolutely not, and it wasn't $12 then. It was twice that. (These days Hewlett is trading at around $43.) You know, I knew what was coming at Hewlett-Packard. My choices and my leadership had been completely validated by what happened from the moment I left. And by the way, the best legacy of a leader is what happens after they go. That's how you know the kind of foundation they put in place. So I still root for them. I'm very proud of them. I have a lot of friends there, and I'm extraordinarily pleased.L.G.: Why is it that a nice person like you is still ... C.F.: Oh God, I've been through that so many times. Read my book. L.G.: You saw this New York Times piece recently where Jeffrey Sonnenfeld at the Yale School of Management called you a "street bully." C.F.: Yeah, well, Jeffrey Sonnenfeld is someone I've never met. I've never talked with him. That's been his point of view for eight years, and he's never changed. I have no idea why he thinks that. I can just tell you that would've been his quote in 1999, 2000, 2001, 2004, and now, 2008. So I'm not terribly concerned what Jeffrey Sonnenfeld thinks because I don't think he's influenced by the facts here, and I don't know what his ax is to grind.L.G.: You're a high-tech person, and I just went on Facebook to see if I could find you and somebody named Carly Fiorina seems to have joined, like, four days ago. Was that you? C.F.: Nope, not me. It was not someone on my behalf that I'm aware of. L.G.: OK, so you're not a member of Facebook. C.F.: No.L.G.: You're on the Fox Business Network still? C.F.: No. I suspended that agreement. It was a conflict to do this. L.G.: Do you have any thoughts of why Fox Business hasn't gotten a bit more traction than it has? C.F.: I think when you're doing something like that, you have to take the long view. I think that Rupert Murdoch clearly is taking the long view. He is building a business franchise with that channel, with the Wall Street Journal. I have no doubt that it will be very successful, but I think you can't expect a brand-new channel to get it all done in less than 12 months, which is about what we're talking about. L.G.: It's so high-profile, there's no shortage of people that would want to throw brickbats at them. C.F.: There are a lot of people who want it to fail. L.G.: [Laughs] By the way, do you feel any kinship at all with any of these high-profile women on Wall Street who have been very publicly defenestrated, like Zoe Cruz at Morgan Stanley and Erin Callan at Lehman Brothers and Sallie Krawcheck at Citigroup?C.F.: Well, look, men and women get fired. I think everyone in business or in politics, man or woman, understands that at the top, it's a rough game. But I think it's also undeniably true that women in positions of authority are characterized differently, scrutinized differently, talked about differently, than are men. So I have no information to make a judgment about how or why they were fired. I would only observe that women are always talked about differently. I have great empathy for Hillary Clinton. L.G.: Indeed, I noticed that some of the ways your situation at H.P. was characterized treated your conflict with (then Hewlett-Packard director and later chairwoman) Patricia Dunn as something out of that Clint Eastwood women's boxing movie. Is that a fact of life now in corporate America and in the media? Do you think we'll ever get beyond that? C.F.: Well, I don't think that's a fact of life in corporate America. I think women at the top of any field are still relatively rare. I mean, if you just look at the data in corporate America today, 16 percent of the senior officers and board members are women. That number hasn't budged in five years. So it's still quite rare, and it's clearly quite rare in politics as well. So when something is unusual, as women are in positions of authority, it gets scrutinized more, differently, the standards are different. That's just true, and I think we haven't moved beyond that completely yet. The media is a big part of it, no question. L.G.: Hillary pointed out that toward the end of her race, she felt there was a lot of gender bias, particularly on some of the cable networks—and you agree with that analysis? C.F.: I don't know how you can disagree. I think we have come to the point where we know, thankfully, that racism is unacceptable. I don't think we have come to the point where we understand that sexism is unacceptable. You know? When male anchors can jokingly say, and everybody gets the joke, "Well, Hillary is going to lose because she reminds people of their first wife," or when detractors hold up signs that say, "Iron my shirt," I mean, that's just not acceptable. L.G.: So do you think if you talk like that enough and get enough attention for it, maybe you will peel off some Hillary votes for McCain? C.F.: Well, you know, this is not a political comment. I think women recognize and understand what goes on with other women, and we empathize. L.G.: Let me ask one last question. I'm just fascinated that your Stanford thesis was on the medieval practice of trial by ordeal.C.F.: I know, isn't that wild? L.G.: Have you gone back to look at it? C.F.: Oh yeah, occasionally. I haven't done it in quite a number of years. But I'll tell you something even crazier. I went back and read text in the original Greek and the original Latin, I really got into it. It was interesting, I found it intellectually challenging. L.G.: And it's had some kind of application to modern times, obviously. C.F.: Well, I wouldn't go that far. L.G.: Did you ever read Sex and the Single Zillionaire? (A cheesy novel, featuring scenes of sadomasochism, by Silicon Valley billionaire Tom Perkins, Fiorina's nemesis on the Hewlett-Packard board of directors.) C.F.: I did not. My husband read a few chapters. L.G.: Did he give it a review? C.F.: Um...I guess his overall thinking was, "too much information."
Wired News  –  Jul 10, 2008 5:15 PM [GMT]  ¦  comment?
found in Technology

Ex-Fed Official Sharply Criticizes Decision to Rescue Bear Stearns
Vincent Reinhart, a former senior policy adviser to Alan Greenspan and current Federal Reserve Chairman Ben S. Bernanke, said the central bank's rescue of Bear Stearns was the "worst policy decision in a generation."
Washington Post  –  Apr 29, 2008 04:00 AM [GMT]  ¦  comment?
found in Business: Economy

Predictably Surprised in 2007—and 2008
Michael Watkins gives his first annual Predictably Surprised Awards. Among the winners: General David Patraeus and Alan Greenspan
Business Week  –  Jan 3, 2008 3:33 PM [GMT]  ¦  comment?
found in Business: Careers

House prices set to fall further: Greenspan
Reuters - House prices in the United States will continue to decline as new sales are still barely denting the supply overhang, former Federal Reserve Chairman Alan Greenspan said on Monday.
Yahoo!  –  Oct 1, 2007 10:07 AM [GMT]  ¦  1 comment
found in Top Stories

Greenspan: Higher inflation to warrant double-digit rates in future
Former Fed Chairman Alan Greenspan predicts in a new book out Monday that the Fed will have to raise interest rates to double-digit ...
USA Today  –  Sep 15, 2007 02:06 AM [GMT]  ¦  1 comment
found in Top Stories

Greenspan's Recession Talk Spooks Market
WASHINGTON (AP) -- During the 18 1/2 years Alan Greenspan was chairman of the Federal Reserve, he scrupulously avoided forecasting recessions. Now it seems he can't stop using the R word, and that has created headaches for his successor, Ben Bernanke....
AP  –  Mar 9, 2007 08:44 AM [GMT]  ¦  1 comment
found in Business