What we’re reading (10/28)
“The Hard Truth: Americans Don’t Trust The News Media” (Jeff Bezos, Washington Post). “In the annual public surveys about trust and reputation, journalists and the media have regularly fallen near the very bottom, often just above Congress. But in this year’s Gallup poll, we have managed to fall below Congress. Our profession is now the least trusted of all. Something we are doing is clearly not working. Let me give an analogy. Voting machines must meet two requirements. They must count the vote accurately, and people must believe they count the vote accurately. The second requirement is distinct from and just as important as the first…Likewise with newspapers. We must be accurate, and we must be believed to be accurate. It’s a bitter pill to swallow, but we are failing on the second requirement…Presidential endorsements do nothing to tip the scales of an election. No undecided voters in Pennsylvania are going to say, ‘I’m going with Newspaper A’s endorsement.’ None. What presidential endorsements actually do is create a perception of bias.”
“Economists Warn Of New Inflation Hazards After Election” (Wall Street Journal). “A punishing 2½-year fight to bring inflation down appears to be succeeding. The election could change that. Inflation has fallen thanks to higher interest rates and big assists from healed supply chains and an influx of workers. But whether borrowing costs and price growth continue to ease next year could turn heavily on policy choices by Donald Trump or Kamala Harris.”
“Partner Pay At Big 4 Firms Is Dropping, The Latest Sign Of The Consulting Slowdown” (Business Insider). “Partner payouts at the Big Four consultancies are falling as demand for professional services declines and firms increase the number of partners. At EY, partner payouts in the UK, where the global consulting and accountancy firm is headquartered, were down by 5% this year.”
“Who Says Another Google Is Coming?” (Freddie DeBoer). “The trouble is that there hasn’t been a new Google or Facebook since Google and Facebook. There’s been plenty of profitable new companies, mind you. Uber has gotten rolled up into many people’s conceptions of huge successful Silicon Valley firms, and setting aside any questions about their business model, it’s true that the company has grown quite large. But large is relative; Uber’s market cap is less than 10% of Google’s. And besides, it’s too late to get in early on Uber. The company will be old enough to drive next year. (See what I did there?) There simply hasn’t been any success stories on the scale of Google and Facebook since. A lot of profitable new firms, meanwhile, aren’t sexy in the way tech firms are perceived to be sexy. Dirt-cheap Chinese clothing company Shein was a darling for awhile, but it’s a clothing company. They sell people physical goods. Not sexy! Stripe, Zoom, Slack - potentially sexy, to a certain kind of person, but nobody’s 100x’d their money. Now that the party’s over and the Fed’s free beer era is over, the macro conditions are putting more and more of a squeeze on potential startups - it’s much more expensive to borrow and there’s less incentive for investors to chase moonshots. So your idea has to look really impressive.”
“Scale And Scope In Early American Business History: The ‘Fortune 500’ Of 1812” (SSRN). “Fortune magazine began publishing annual rankings of U.S. corporations by revenue in 1955. Ever since, scholars and forecasters have analyzed changes in the Fortune 500 to help inform their judgments about industry concentration and the relative importance of different sectors of the economy. Unfortunately, earlier data are scarce, especially before the Civil War. Through extensive research we have created a sort of historical ‘Fortune 500’ going back to 1812, ranked by corporate capitalization, which we share here. Numerous insights can be drawn from this dataset, including the historical dominance of the banking and finance sectors and the early importance of manufacturing. Perhaps the larger significance of being able to come up with a Fortune 500 for 1812, though, is the fact that even with a population of only about 7.5 million, U.S. already had more business corporations than any other country, and possibly more than all other countries put together, securing its role as the world’s first ‘corporation nation.’ The ease of incorporating businesses released a lot of entrepreneurial energy that helped to build an ever-expanding economy and by the end of the 19th century, the U.S. would be the world’s largest national economy with tens of thousands of corporations.”
