September 25, 2011
| Resolving the EU’s debt crisis might be affected by political indecision. America’s economic recovery, however, is affected by political infighting and proposals of Keynesian-style stimulus packages that have no chance of being adopted by Congress and are inappropriate at this junction in time. The lessons of the 1980’s recovery could help end the current policy paralysis in Washington |
| The news that Steve Jobs has left Apple due to illness has brought to mind another outstanding American entrepreneur I have actually met in Sydney in 1985, the one and only Ben Rosen. At the time, I was a very young marketing and sales consultant at ComputerLand, promoting the products of a PC industry still in its infancy.At the beginning of the 1980’s when the microcomputer revolution started, the Anglo-Saxon world was going through a severe recession. To reduce unemployment, the Australian Labour government invested heavily in retraining the unemployed, enabling many, including myself, to get jobs in high tech industries – an area of the economy hitherto closed to them due to lack of adequate skills. Ben Rosen came down to Sydney to talk to us about the virtues of a new relational dbase product – Paradox – he happened to be involved in at the time. He was jovial, friendly and unassuming. His venture capital company had made Compaq Computers the most successful company in capitalist history and he was also behind the huge success of the Lotus 1-2-3 spreadsheet package. In fact, many of today’s hardware and software companies that are the pride and glory of Silicon Valley could not have seen the light of day without his stewardship and money. To be sure, the US federal government did its bit and helped the microcomputer industry take off, as it became its most important buyer, seconded by universities all over the country. As a graduate of the prestigious Caltech Institute and the holder of a Master’s in Engineering science, Ben Rosen decided to work on Wall Street as a technology consultant. He was known to carry around to his clients an Apple IIe computer and was eager to invest in the first-ever portable microcomputer, Compaq. Unlike today’s Wall Street advisers who prefer to recommend various speculative investments to their clients, he made his reputation and money the old-fashioned American way, that is by investing in start-ups and asking his friends and clients to do the same. Together with his brother, he also invested 24 million dollars of his own money in the production of a clean car engine, a venture that did not find favour with US car manufacturers at the time. Today, when neoliberal economics have been thoroughly discredited, the work of Ben Rosen the entrepreneur and investor should become a model to be emulated. The presence of too many MBA graduates specialising in financial transactions and the relative scarcity of technology consultants, such as Ben Rosen, underpins America’s current predicament. As matters now stand, the US economy has all but hollowed out, deriving more than 35 percent of GDP from financial transactions, including speculations. Naturally, there is a way back from the brink, if only the US’ two major parties could put ideology aside and work together with the private sector in addressing the ills of the American economy and the plight of the unemployed. |
