The major mistake Alan Greenspan and the Fed made was not understanding how the economy could achieve strong gross domestic product growth with low unemployment and still have low inflation ("Feeling the Heat," Cover Story, Apr. 2). Since they have now taken back 150 basis points of the 175 they originally raised, it is obvious the original actions were largely unnecessary.
Don W. Hilgendorf
While private industry has invested in productivity- enhancing technology, the government is still operating as though it were the 1970s. Why can't spending the surplus be an investment to create a leaner government of the future?
"Will refis help refloat the economy?" accompanying your Cover Story failed to touch on a very salient point: Most of the money that has fueled the stock-buying binge has been sucked out of residential real estate in the form of home-equity loans.
Thomas J. Lucier
President and CEO
Home Equities Corp.
Tampa Although relatively uncommon, the sell rating is starting to make a comeback as the bear market takes hold ("A definite `sell'? Gimme 100 shares," Finance, Apr. 2). We applaud your effort to critique the policies and effectiveness of brokerage-house research firms. One gripe: Your calculation of our firm's performance did not include our tech-stock sell ratings. Were these included, the price-performance of our average sell-rated stock would be down 20%.
John M. Eade
Director of Research
Argus Research Co.
New York "All that money on 3G--and for what?" (International Business, Mar. 26) describes 2.5G (GRPS) as a simple and low-cost extension to existing 2G mobile networks. However, the suggested competition between 2.5G and 3G (UMTS) technology is simply not there--the two in fact form an evolutionary path. All GSM operators will use 2.5G; and all ambitious GSM operators will be driven towards 3G. In addition, all will continue to use 2.5G for rural areas. 3G is a much more powerful technology than 2.5G is. True, the latter will generate revenues shortly, while 3G has yet to be built and usage is not (yet) massive. But in the long run, 3G really fires up wireless data.
First, 3G provides much more capacity--some 10 times more users/sessions than 2.5G can handle. Second, 3G provides guaranteed speeds ("quality of service"), essential for professional use and real-time applications, which 2.5G simply cannot match. Third, 3G provides higher speeds (some 5 to 10 times as fast as 2.5G). Any mobile operator with ambitions in wireless data (large user numbers, serious applications, agreed service level) will use 3G technology over the coming years.
Editor's note: The writer is director of strategy and 3G for Ben Nederland, a GSM operator with 2.5G and a 3G license.
The new 2.5G services will not deliver "data speeds two to three times faster than before." They will launch with theoretical rates of around 20 or 40 Kbps, but with packet-switching the resource is shared so the real rates are much lower.
What is really ironic is the fact that tariffs will be based on the amount of data used, not on time and distance (the current model). What counts is not the speed at which e-mail and other data are delivered, but the cost.
Eindhoven, Netherlands Regarding "How to fix America's schools" (Cover Story, Mar. 19): Today's school curriculums de-emphasize core rote learning (multiplication tables, addition and subtraction, spelling, and phonics) and emphasize group learning, learning processes, self-esteem, etc. A review of our most successful inner-city schools will show that virtually all of them use some type of basic core learning curriculum.
William A Cooper
Children in poverty have few immediate incentives to do well in school. Children living above the poverty line often get toys or money for doing well. Children shouldn't be expected to be motivated merely by potential rewards many years from now when they're grown up. If paying teachers for performance works, then paying the students for performance would probably work even better.
Michael W. Hesik
Sandy Hook, Conn. "Railroads: Asleep at the switch" (Industrial Management, Apr. 2 in some editions) failed to mention that railroads have invested $263 billion of their own funds since 1980 to maintain and improve their equipment and infrastructure, while highway maintenance and improvements are funded through billions of taxpayer dollars annually. Railroads are the most capital-intensive industry in America, annually reinvesting more than 20% of revenues into capital improvements, five times the average for manufacturing.
Edward R. Hamberger
President and CEO
Association of American Railroads
Washington As someone searching for a new car, I find it disconcerting that John Devine, vice-chairman and chief financial officer of General Motors Corp., does not own a GM automobile ("Can GM keep John Devine's promise?" People, Apr. 2). Wanting to buy a 1954 GMC Pickup and a 1967 Corvette is not the same as owning the real McCoy.
Adam J. Moffatt
Minneapolis As former dean, I would like to call attention to one of the largest part-time graduate schools in the country: Keller Graduate School of Management ("MBAs for working stiffs," BusinessWeek Investor, Mar. 26). At Keller, more than 3,000 students are enrolled in the MBA degree program, which is offered at 39 centers in 13 states as well as on the Web. This total enrollment would rank Keller as third on your list.
O. John Skubiak
Oakbrook Terrace, Ill. "'Round midnight" (BusinessWeek Lifestyle, Apr. 2), reminded me of my favorite jazz spot in Chicago, Joe's Be-Bop Cafe & Jazz Emporium at Navy Pier. Joe's serves up a sizable menu specializing in barbecue, and by nightfall the joint is jumping with live jazz. Bebop is often considered to be the pinnacle of jazz. Joe's ranks right up there with other pinnacle jazz joints.
Diane E. Alter
Long Beach, N.J. Regarding "Good food, poor judgment" (The Barker Portfolio, Apr. 2): Thank God somebody finally took responsibility for a bad pick!
It's amazing how Chart House Enterprises cannot make money. I stop at the unit west of Denver en route to Vail all the time. It is always crowded, has the best salad bar in the world, a great view of Denver, and high prices. What's with this company?
They tried to cut back on the value they offered their customers--it showed!
John L. Warren