"Mr. Risk goes to Washington" (Cover Story, June 12) seems to affirm the appointment of Goldman Sachs Group's (GS) Henry "Hank" Paulson Jr. because he communicates about risk well and believes in it. The problem is, our national and state governments are increasing risk without proper safeguards. Growth with deficits works as a short-term strategy, but not when deficits are an addition to politicians unable to govern responsibly. I hope Paulson can provide inspiration and balance, but your article indicates that it will be more of the same, just articulated better.
Interesting that BusinessWeek's June 12 issue focuses on how Enron's execs so carefully manipulated the letter of the law ("Enron's last mystery," Special Report). Also covered is misbehavior by executives at government-sponsored Fannie Mae (FNM) ("It looks like Fannie had some help," News: Analysis & Commentary). And Mr. Risk, Hank Paulson, is described as the perfect pick for Treasury Secretary. Yet the Fannie story says that "in 2001, Goldman Sachs designed a mortgage-backed security that it said in a Nov. 19 presentation would allow Fannie to 'better manage the recognition of income' for accounting purposes," according to an Office of Federal Housing Enterprise Oversight report, which also said that the transactions "had no significant purpose other than to achieve desired accounting results."
Mr. Risk will likely further entrench America's irresponsible, loophole-seeking executive culture of outsize compensation noted in Mark Gimein's commentary, "The Skilling trap" (News: Analysis & Commentary). Bad behavior may be rare, as Jack and Suzy Welch noted ("The real verdict on business," The Welch Way), but more of those at the top need to stop having so much fun playing with the rules and start abiding by the spirit of the law.
Brad Mum Brue
Thank you for the insightful article, "Inside Wall Street's culture of risk" (Cover Story, June 12), on how Wall Street and investment bankers are ramping up risk. I, too, have taken risk to heart. Over the past two months I have taken the risk of building cash reserves. I have not had the advantage of eight computer screens and 36 sophisticated algorithms. Just pencil and paper and a little common sense.
I found it interesting to overlay simple 7% and 8% and 9% growth lines over the Standard & Poor's 500-stock chart. Guess what? Except for the "bubble," the chart tracks perfectly with the 8% growth line. "Hanging in" through the ups and downs does pay off.
Re "Enron's last mystery" (Special Report, June 12): It is remarkable that Vinson & Elkins' prominent role in Enron's business, combined with the recent indictment and trial of numerous general counsels of public companies, has not generated more involvement by CEOs and directors in selecting and overseeing major outside legal counsel engagements. External law firms actively participate in "bet the company" decisions regarding acquisitions, financings, competitive practices, and litigation. With numerous large law firms exceeding $1 billion in annual revenues, these "law businesses" must be viewed as major service providers subject to periodic scrutiny by senior executives in addition to the general counsel.
Re "Satisfaction not guaranteed" and "Dell: Facing up to past mistakes" (News: Analysis & Commentary, June 19): We have acknowledged that our service and support for consumer customers did not keep pace in the rapid growth of that market two years ago. Regrettably, we let some of our customers down. Dell's efforts to restore customer satisfaction include hiring 8,000 new service agents over a three-year period and providing additional training to current agents in our network of 30 global call centers; and implementation of new tools to assist our agents to better serve our customers, including DellConnect, a remote diagnostic tool that has been used for more than 500,000 service calls with a 95% satisfaction rate. We are also opening or expanding 14 facilities worldwide to better design, develop, manufacture, and service our products close to our customers.
Dell leads the industry in supporting commercial, government, and education customers, which account for 85% of the company's revenues. Dell has ranked first in the Technology Business Research Inc. Corporate IT Buying Behavior & Customer Satisfaction Study for 21 of the 22 quarters it has been conducted. And Dell was selected the top equipment brand in a survey by ACNielsen of information technology executives in the U.S. who cited Dell's value and outstanding customer service.
Dell is committed to regaining its leadership position in consumer service and support. Nothing short of being No. 1 in the eyes of all our customers is acceptable for us.
Lynn A. Tyson
Vice-President for Investor Relations
& Corporate Commincations, Dell Inc.
Round Rock, Tex.
"Snarl in the sky" (News: Analysis & Commentary, June 5) lets passenger airlines off the hook and inappropriately blames businesses that use their own aircraft for congestion in the nation's aviation system. Several critical points were missing entirely: Government organizations, including the Government Accountability Office, and aviation industry figures have said that the airlines' hub-and-spoke networks drive air traffic congestion. Business aviation is only a single-digit percentage of traffic at the 20 largest hub airports. Finally, you failed to note that business aviation flights typically take place at altitudes above and below passenger airline traffic, out of the way of the large commercial airplanes.
President and CEO
National Business Aviation Assn.
For the 20 million people living in the New York-New Jersey-Philadelphia metropolitan area, the noise and pollution caused by already high private jet-aircraft traffic represents a sharp drop in quality of life for the convenience of just a few.
Re "The GOP homes in on the suburbs," Government, June 5): While we appreciate the efforts of the Republican suburban caucus in Washington, we, as suburban Illinois legislators, believe that a one-suburb-fits-all approach of the Republican national suburban agenda has severe shortcomings. It takes existing local and state programs and "nationalizes" them, adding a duplicate layer of bureaucracy with unfunded mandates.
It misleads voters into believing that our communities and states are not addressing key issues of concern. It also ignores a host of federal programs, such as Special Education, No Child Left Behind, and CREATE (Chicago Region Environmental & Transportation Efficiency Program), that have been underfunded, leaving suburban schools and communities empty-handed.
State Senator Susan Garrett
State Representative Elaine Nekritz