|
|
Enron Mail |
=======================================================
from Gilder Publishing THE FRIDAY LETTER e-mailed weekly, for friends and subscribers ======================================================= | http://www.gilder.com | April 27, 2001 HEADLINES: * The Week/George Bush's Emergency * Dynamic Silicon/Optical MEMS * Friday Feature/Shock Horror: Tax Cuts Spur Entrepreneurs! * Storewidth 2001/The Movie * Watch This Space/Gilder.com * Friday Letter Bonus/Ray Kurzweil's $40 Trillion Bet * Readings * Conference Calendar =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= THE WEEK/George Bush's Emergency from The American Spectator: "Stock market crashes predict recessions rather than cause them. But when the driving force of the economy is exceptionally rapid innovation powered by risk capital, the disappearance in less than a year of $5 trillion worth of such capital, largely as a result of a Federal Reserve sucker punch, must be treated by the government as an emergency. "Even in much of the financial press, the most common reaction to the Nasdaq collapse has been sniggering self-satisfaction that go-go investors have finally gotten theirs. All one needed to do to avoid disaster, high-risk investors are condescendingly told, was to be a sensible fellow and invest in the Real Economy, where they make important things, like Coke or perhaps aluminum-for the cans. "But the 'value' investor snuggled safely on the sidelines is comparatively useless to economic growth. Growth is primarily a function of innovation, and thus of risk. Investors in innovation, against all conventional wisdom, bet that they can beat the market, defying its relentless "efficiency" to seek out as yet unrecognized and undiscounted advance. "This is at the best of times a hazardous undertaking. In the early 1970s, risk capital essentially disappeared, intimidated by a combination of inflation, high taxes and government hostility. The 20-year boom has largely been driven by the restoration of risk capital's rewards. "The Fed's whipsawing of investors over the past 18 months shattered those rewards, discouraging and de-funding the nation's most useful investors. The administration could hardly do anything more useful than create incentives to get them back in the game. It was the capital gains tax cuts of 1978, 1981 and 1997 that most powerfully drove the boom. For those obsessed with surpluses, capital gains cuts //always// pay for themselves. "Cutting the current 20 percent rate by five points and narrowing or ending the distinction between long- and short-term gains would do more to resurrect the Nasdaq than the Fed's rate-cut water torture. And it would do more than all the one-sided bipartisanship and compassionate conservatism in the world to secure the administration's increasingly tenuous political future." The May issue of The American Spectator--"The Current Emergency, The Coming Boom"--rolls out an all-star lineup of economic fire-breathers, including Rich Karlgaard, Larry Kudlow, Arthur Laffer, Alan Reynolds and Brian Wesbury, plus someone named George Gilder. Ask for it at your newsstand, or subscribe online at www.gilder.com/AmSpecSub.asp and get 50% off the annual cover price. ~~~~~~~~~~~~~~~~~~~~ FROM DYNAMIC SILICON/Optical MEMS "Microelectromechanical system-based components will invade the optical network, in photonic switches, simple switches, add/drop multiplexers, variable attenuators, and adaptive equalizers. They will be smaller than macro-scale equivalents because they are fabricated with semiconductor processes rather than with macro-scale machining. They will be cheaper because they are batch fabricated by the tens of thousands in semiconductor foundries. They will be more efficient because they are smaller, have less mass, move smaller distances in tuning, and are on a scale comparable to the wavelengths being manipulated. There's a compelling case for removing electrical signal conversions in the network core. There's equally compelling logic for the invasion of MEMS throughout the optical network" The April issue of Dynamic Silicon, by Nick Tredennick and Brian Shimamoto, is online now. Subscribers can log in at.www.DynamicSilicon.com. ~~~~~~~~~~~~~~~~~~~~ FRIDAY FEATURE/Shock Horror: Tax Cuts Spur Entrepreneurs! MIT's Nobel Prize winning economist Robert Solow likes to crack (apparently un-ironically) that economic theory advances one academic funeral at a time. That goes triply for anything that smacks of -dare we say it?-the supply side. But hope, like growth,. springs eternal. In a new monograph titled "Personal Income Taxes and the Growth of Small Firms", a team of unimpeachably mainstream economists headed by Princeton's Harvey Rosen used tax return data to determine how reductions in marginal tax rates (in this case, the 1986 Tax Reform Act) affect small businesses. No prize for guessing what they found: "The greater the decrease in the sole proprietor's marginal tax rates," the report concludes, "the greater the increase in the size of his or her business." Note that we're talking revenue growth here, not just a post-tax earnings boost. And the results are startling, even after controlling for everything from the entrepreneurs' personal profiles to the industries in which they operate: cutting the top marginal rate from 50 percent to 33 percent increased the size of the average business by 28 percent. That's not trivial in macro terms either. In 1985, non-farm sole proprietors accounted for roughly 20 percent of the $2.8 trillion in US domestic business income. Now maybe the same team can go back to the same data and look at the effects on tax receipts! (A PDF version of the full paper is available for a $5 charge from the National Bureau of Economic Research, http://papers.nber.org/papers/W7980.) ~~~~~~~~~~~~~~~~~~~~~ STOREWIDTH 2001/The Movie We're still hearing raves for Storewidth 2001, wherein the newest link in the Gilder paradigm had its coming-out party among the industry's best and brightest. From EMC and Net App to Yotta Yotta. Yipes and BlueArc, more than 400 storage and networking executives, engineers, VCs and fund managers converged April 10-12 at the Ritz-Carlton Laguna Niguel, to hear what happens when exploding data-storage capabilities collide with the Net's bandwidth tsunami. Slowdown? Not! But this time we're not just talkin' the talk. Through May 15th, the original live Webcast of Storewidth 2001 is available online. A $50 processing charge allows unlimited access to two and a half days of bleeding-edge presentations, strong opinions and onstage pyrotechnics, streamed as fast as your system can take it. Call 1-800-261-5307 to order a password. ~~~~~~~~~~~~~~~~~~~~~~ WATCH THIS SPACE/Gilder.com A lot of you know about www.Gildertech.com, digital home of the Gilder Technology Report and our busiest online outlet. We've also got www.DigitalPowerReport.com, www.DynamicSilicon.com, www.NewEconomyWatch.com, www.GilderConferences.com, and now www.Spectator.org-enough of a handful for us to think seriously about how to tie it all together. The answer we've come up with is www.Gilder.com, an umbrella for both the full range of what we're doing and for the big ideas we focus on in technology, politics and investing. Gilder.com doesn't replace the other sites; it gives them breadth, depth and context. The Friday Letter is a part of this. So are the rest of the new features we'll be rolling out over the coming months. One of those, a live interactive poll, launched this week, asking whether the economy-and markets-may already have bottomed out . We'd like to hear your ideas about other assets and tools you'd like. Check in and check it out. ~~~~~~~~~~~~~~~~~~~~~~~~ FRIDAY LETTER BONUS/Ray Kurzweil's Singularity "You will get $40 trillion just by reading this and understanding what it says." He's not kidding. http://www.kurzweilai.net/articles/art0134.html?printable=1 =-=-=-=-=-=-==-=-=-=-=advertisement =-=-=-=-=-=-=-=-=-=-= Special Online Offer - a FREE Trial Issue of Forbes Magazine! Click on the URL below to order today. https://commerce.cdsfulfillment.com/FRB/subscriptions.cgi?IN_Code=IK03FTA =-=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- READINGS And the Bandwidth Played On http://chronicle.com/free/v47/i33/33a04301.htm IBM Pushes Transistor Wires To1.4 Nanometers http://www.nytimes.com/2001/04/27/technology/27CHIP.html (registration required) Sun Goes Peer to Peer www.internetworld.com/news/archive/04262001a.jsp Cisco's Magical Inventory Tour www.thestreet.com/comment/siliconstreet/1394667.html No Stopping IT Investment www.informationweek.com/834/global.htm NY Times Gives Nuclear Power a Second Look http://www.nytimes.com/2001/04/24/business/24NUKE.html?searchpv=site03 (registration required) Hooked on Hedonics http://globalarchive.ft.com/globalarchive/articles.html?id=010426000990&;query=briscoe Guess Who's Fuelling Anti-Capitalist Protests? http://slate.msn.com/cx/foreigners/entries/01-04-23__104829.asp The Sun Also Warms http://techcentralstation.com/bigshotfriday.asp I , Robot/Ray Kurzweil www.internetworld.com/news/archive/04252001c.jsp =-=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- GET THE GILDER TECHNOLOGY REPORT Monthly, from the Heart of the Telecosm http://www.gildertech.com ~~~~~~~~~~~~~~~~ GET NEW ECONOMY WATCH Reshaping the Competitive Landscape http://www.neweconomywatch.com ~~~~~~~~~~~~~~~~ GET THE DIGITAL POWER REPORT Electrons Matter http://www.digitalpowerreport.com ~~~~~~~~~~~~~~~~ GET DYNAMIC SILICON Linking the Microcosm and the Telecosm http://www.dynamicsilicon.com ~~~~~~~~~~~~~~~~ GET THE AMERICAN SPECTATOR Online special--50% off cover price! http://www.gilder.com/AmSpecSub.asp =-=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- GILDER CONFERENCE CALENDAR September 12-14, Telecosm V, Squaw Creek Resort, Lake Tahoe CA. The one and only. Produced by Forbes Inc and Gilder Publishing. Details and registration at www.forbes.com/conf/telecosm/agenda1.shtml October 22-24, Powercosm 2001, Featuring Peter Huber and Mark Mills, The Fairmont Hotel, San Francisco, CA Digital Power in the Silicon Age. Register now at www.gilder.com/powercosm_forms/Conference.asp October 24-26, New Economy 2001, The Millennium Broadway, NYC. A front-row seat on the transformation of corporate value. Produced by Forbes Inc and Gilder Publishing. Details and registration at www.forbes.com/conf/neweconomy/agenda1.shtml -=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- The Friday Letter is published weekly for subscribers and friends of Gilder Publishing. If someone you know would enjoy it, please feel free to forward a copy. SUBSCRIBE and UNSUBSCRIBE information can be found at the bottom of this email. FRIDAY LETTER STAFF ~~~~~~~~~~~~~~~~~~~~~~~ John Hammill (jhammill@gildertech.com) Jorin Hawley (jhawley@gildertech.com) E-Mail Wizard Dave Dortman Contributors to this week's issue: George Gilder, Spencer Reiss, Brion Shimamoto, Jeff Stambovsky, Bret Swanson, Nick Tredennick, Richard Vigilante ADVERTISING INFORMATION ~~~~~~~~~~~~~~~~~~~~~~~ The Friday Letter is mailed each week to more than 60,000 subscribers and friends of Gilder Publishing. For information about advertising, contact Brian Cole, VP Business Development at bcole@gildertech.com, tel 860-434-0614. FEEDBACK AND PROBLEMS ~~~~~~~~~~~~~~~~~~~~~ Send letters to the editor to Fridayletter@gildertech.com For technical problems, please e-mail Fridayhelp@gildertech.com You can also contact us via: Gilder Publishing, Customer Service 888-484-2727; outside the U.S.1-413-274-3000 1-413-274-3030 (fax) Copyright 2001 Gilder Publishing LLC --- You are currently subscribed to gilder-technology-report as: alewis@ect.enron.com To unsubscribe send a blank email to leave-gilder-technology-report-661837S@earth.lyris.net
|