GOING TO THE DOGS
Barron's November 8, 1999
Going to the Dogs
By Alan Abelson
Al Gore has signed on for a personality makeover. Actually, it's less a
rehabilitation than a construction job. Apparently, whoever fashioned the
original forgot to put a personality in.
The designated quick-change artist is Naomi Wolf. Ms. Wolf was chosen
largely because of her name, since one of Mr. Gore's conspicuous lacks is
animal magnetism.
Her previous experience as political cosmetician was in the 1996 Presidential
election when she strongly advised redoing Bill Clinton's image to make him a
good-father role model. It's hard to measure success in this kind of endeavor,
but we haven't run across too many people who think of Bill Clinton as
America's Dad.
Ms. Wolf's challenge is to turn Mr. Gore into what she terms an "Alpha male."
In case you're wondering, nothing untoward here: "Alpha male" is hip lingo for
top dog. And, of course, who better to instruct someone how to become
leader of the pack than a Wolf.
Mr. Gore's problem, according to her diagnosis, is that he's a Beta male -- in
other words, not the lead dog, just a follower with rather an uninviting view of
the dog in front of him. Another way to describe it is that he's Vice President.
And for such insights, Ms. Wolf was pulling down 15 grand a month! Boy, do
we ever need campaign finance reform.
Her principal prescription for remedying his deficiency calls for Mr. Gore to
become more forceful, assertive and aggressive -- in short, more Alpha-like.
Which explains his odd behavior in his initial debate with Bill Bradley --
bounding hither and yon about the stage, barking wildly at the uneasy Mr.
Bradley and slathering abundantly over the audience like some uncontrollable
eight-month-old Lab that had slipped its leash.
In truth, Mr. Gore seems to be suffering from a severe case of canine
confusion. For in contrast to his current yen for achieving Alpha-dog status, a
scant few months ago, as he set out to do battle with Mr. Bradley, he was
proclaiming himself with great relish the underdog.
For its part, the Republican kennel is the poorer for having lost its prime
rottweiler, Pat Buchanan, leaving it with an aloof show dog (Mr. Bush) who
refuses to swap sniffs with the other mutts; a feisty boxer (Mr. McCain), a
pampered poodle trying to make like a mastiff (Mr. Forbes) and a ferocious
chihuahua (Mr. Bauer).
Mr. Gore's preoccupation with how to growl and bare his fangs is particularly
puzzling. Anyone who has ingested the fetid fumes of national politics as long
as he should have gained a glimmer of awareness that what matters most to
voters is not body language or the cut of his jib but how well they're faring.
And on that score, there's more than enough for even an Omega dog to wag
his tail at. As last week afforded fresh reminders in the form of the October
employment report, highlighted by the addition of 310,000 jobs and a drop in
the unemployment rate to 4.1%, and the resurgent stock market, spearheaded
by Nasdaq's vaulting the 3000 mark.
If Mr. Gore can ever get his head screwed on right and shake off the miscues,
gaffes and pratfalls that have hounded his astonishingly clumsy effort, he might
find incumbency is not necessarily the encumbrance the conventional wisdom
deems it to be. There are worse things to campaign on than the longest
peacetime expansion in the country's history, explosive job growth,
accompanied by the lowest unemployment rate in 30 years, bubbling
consumer confidence, a mighty technological eruption and, not least, the
greatest bull market ever, with nearly half the population among the revelers.
You may protest that Mr. Gore can't properly claim credit for any of these
blessings, much less all of them. But such a quibble, however well grounded,
is, alas, naive. For it fails to recognize that Mr. Gore is a politician and as such
is entitled by lore to claim credit for the sun and the stars. And besides, Mr.
Gore did, after all, invent the Internet.
Need we say that even such rich campaign fodder as is seemingly available
to Mr. Gore could prove ephemeral. One obvious risk is an inflationary
flare-up, something the markets lately have tended to downplay, thanks to
such soothing data as the recent modest rise in the employment cost index and
last week's job report showing a miserly increase of a penny in average hourly
wages.
Nonetheless, while they may not as yet manifest themselves in wage costs,
there are inflationary stirrings that are worth taking note of. One is the further
price pressures cited in the latest survey of corporate purchasing managers.
Another is last month's leap in the Economic Cycle Research Institute's gauge
of future inflation to a four-year high; the October rise, coupled with
September's, marked the biggest two-month advance in the index in 16 years.
And then there's the source of all our bliss and prosperity -- that old bull
market. Its renewed thrust has been fueled by a growing conviction that the
Fed won't raise rates again later this month, thanks to those more benign
readings on labor costs. Ironically, though, the very enthusiasm inspired by
such conviction might, if it waxes strong enough, prompt the Fed to nudge
rates higher.
In any case, there are mounting signs of irrational exuberance, most
conspicuously among the Internet and tech IPOs. To cite the more extreme
recent examples: Akamai Technologies, offered at 26, ended its first day of
trading at 145 and change and a couple of days later topped 200. Intertrust
Technologies, offered at 12, wound up the first session above 54 and quickly
ran to 85. JNI Corp., offered at 19, closed out its first day at 42 and
proceeded to surge to 114 3/4. Sycamore Networks, offered at 38, zoomed
to over 270 the first day. Aether Systems, offered at 16, after tripling in its
opening session, moved up as high as 82 3/4.
But of course, there's absolutely no evidence of a bubble.
Except to spoilsports like our old pal Barton Biggs, who divines a giant
bubble in the Internet stocks and the tech IPO market and foresees it coming
to a very bad end. He explains his forebodings in his latest Morgan Stanley
commentary with help from a couple of choice facts:
1: "Of the 1,200-plus technology IPOs since the debut of the personal
computer in 1980, a mere 5% have created 86% of the wealth."
2: "The 241 major Internet stocks have a combined value of $549 billion, with
sales of only $24 billion and a combined loss of $7 billion."
Only geriatrics remember an earlier tech bubble, which began in 1982 when
this great bull market was born, expanded with the speed of light, only to
burst in 1983. Scores and scores of PC companies came public and, like
today's Internet firecrackers, were bid up to huge premiums.
As Barton points out, after they crashed, techs were in the doghouse for eight
years. And although PC unit growth continued to compound at a sizzling rate
of better than 25% a year, only one company launched during the early
'Eighties boom survived -- Apple Computer. Dell and Compaq debuted after
the bubble burst, while Microsoft went public in 1986.
The moral, Barton reflects, is that the nature of technology is "creative
destruction." And in the particular case of the Internets et al., among the things
likely to be destroyed is a massive amount of wealth.
So it behooves Mr. Gore to get the most out of that fodder while he can. (If
he takes our advice, he can send the $15,000 to a charity of his choice.) |
