Author T. Jefferson Parker interviews Michael Crichton
In 1992, author T. Jefferson Parker interviewed Michael Crichton about Rising Sun for the Los Angeles Times. Michael Crichton talks about the controversy surrounding the book, expounds on the themes of the book and as was often the case speaks presciently about the state of the American economy. In this excerpt from the interview over twenty years ago, he talks about problems that are even more acute today:
“It’s possible to argue that Americans have had no increase in real earnings power since 1962. Some ecconomists would dispute that, and set the date at 1973.
Either way, the country is in a steady, consistent and ongoing decline. Why? That’s an extended conversation. I’ll just mention three things I think are of equal importance.
First, American business emerged from the postwar period in a postion of tremendous superiority. Principal competitors of pre-World War II – Germany and Japan – are devasted. So American business is pumped up from wartime production, and everyone is feeling really good. We are on the top of the world. That inevitably breeds complacency, and Americans had a long period of complacency.
Secondly, in the postwar period, Americans turned away from quality as the principal goal. Japanese, restructuring their companies, made exactly the opposite decision. American quality-control experts who worked in America during the Second World War, became very nearly living treasures in Japan. So Japan and Germany have had decades of structuring business in the direction of quality, whereas Americans had had decades structuring business according to … other principles.
Thirdly, the cost of capital. The decline of the individual investor and rise of the institutional investors as the primary player in the stock market, and the change in tax laws so there’s no advantage in long-term as opposed to short-term investment, have meant that the American stock market is now entirely speculative.
No one invests in a company anymore, in the way it was done in the ’50s because they believe the company is good. They buy because they think the price of the stock will rise or fall. What this means is that American managers are obliged to manage in the short term. There’s no incentive for an investor to hang on with a company for the long term. In Japan, savings – up to a certain point – are tax free. Why is that not also true in America? You want savings? Then don’t tax it as ordinary income.”
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