Silicon Valley hubris watch, Mary Meeker edition
Maybe it’s the Palo Alto drinking water? It’s got to be something like that, in any case — some kind of causal explanation of why so many people start fancying themselves experts on public policy the minute they become successful in Silicon Valley.
Often, this kind of thing manifests itself in hubristic runs for public office, as we remember all too well from the political ambitions of Carly Fiorina and Meg Whitman. Other times, it’s the likes of Vinod Khosla or Pierre Omidyar declaring that they’re going to save the planet by means of for-profit microfinance. This time, it’s Mary Meeker, freshly arrived in the Valley, taking it upon herself to publish a 466-page PowerPoint presentation, not to mention a BusinessWeek cover story, based on the conceit that you can analyze the US fiscal situation as though the country were a company.
The presentation will surprise no one who has been following the fiscal debate at all, except for in the stunning vagueness of its “potential policy solutions.” Actually, it’s worse than that: after more than a year of Meeker’s self-described “deep dive” into America’s finances, she declares with no boldness at all that “we do not take a view on preferred policy options.”
As for the BusinessWeek article, here are the companies mentioned, in order: Apple, Microsoft, Apple, Apple, Apple, Microsoft, Dell, Amazon, Google, eBay, Morgan Stanley, Kleiner Perkins, Morgan Stanley, Morgan Stanley, Kleiner Perkins, Harvard Business Review, Microsoft, Nokia, Nokia, Google, Apple, Microsoft, Nokia, Nokia, eBay, Facebook, Google, Yahoo, Apple, GM, GM, GM.
Well, at least she mentioned one genuinely industrial company, there, at the end. But it’s incredibly unclear what she’s advocating: first she says that GM’s restructuring “can serve as an example for the future,” but then she quickly backtracks, saying that “no one would recommend that USA Inc. follow a similar course of slashing, burning, and stiffing bondholders.”
The truth of the matter is that you can’t run the country like it’s a technology company, and you can’t analyze it that way either. And it’s impossible to know what to make of rhetoric like this:
Once you understand USA Inc.’s main problems, the solutions become almost self-evident…
There’s a lot that can be done to make USA Inc. operate like a well-run business. A corporate turnaround specialist would quickly hire an independent firm to conduct an audit of each business line…
I hope it’s clear by now that USA Inc. has a spending problem, not a revenue problem…
In 25 years of studying tech companies and working in financial services, I’ve discovered that people will sacrifice if they have a clear idea of what their sacrifices can accomplish. I think the same goes for USA Inc…
USA Inc. needs to prime itself for renewal—and prepare for brutal decisions that change how we do business.
Actually, the solutions aren’t self-evident. Try asking a “corporate turnaround specialist” to turn around a corporation run as a democracy, where every employee gets an equal vote. Auditing business lines isn’t going to help you much there. Besides, Meeker’s “spending problem” is in the future, and overwhelmingly in Medicare and Medicaid — her “negative net worth” number of $44 trillion for the USA includes $58.1 trillion in future Medicare and Medicaid liabilities. And her solutions on that front are all but nonexistent: “isolate and address the drivers of medical cost inflation” or “improve efficiency / productivity of healthcare system” are not an answers so much as just ways of restating the question.
There’s really no point in calling for “brutal decisions” while at the same point refusing to take any view on what those decisions should be. And it might come as a shock to Meeker, but you can’t really extrapolate from the rich and well-educated employees of technology and financial-services firms to Americans as a whole. Ask Wisconsin’s Scott Walker about Americans coming together to make sacrifices for the greater good of the whole.
The main conclusion I draw from this report, then, is that once again Silicon Valley has managed to produce someone who thinks that their success in the tech industry qualifies them to talk with great certainty about issues they don’t really understand. Washington is full of fiscal-policy wonks, and Meeker has spent a lot of effort recreating standard fiscal analyses. But at least the Washington types understand that fiscal policy is a political issue, rather than something which can be solved with consultants and PowerPoint. And that’s something which seems to have eluded Meeker entirely.