Paying a Price for Success
Lambro, Donald, The Washington Times (Washington, DC)
Last week was a time of unbelievable paradoxes in the American economy.
The Justice Department won the first round in its bitter lawsuit against Microsoft, convincing a judge that the most successful technology venture in history has been too successful, and should be regulated by the people who defended the Post Office monopoly and swept the Clinton campaign-finance scandal under the rug.
Meanwhile, the U.S. economy's technology sector was in a nose dive on Wall Street in the midst of an era of record-breaking economic growth and one high-tech breakthrough after another. IBM, for example, announced last week it had developed a technique for making computer chips that are one-third faster than existing chips, as America continued to race ahead of every competitor on the planet.
Last week's Nasdaq collapse came at a time when the Internet is exploding as a major force across the global economy, spawning a whole new generation of e-commerce enterprises from here to China.
But most level-headed analysts on Wall Street saw the sharp decline in the Nasdaq as a long-overdue correction in a sector that is filled with too many wildly overpriced Internet stocks that have no profits, few assets, and whose volatility was distorting the rest of the market.
This is a healthy correction, in which tech money is flowing into larger and more stable technology companies such as IBM, Texas Instruments, Motorola and Intel, while the ruthlessly efficient free market downsizes a fat and overloaded Internet sector in preparation for its next upward climb.
"The high rate of new-company formation has led to an environment in which consolidation is a natural outcome, and that already is underway," said Tim Koogel, chief executive of the premier search and directory site Yahoo!, which reported net income of nearly $79 million for the past three months.
But what of the bizarre goings-on in Judge Thomas Penfield Jackson's U.S. District courtroom? The case was pushed by Bill Gate's enemies, Sun Microsystems, Oracle, Netscape and other embittered high-tech executives who were jealous of Microsoft's success. They whined and complained that their products were being pushed out of the marketplace by Microsoft, and got a bunch of liberal litigators in Bill Clinton's Justice Department to pursue a case that the Federal Trade Commission had decided was without merit.
These executives decided that, with a little help from their cronies in the White House (which they helped elect with their money), they could achieve in the courtroom what they could not achieve in the marketplace.
Judge Penfield's ruling is without merit. He claims Microsoft has stifled software competition in the marketplace and harmed consumers. …