Legalized Bribery in Congress

I was struck by many of Thomas Friedman's points in his NYT column yesterday about the Tea Party and the quest for national leadership.
But what hit me hardest was this aside: "our Congress a forum for legalized bribery." That's a pretty astounding observation to come from the lead columnist for the nation's establishment newspaper.
Much of what we call politics is about companies and interest groups coming to Washington in search of money. Politicians respond by talking only to constituents who have contributed to their campaign efforts. It's hard to see this as anything but bribery, even if the politicians aren't allowed yo keep the proceeds in small bills in their freezers.

A Beer rant

Time Magazine reports a study by two profs -- U Mich and Penn, Time says -- that concludes that observers judge people holding alcohol -- in person or in photos -- to be stupid.
So what, I say.
The problem is if you put down your can of PBR you'll forget where you put it, and then you'll have to open another can and if you put that down, someone might use it for an ash tray and then the beer tastes even worse, and then you open another can and put that down and forget it and pretty soon you have half-full cans of beer all over the place and you have to go back to the store and buy another case. So the fact is that holding a can makes you seem stupid, but putting it down is stupid.

Hurd to Oracle

It's going to be very interesting to see how things work out at Oracle with Mark Hurd replacing Chuck Phillips. I interviewed Mark a number of times when I was covering Teradata and NCR, and I thought he did a good job there. I have admired from afar the stock appreciation he achieved at Hewlett-Packard.
But the dysfunctional departure from H-P would give most boards reason to hesitate about hiring him. Oracle's a special case because Larry Ellison is supremely self-confident and also has total control of the company as long as he wants it. Hurd could do the dirty work of making Oracle's Sun acquisition profitable. And he's no threat to Ellison despite his formidable job history.
Hurd came into H-P as a low-ky, nuts and bolts manager who was initially welcomed as the antithesis of the charismatic Carly Fiorina. He cut costs, focused on profits and delivered a steadily increasing stock price. He made H-P No. 1 in PCs and made them profitable. He then acquired EDS, vaulting H-P past IBM to become the world's biggest IT company in terms of revenue.
But the H-P board jumped at the chance to fire him when a former contractor made unsubstantiated claims of sexual harassment, that even the board agreed weren't firable. Instead the board indicated he had lost its trust by fudging some expense accounting. As in many such cases, (think Larry Summers at Harvard) the firing occurred because Hurd had lost his reservoir of internal support for a variety of reasons and nobody (except the shareholders) felt like coming to his aid.
The New York Times savvy Joe Nocera http://www.nytimes.com/2010/08/14/business/14nocera.html?_r=1 noted that Hurd had saddled the board with blame for the notorious pretexting scandal in which company detectives spied on journalists. He also points out that Hurd's profit improvements partly reflected sharp cuts in R&D spending, a long-time point of pride for H-P.
I think the jury is still out on whether EDS was a good strategic decision. Even though H-P is working to cut costs, the service profit margins appear to be far lower than those at Accenture or IBM. EDS is regarded as a "body shop" without much intellectual-property that could be leveraged for higher margins. Analyst Bob Djurdjevic, who has watched the space for years, noted that last year in an earnings report, Hurd seemed to be trying to pretend that EDS revenues were boosting H-P's service business while trying to ignore the actual revenue declines at EDS. http://www.djurdjevic.com/Bulletins2009/10_HP_2Q.html Another data point: after stories reported Hurd's dismissal, the comments section of the Wall Street Journal was full of scathing remarks by H-P workers who celebrated his departure.
Hurd may be the perfect manager to make Oracle's Sun acquisition work. He undoubtedly will have his hands full. Sources tell me that IBM, foreseeing continued losses at Sun, was offering a substantially lower price when Oracle rescued its Silicon Valley neighbor. But Hurd is likely to be even more unpopular in Silicon Valley if he follows his formula of gutting R&D and firing thousands of engineers at Sun.