The Business Year in Review

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Fed chief Alan Greenspan is gone; podcasting is here; health care costs are crippling manufacturers; Google is a success story; and big-name executives go to jail. New York Times columnist Joe Nocera reviews the year in business with Linda Wertheimer.

LINDA WERTHEIMER, host:

This is WEEKEND EDITION from NPR News. I'm Linda Wertheimer. Coming up, pop, pop, fizz, fizz.

But first, 2005 set Martha free, found GM's hands tied by their retirees and made all the "Desperate Housewives" fit into a little bitty iPod. Of course, they are all very skinny, as you know. So who says Wall Street is boring? Our friend from the business world is Joe Nocera, a columnist for The New York Times. He joins us from the studios of WFCR in Amherst, Massachusetts, to talk about this year in business.

Hey, Joe.

Mr. JOE NOCERA (The New York Times): Hi, Linda.

WERTHEIMER: Federal Reserve Chairman Alan Greenspan--He is leaving the job after nearly 20 years. He was first appointed Fed chief in 1987. Now without overdoing it, is there a way to describe the psychological effect of this exit? After all, presidents come and go, but Alan Greenspan is always sitting there looking vaguely puzzled.

Mr. NOCERA: Well, as we used to say in my Catholic grade school, it feels like our guardian angel is leaving.

WERTHEIMER: Oh, yeah?

Mr. NOCERA: And until, I would say, the bubble burst in 2000, it did feel like he had this magical control over the economy. Primarily, of course, he was an inflation fighter and indeed, I think the Federal Reserve chairman's job has now come to be fundamentally defined as somebody who keeps inflation under control. One of the things Greenspan did that I think's really important that people don't think enough about, the Fed was a very, very close-mouthed place when Greenspan took over in 1987, and despite his reputation for mumbling his way through congressional testimony, it has become much more transparent.

WERTHEIMER: Let's talk about some of the other issues that are affecting very big industries, companies that are struggling with health care and pension issues, car companies GM and Ford, airlines Delta, Northwest. We've talked a lot about these industries over the past year, but is a big part of their trouble the fact that the cost of health care is outpacing even the biggest of big businesses?

Mr. NOCERA: That's certainly part of it. You know, ultimately, the nation is going to have to figure out a way to deal with health care and delivering health care and a health-care system that is not reliant on the manufacturing industries to provide it, because there will not be any manufacturing industries if we can't figure out a way out of this.

WERTHEIMER: Let's look at a little spot of good news here, Google and their success.

Mr. NOCERA: Oh, boy. Is there anything these guys can do wrong? Apparently not. The stock is well over 400 now. It opened at 80-something a year and a half ago. And recently, they signed a deal with AOL which is--was once thought to be dead and buried, which seems to have bolstered both Google and AOL. As they say, the Google guys seem to walk on water. I don't think that'll last forever, but it certainly seems to be the situation right now.

WERTHEIMER: Apple and iPod are making television shows available on itty-bitty screens. Is this something that you think consumers are going to buy? Is this a great leap forward for the new media economy?

Mr. NOCERA: I personally am a little dubious about this. I do think people actually like watching television through a cable box and on a big television screen, and--but, having said that, Disney, the company that did the deal with Apple, has been the company that also has been most outspoken about the need to change so much of what's going on now in terms of movies and television in order to get in front of the Internet. And their goal is not to have happen to them what happened to the music industry, where the music industry wasn't paying attention until it was too late, and, by then, they had lost control of their ability to sell their product because so many people could get it for free by, in effect, stealing it from the Internet.

WERTHEIMER: Now we can't get through a business report these days without talking about jail time.

Mr. NOCERA: And there was a lot of it this year.

WERTHEIMER: This year, a Birmingham court found Richard Scrushy, the former head of HealthSouth Corporation not guilty of bilking the company. But Bernie Ebbers of WorldCom was not so lucky, nor was Dennis Kozlowski of Tyco. What do you think has been the effect of these cases?

Mr. NOCERA: The real effect has been on boards of directors and on CEOs all over the country. Bernie Ebbers, Dennis Kozlowski, John Rigas, who ran Adelphia, they were not only found guilty but they were sentenced to 10, 15, 20 years. These are serious sentences. This is not slap on the wrist or a year and a half or you get to keep your money. This is lock 'em up and throw away the key. And I think that that has had a huge effect on the way boards of directors and CEOs do their jobs.

WERTHEIMER: When you were at Fortune, Fortune magazine, you edited some of the most significant reporting on Enron, which I think in a lot of people's minds started this whole thing rolling; the Houston energy emperor without any clothes on. Does the federal government, do you think, have enough on the managers of Enron to send any of them to jail?

Mr. NOCERA: Oh, I think they do. Enron is a very complicated fraud with many arcane moving parts, special-purpose entities, but when you add it all up, all of these deals were intended to do one thing, which is to hide the true nature of the company from investors and the general public. And that is illegal. It's going to be a heck of a trial. I mean, it will be fun to watch in a Michael Jackson kind of way, I suspect.

WERTHEIMER: So, a good thing, Joe: Martha is out. And is she back on top?

Mr. NOCERA: Well, she is definitely my businessperson of the year, because this is one of the greatest rehabilitation stories of all time, I think. Now she only has one problem. Unbeknownst in all of this, her company still doesn't make any money.

WERTHEIMER: Our friend from the business world and The New York Times, Joe Nocera, joins us from WFCR in Amherst.

Joe, happy 2006.

Mr. NOCERA: Thank you, Linda.

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