Microsoft reported its quarterly “better than expected” profits. The numbers were surprising only to people who haven’t been clued into a cynical game of charades played every three months by Microsoft, Wall Street analysts and journalists.
Here’s how it goes, almost without exception. Microsoft gives what it calls guidance to the analysts, who then put out reports predicting the company’s earnings, which are routinely “higher than expected,” according to an equally compliant financial press that plays along with the charade. It would be useful if journalists actually looked up their stories from prior quarters and noticed some oddly similar circumstances.
Microsoft isn’t the only company that does this. Yahoo’s quarterly routine is pretty much identical, for example, with numbers surpassing the alleged expectations. Exceeding so-called expectations is becoming crucial for high-growth tech companies.
I guess some things haven’t changed in the year 2000.
Straight Talk and Intellectual Dishonesty
As expected, U.S. Sen. John McCain, the Arizona Republican who’s leading the polls in the run-up to New Hampshire’s presidential primary, called for a permanent ban on Internet taxes. It’s a perfect position in tax-phobic New Hampshire, but it’s lousy public policy.
McCain’s logic on this issue is alluring, but ultimately dishonest. He notes, accurately, that state and local tax revenues are going up while Internet-based commerce and information technology in general are soaring.
But he sees no problem in giving one kind of merchant an unfair advantage over another. And he absolutely refuses to make the connection between extending a ban on Internet sales taxes and an inevitable undermining of local merchants, and ultimately the erosion of the tax base in many places.
The business cycle hasn’t disappeared. As he hinted to a Nashua, N.H., audience this morning, fiscal deficits may return as a political issue. When the next recession hits and many if not most retail sales have gone online, a crunch will occur.
But McCain doesn’t want to discuss that. Nor does he want to discuss the possibility that his proposal would pre-empt state taxes across the nation — quite a stretch for a candidate who talks about states’ rights. (McCain’s Washington staff isn’t entirely clear on this point, but aides told me the ban wouldn’t necessarily preempt state laws.)
Reporters on the campaign bus, the so-called “Straight Talk Express,” tried repeatedly to get McCain to discuss details on how a permanent Internet tax ban would work. He refused, saying again and again, “It would be a permanent ban on Internet taxes.”
You can’t blame him. New Hampshire is his for the taking, and he’s taking no chances at this point.
McCain is an exceedingly attractive candidate, moreover. He has earned people’s respect. He takes actual stands on tough issues. But not always. On this exceedingly complex matter, McCain is offering mere slogans, not straight talk.