In his “Stories I’d like to see” column, journalist and entrepreneur Steven Brill spotlights topics that, in his opinion, have received insufficient media attention. This article was originally published on Reuters.com.
1. Cigarette companies’ final days:
This article last week from the Associated Press, “U.S. health experts predict…a cigarette-free America,” highlighted the release of a 900-page report on smoking from the US surgeon general. “Though the goal of a cigarette-free America has long seemed like a pipe dream,” the AP noted, “public-health leaders have started throwing around phrases like ‘endgame’ and ‘tobacco-free generation.’”
Smoking has declined significantly in the United States in the five decades since the surgeon general’s first report pinpointing the dangers of cigarettes. It is still a multibillion-dollar industry, however, that sells more than 300 billion cigarettes a year here.
Yet smoking rates continue to decline as the evidence of tobacco’s lethal effects becomes accepted wisdom. At the same time, venues forbidding smoking have become nearly universal, even as the sale of smoking products becomes more constricted. CVS’s decision two weeks ago to stop selling tobacco is the latest example. (I wrote about that here.) Several states are now considering raising the legal age for buying cigarettes to 21.
So, how is the industry fighting — or preparing for — that endgame?
How quickly are the big three players — Philip Morris, Reynolds American, and Lorillard — diversifying by betting on e-cigarettes? And what are the real prospects for those products, as well as the related health issues?
Are the big tobacco companies diversifying completely into other industries?
Are they having better luck with the core product abroad? If so, how and why?
The potentially juiciest part of the story might be that they are moving to diversify into another smoking product that’s been in the news a lot lately: marijuana. Tobacco companies going into pot (presaged by the Showtime series Weeds) seems a logical move, but not one that these Fortune 500 companies would be talking about much because pot is still illegal in most of the country.
So is this shift quietly in the works?
Are consulting companies, like McKinsey and Company, Bain and Company, or Booz and Company, now helping tobacco companies figure out a way to turn themselves around? Has McKinsey come up with a PowerPoint presentation that maps out a pot plan?
Are these blue-chip consultants even willing to work for an industry that the Centers for Disease Control says is responsible for more than 480,000 deaths a year and hundreds of billions in healthcare costs? (Aficionados of another Showtime series about consulting firms, House of Lies, will find that question absurd.)
Meantime, why would anyone invest in an industry whose terminal illness seems to be as obvious as the fate inflicted on so many of its customers? Why would anyone who has other options want to work there? So what’s it like recruiting for management jobs on campus? Have the companies given up trying? Or are they whispering that e-cigarettes, or even pot, is the next big thing?
For the last 50 years, the tobacco companies — through their lobbyists, their public relations campaigns, and their advertising — have shown anything but a willingness to throw in the towel. Their continuing profits still provide the resources and motivation to escape the AP story’s verdict on their fate.
So, what’s their plan?
2. Why is high-speed trading allowed?
This Wall Street Journal story last Tuesday detailed how high-speed stock traders are now looking to laser technology to execute trades “at the speed of light,” because “nanoseconds — billionths of a second — can spell the difference between profit and loss in their algorithm-driven trades.”
It’s a good piece of reporting. But it left me wondering why we allow this kind of high-speed trading, where a nanosecond technology advantage is what wins the day rather than old-fashioned market acumen, and where the original purpose of a stock exchange — to provide a fair, open market for equity capital — seems pushed to the side.
So, I’d like to see a story exploring the pros and cons of high-speed, computerized trading. I don’t know enough to be against it, but I am wondering what purpose it serves other than allowing lots of people to make and lose money at a high-tech casino. Doesn’t it create all kinds of undesirable market volatility? Do the inevitable tech glitches mean risks to the markets and investors that would otherwise be avoided?
Should high-speed computerized trading be banned? What would be the downside?
Would a ban or limit even be possible?
What form would a ban take? How would high-speed trading be defined? Suppose we required that no stock or other market position could be bought and sold within, say, a half hour? Has something like that ever been considered?
Maybe it’s a terrible idea. But I wish someone would tell us why.
3. How rich is Ringo?
I’m a sucker for stories about how rich celebrities handle their money. So watching Ringo Starr perform with Paul McCartney for the 50th anniversary of the Beatles’ appearance on the Ed Sullivan Show made me wonder if he’s still as rich as he obviously was when the band’s songs dominated the charts.
McCartney clearly has continued to have a prosperous career through the five decades since the Sullivan show. But Starr, while probably the world’s richest drummer, has not seemed to have thrived nearly as much. It’s never been clear to me if the Beatles’ drummer owned the same share of the rights to their music.
So, it would be fun to see a story on how Starr’s fortune has held up.