Proposing a Better System
Speaking to the Republican convention, President Bush sketched a second-term economic agenda that included an overhaul of the tax system and tax-free accounts to partly replace Social Security and traditional health insurance. Bush also touted expanded enterprise zones to revive economies in electorally crucial Rust Belt states. Few of the proposals were new other than tax reform, which would face stiff opposition from Democrats and special interests and might jeopardize extension of the Bush tax cuts.
Corporation as Cookie Jar?
Conrad Black and other former top officials were accused of running a "corporate kleptocracy" at Hollinger International in a committee report prepared by former Securities and Exchange Commission chairman Richard Breeden. The report accused Black of paying himself exorbitant fees and using company funds to pay for cars, vacations, parties and charitable donations. Breeden also criticized Hollinger's celebrity directors, including Henry Kissinger, Robert Strauss and Richard Perle, for their poor performance.
Theme May Be Takeover
What do Washington Redskins owner Daniel Snyder and Microsoft's Bill Gates have in common? Both are large shareholders in Six Flags, and both are unhappy enough with the performance of the theme parks that they may seek seats on the company's board of directors. Although the two high-profile investors together own about 20 percent of Six Flags shares, there is no indication they are acting in concert. Snyder could lead a drive to oust management if the company's lackluster results do not improve.
Slicing and Dicing Fees
Turning up the competition with rival Vanguard, Fidelity Investments announced it was nearly halving its fees for S&P 500 and other index funds. The move reflected a recognition by Fidelity that it could no longer rely on its actively managed funds to sustain its lead in the mutual fund sweepstakes. Fidelity will now charge a 0.1 percent annual management fee, compared with Vanguard's 0.18 percent. Vanguard, which has built its reputation on being the low-cost provider, says it won't match Fidelity -- for now.
Rising Price of Latte
Inflation watchers, take note: Starbucks announced it would raise prices for the first time in four years, although it won't say by how much. The coffee company's executives cite higher costs of milk and health insurance, but analysts say a slowing of top-line growth may also be a factor. It is unclear how sensitive the company's 30 million regular customers, who pay an average of $3.50 to $4 for each visit, are to prices. Same-store sales at Starbucks grew 8 percent last month, compared with 9 percent in August of last year.