Best columns: Business
Equifax’s spectacular failure
The New York Times
Equifax had “just one job,” and still dropped the ball spectacularly, said Farhad Manjoo. As one of the three main credit agencies, its “only purpose” is to gather and protect millions of Americans’ most private financial data. Yet over the course of two months this spring, hackers were able to penetrate Equifax’s “spectral gauze of security” and walk away with Social Security numbers, birthdates, and more for 143 million people. “So, Equifax, I have to ask: Now that you have failed at your one job, why should you be allowed to keep doing it?” If a bank lost everyone’s money, it would be shut down. If a bookkeeper couldn’t keep track of profits and losses, he’d lose all his clients. Yet “no one is really in a position to stop Equifax from continuing to do business as usual.” There’s no real mechanism in public policy, outside of fines, to penalize a company that fails to protect our data. Regulators won’t exact a more “existential punishment,” because Equifax is deemed too important to the financial system. “But wait, it gets worse: You also can’t prevent Equifax from getting any more of your data.” It’s nearly impossible for consumers to prevent their data from being shared with the firm, and that’s not going to change. “Not every data hack deserves a corporate death penalty,” but this is one breach no company should get away with.
Why Tesla is still in business
“It’s easy to overlook how unlikely Tesla’s success is,” said Matthew DeBord. In the exceedingly competitive auto industry, upstarts tend to be eliminated swiftly, especially unprofitable ones like Tesla. Yet buoyed by founder Elon Musk’s charisma and an increasingly successful branding strategy, the company is thriving, with a $60 billion market cap and no shortage of headlines. So why has Big Auto not leveraged its financial and political clout “to beat back or eliminate” it? “The answer is simple: Tesla isn’t seen as a threat.” The 500,000 advance orders for the Model 3 were impressive, but “Tesla’s Achilles’ heel is production.” Its well-documented manufacturing issues will be a significant cap on its growth, and “a potentially ruinous burden,” given its backlog of orders. That’s not to say the auto industry does not widely admire Tesla’s innovation; it compels them to improve their own design and engineering. What’s more, Tesla is “front-running” much of the risk on electric cars. Its investors fund advances in electric technology, underwriting a kind of innovation lab the entire auto industry will eventually benefit from. GM, Ford, VW, and Toyota don’t have “to spend a dime to have Tesla do all the heavy lifting.” Considering that, “the auto industry would be crazy to get rid one of the best things that’s ever happened to the business.” ■