This Senate Finance Committee hearing set for Wednesday ,”The U.S. – China Trade Relationship: Finding a New Path Forward is timely given China’s announcement on Saturday that it was going to allow its currency to rise. The only two witnesses listed so far are Commerce Secretary Gary Locke and U.S. Trade Representative Ron Kirk.

China’s announcement certainly shook things up. On Friday, this was AFP’s lead: “OTTAWA (AFP) – – China’s controversial currency policy will be discussed at an upcoming G20 summit, a Canadian official said Friday, despite an earlier warning by Beijing not to bring up the yuan issue.”

On Sunday, AFP’s report was, “Chinese yuan under scrutiny before G20 meeting“:

BEIJING/WASHINGTON – Policymakers in the world’s major economies will closely monitor the Chinese yuan this week for signs it is actually moving after Beijing announced it would make its exchange rate more flexible.

The Group of 20 nations will meet in Canada next weekend to hash out a course for the future as the world gradually emerges from the worst financial crisis since the 1930s.

China is a member of the G20, which holds its semi-annual meeting starting Saturday in Toronto, but is NOT a member of the G8, which precedes the meeting with sessions at Muskoka in Ontario’s cottage country .

News accounts, reaction:

• AP, China lets yuan float, warns move won’t fix global economy
• Reuters, Germany welcomes Chinese move on yuan flexibility
• Channel News Asia, “No major yuan revaluation despite China’s currency reform pledge: analysts“
• Economic Times, “Renminbi appreciation won’t benefit India: Lewis Wan” (Wan is Chief Investment Officer, The Pride Group)
• Reuters, “Chinese yuan under scrutiny before G20 meeting“

Frankly, we think their problem is simply marketing. The backward “E”s confuse the buying public.

Comics aficionados will recognize the re-emergence of the themes of economic anxiety that accompanied the Depression Era origins of the Blondie strip, as Dagwood, son of millionaire industrialist J. Bolling Bumstead wooed working-class Blondie. Dagwood surrendered his inheritance to marry her, but even now, he sometimes resents his fall. (And really, an apple cider stand is only one step removed from an “Apples – 5 cents” stand.)

(Cartoon from the Seattle Post-Intelligencer.)

Charles Eames and his wife Ray are not household names, and yet their inventive genius is present in just about every household – not to mention airports, restaurants, and other public places all over the world.
They got their start during World War II creating laminated plywood splints for wounded military personnel. They were better than the metal splints that easily transmitted vibrations to wounds and fractures.

When the war ended, Charles and Ray branched out, applying what they had learned about hot-molding wood laminates to furniture design. All across the country, there was a mad scramble to build houses for returning servicemen, and all those houses needed furniture.

Charles and Ray entered a furniture design contest run by the Museum of Modern Art with a single shelled molded plywood lounge chair that was comfortable even though it had no upholstery. It was designed of soft but lasting material to fit the design of the human body. And being so simple, it was inexpensive to make, also a major plus. They won the contest.

That chair was introduced commercially in 1946 and is still being made. In its last issue of 1999, Time magazine named it the Best Design of the 20th century.

The Eames didn’t just invent creative furniture; they also invented the tooling to make it. Manufacturers just loved them and with reason. Their chairs were, and are, comfortable, simple and inexpensive.

In 1872, the famous newspaperman Horace Greeley was candidate for President for both the Democrat and Liberal Republican Parties. Trouble was, he was up against President Ulysses Grant of Civil War fame, one of the most popular Presidents ever.

Greeley was 60 years old and in declining health. His wife was on her deathbed. He wrote a friend, “I wish she were to be laid in her grave next week, and I to follow her the week after.”

On October 30 Molly Greeley died. Greeley wrote to his friend again, “I am not dead, but I wish I were. My house is desolate, my future dark, my heart a stone.”

Grant was re-elected in a landslide. Greeley carried only six states. The distraught man, his mind going, had to be institutionalized. On November 29, three weeks after the election, Greeley died.

When the electoral college met in December, three electors from Georgia insisted on voting for Greeley even though he was dead. But Congress refused to count their votes.

So poor Horace Greeley, in less than a month, lost his wife, the presidency, his mind and then his life. He was the only major presidential candidate to receive no electoral votes.

And you think you had a bad day.

One of the toughest guys in the history of American industry was Henry Clay Frick who was a partner of Andrew Carnegie in building the domestic steel industry. Like Carnegie, Frick was a little guy, born to grinding poverty who worked his way to the top with sagacity and fierce determination.

He got started borrowing money from a relative to buy some coal seams and a coke plant. When the market dropped through the floor in 1873, he used the opportunity to buy new coke plants that were idle. When the market recovered, he was off and running big time.

He did quality work and had a gift for efficiency, whipping a disparate group of miners, coke operations and shippers into a disciplined machine. In 1882, he merged his operations with Carnegie’s, bought out rivals and built up the Union Railroad to connect his various operations.

Frick was the tough guy in the 1892 Homestead strike that led to a shootout in which seven striking workers and three guards were killed. This incident, a shameful episode in the history of American industry, led to a rift between Frick and Carnegie.

It led also to an assassination attempt in which Frick was shot twice and stabbed three times. He fought off his attacker and refused an anesthetic while a doctor probed for the bullets — so he could keep working. Manufacturing is not for sissies.

Like Carnegie, Frick left his vast fortune to charity, mostly educational causes.

Back in 1954, Ray Kroc was a 52 year old milkshake machine salesman on his way to visit clients in San Bernardino, about 55 miles east of Los Angeles, where he experienced what can only be termed a true creative vision.

His clients were a couple of guys named McDonald who operated a squeaky clean restaurant churning out hamburgers, fries, shakes – nine menu items in all – for rock bottom prices. Kroc saw the future then and there. “I felt like some latter day Newton who’d just had an Idaho potato caromed off his skull,” he said later.

He talked the McDonalds brothers into letting him franchise their concept, though they were highly skeptical. He set out to replicate their restaurant and its products carefully, making sure every franchise was just like every other franchise.

But it didn’t come easy. Kroc’s original franchise plan made money for the franchises, but very little for Kroc. He resolved his dilemma by going into real estate – buying or leasing store sites and then subleasing them to franchisees at inflated prices. By controlling the leases, he also controlled his managers and their products. He was able to set up a nationwide hamburger assembly line.

In 1984, Ray Kroc died at 81, just a few months before McDonald’s sold its 50 billionth hamburger. A year later, when the value of McDonalds $4 billion real estate portfolio passed Sears, the New York Stock Exchange added McDonalds to the Dow.

If there is one trend that stands out in case studies of successful CEOs, it is that most of them spend time in blind alleys before they get to the executive suite.

Michael Ruettgers is a typical example. An indifferent student at the University of California, he spent most of his time at the beach or playing bridge. Cal sent him packing.

He got the message. He finally got a college degree and went on to Harvard Business School.

Fast forward to the late ‘80s. Ruettgers is executive vice president of EMC, a computer storage company that was on the ropes. The company was trying to stay afloat after shipping faulty products to customers.

Ruettgers met the challenge head on. The company guaranteed replacements even if the product was working just fine. It was a near run thing. The company, which was doing $123 million in sales, went through all but about $3 million of its bank loans to stay in business.

Ruettgers earned a reputation as a tough, aggressive competitor. By the mid-1990s, EMC had knocked of IBM as the number one provider of high end storage.

He made bets on new markets and acquisitions throughout that time. Ignoring doubters, he pushed storage boxes into non-mainframe servers, connecting to different types of servers. Soon that market made up more than half of EMC sales. Today, EMC’s market capitalization is more than $30 billion.

We live in a world of marvelous products that make our lives immeasurably easier and more enjoyable, and usually we don’t give them a second thought.

Take for example – cellophane – that wonderful clear, clinging plastic that is found in every kitchen, and lots of other places. It did not spring into being of its own accord, and it doesn’t grow on trees.

Actually, cellophane was invented about a century ago by a Swiss chemist and textile engineer named Jacques Edwin Brandenberger. He was seated at a restaurant in Paris in 1900 when he saw a patron spill a bottle of red wine on a pristine white tablecloth. He decided to develop a way to make such fabrics impervious to wine, and other stains.

He never did, but one of his failed experiments left him with a plastic coating that kept sloughing off the cloth in big sheets of thin, transparent film. Brandenberg decided this film had potential and spent almost 10 years designing a machine to make it. Voila! Cellophane.

In 1912 he formed a company, La Cellophane, combining the words “cello” from cellulose with “phane” from the French word diphane meaning transparent. In 1923, he cut a deal with Du Pont to make and distribute the new material throughout North and South America.

George Hearst was 26 years old when he inherited his father’s debt-ridden farm in Missouri in 1846. But he noticed some people nearby were making money with a lead mine. Hearst could barely read, but he got some books on geology and became an expert.

When the California gold rush got underway, Hearst was ready. Perhaps because he knew what he was doing, he found gold – lots of it. By 1857, he had developed his first large scale mine, the LeCompton near Nevada City, California. He took profits from there to the Comstock Lode in the state of Nevada where miners were taking the gold from black ore and throwing the silver away. Hearst focused on the silver.

Hearst was also focused on efficiency and he turned the Comstock into a showpiece of cutting-edge mining technology. Later he went to San Francisco and made more money in real estate. He made even more money as a consultant to various mining interests. And then hit paydirt again at a mine in Utah.

Hearst got interested in politics, and eventually served as a Senator from California. He died in office leaving his widow and son filthy rich.

The TV show “Deadwood” on HBO portrayed Hearst as an evil robber baron who had people shot right and left. The real Hearst was tough, all right, but he was all business. When he had a problem, he called in lawyers, not gunfighters. The results were the same.

Probably few people ever had more influence on the American marketplace than Philadelphia’s own John Wanamaker.

Born in 1838, Wanamaker pioneered the concept we know today as the department store. You may have thought they dated back to the Garden of Eden, but it all began in the 1870s. Along with his brother in law Nathan Brown, Wanamaker opened a multi-purpose clothing and specialties store – called Wanamaker’s — in an abandoned railroad depot in Philly.

He went after an upscale market and promised all wool clothing and money back guarantees – radical concepts at the time. He printed the first ever copyright store advertisements. When people discovered that its promises were true, his reputation was made.
I know half my advertising money is wasted, Wanamaker said. Trouble is, I don’t know which half.

Wanamaker just kept innovating: the first in-store restaurant, the first electric lights in a store, the first elevator, the first White Sale. He worked constantly to keep quality high and prices low. People like that sort of thing.

In 1911, Wanamaker expanded the Philly store, featuring a 150 foot high Grand Court with the world’s second largest organ and a great eagle from the 1903 World’s Fair.

Wanamaker’s store became more than a store. It was a place where people went to see and be seen, rather like the malls of today.

And it all started with John Wanamaker