Let Tim Cook Speak (About Business) Those who make their living from rules and more rules are muttering darkly about Apple CEO Tim Cook’s intervention in Monday’s global stock-market crash. Mr. Cook, after an email from CNBC’s Jim Cramer asking about sales in China, responded with an email of his own. Whatever was happening to their stock prices, Chinese consumers were still buying iPhones, he said, with Apple continuing to “experience strong growth for our business in China through July and August.” He added, “Obviously I can’t predict the future, but our performance so far this quarter is reassuring.” Mr. Cramer reported the news and the descent in Apple’s stock price moderated a bit—supposedly it’s a bad thing when timely and accurate information is reflected in stock prices. But Mr. Cook’s comments also had a wider significance. His was a reminder that there’s a real economy of goods and services and transactions out there, especially useful when crashing stock markets are so heavily influenced by monetary manipulations. For his useful and informative act, though, many of the media’s favorite securities lawyers want Mr. Cook hauled up before the Securities and Exchange Commission, under its Regulation FD, which seeks to control the information in stock prices from some imaginary ideal of fairness. He should be applauded. Mr. Cook lent timely evidence for the view that this week’s stock disaster was only tenuously connected to the real economy. Central banks, led by ex-Fed Chief Ben Bernanke, have held down the yield on “safe assets” for years trying to force investors into stocks. Higher prices resulted but not the good feelings and economic confidence that policy makers sought, and shares arguably needed to adjust downward for the recoveries that still aren’t happening in the U.S., Europe and Japan. Unfortunately, corporate statements tend to vary as wildly as anybody else’s, from the crunchy and informative to the deeply bogus. An example of the latter was the Apple’s statement to the New York Times last week, after the paper had decided belatedly to notice the record of Dr. Dre, the rap entrepreneur on whom Apple dumped a windfall when it bought, for $3 billion, his company Beats Electronics, a purveyor of headphones and a music streaming service, 14 months ago. The Times last week allowed that it had been collecting accounts from women that Dr. Dre had beaten up early in his career, including the well-known case of Dee Barnes, a then-Fox TV hostess on whose show rival rappers had made wisecracks at Dr. Dre’s expense. As the Times was preparing its report, Dr. Dre issued a statement not owning up to any particular assault but regretting past actions and claiming “I’m doing everything I can so I never resemble that man again.” Apple issued its own statement saying, “Dre has apologized for the mistakes he’s made in the past and he’s said that he’s not the same person that he was 25 years ago. We believe his sincerity and after working with him for a year and a half, we have every reason to believe that he has changed.” Though there is nothing funny about beating up women, this statement is hilarious because Apple certainly did not condition its purchase of Beats on Dr. Dre over the next year and a half demonstrating the sincerity of his regret for his assaults on Ms. Barnes and at least two other women. Back in the real world, Apple wanted Beats and Dr. Dre for their cultural cachet and was not about to bring up his history or make demands on him regarding it, as long as nobody else did. And nobody else did, except this column in passing when it compared Dr. Dre to Don Sterling, the L.A. Clippers owner who was simultaneously receiving his own windfall for selling the basketball team he had just disgraced with his foolish private remarks. Nor are the reasons hard to imagine. Dr. Dre is cool. Don Sterling, who complained about his girlfriend attending games with black celebrities, isn’t. Mr. Sterling is white and rich and old, and Dr. Dre has only become rich in the eyes of the media since the Beats deal (he pronounced himself the world’s first hip-hop billionaire). Probably playing a role too was some holdover of the attitude expressed by his Beats partner, the legendary producer Jimmy Iovine, who claimed back in the day that criticism of violent and misogynist gangsta rap lyrics was “racism, pure and simple.” An awful lot comes out of CEO mouths in the course of a year, especially from highly visible and fashionable companies like Apple. Some of it is bound to be claptrap, not to mention the occasional pathetic attempt to evade criticism and navigate the conformities of the day. Which brings us back to the SEC’s Regulation FD: When we limit Mr. Cook’s ability to say insightful and timely things about his business, it only increases the ratio of claptrap to useful information.
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