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Maven: Big Picture Miss

A potentially major business trend in China gets overlooked, and a misguided paean to Sarb-Ox.

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The Business Press Maven's nerve endings are especially raw this morning and, as always, we can blame it on a psychopharmaceutical cocktail that doesn't mix well with coffee and the business media's ongoing inability to get to the bigger picture.

There are two big misses (and counting) in this morning's major papers alone.

The Wall Street Journal

runs "

China to Press More Firms to Unionize

," about -- well, China's push to have workers for American companies form trade unions.

The move follows the unionization of


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workers in the company's 62 stores in China. Now, the same government-backed trade group that did the impossible with Wal-Mart is focusing its agitating/long-overdue (take your pick) ambitions on





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and others.

The unionization effort, we are told, is on track to get more than half of foreign companies to unionize by the end of the year.

And the


, in dutiful business media mode, rounds up some surface quotes on whether this is good or not and whether it will happen or not. The kicker is more of a toe tap: A Wal-Mart spokesman is given space to say that the company respects its workers' wishes.

Aww. But nowhere,


, in the article is the essential long-term point in play:

The No. 1 long-term effect from this change might be wage inflation


That's the deal, yo. Whether Chinese employees of foreign companies should be unionized isn't the concern from a stockpicker's perspective. And from a business journalist's perspective, in this case you need to go further than will-they-or-won't-they; this, right here, is potentially a major economic trend.

Hear me out. Inflation has been kept in check, in large part, by cheaper foreign labor and the check that puts on wage rates in America.

If wages creep up in China as a result of unionization, profits will be hurt immediately -- and wages and inflation will pick up here in the U.S., causing more grief.

A journalist who touches on Chinese unionization without touching on American inflation going forward is doing investors no favor.

Also missing the big picture was

The New York Times


an article

in blind praise of Sarbanes-Oxley, crediting it for getting financial books in order.

A pretty bright pair in the financial world: The Business Press Maven plus this guy named Warren Buffett think that Sarbanes-Oxley, as it stands, is the biggest impediment to corporate growth in America.

That is not to say it has not done good. It has done a good deal of -- uh, good.

However, its good effects need always to be weighed against the cumbersome practices and costs it is at fault for, with the ultimate question of how a better balance can be accomplished.

In this case, the number of restatements (a measure of Sarb-Ox success) has been up.

Nevermind that the rise is generally the result of options backdating, a terrible though fluky practice that probably makes the restatement jump a one-time affair.

In the last sentence of this ode to Sarb-Ox, there is a bone thrown to complaints about the law, but there's no sense that many of those complaints are legitimate and no overall attempt to get at the truth about Sarb-Ox: it's doing some good and a lot of bad, and that mix has to be tweaked.

Speaking of a mix between good and bad, why don't we "nevermind" that a


"On the Money" feature led with

a report



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worldwide same-store sales were up 10%.

It's sales that were up 10%, but who am I to quibble with such distinctions?

I'm just kidding, of course. I would rather be locked in a dark closet with the Hamburglar than pass up the opportunity to point out such an error.

Sales are top-line growth, and same-store sales are sales comparisons in stores opened at least 13 months.

And while I'm using my verbal cutting torch on


for the benefit of investor understanding, let me also point out that the feature led with the claim that McDonald's results -- which were excellent even without


embellishment -- added "rocket fuel" to the



More on this sort of wording in my weekend column (who needs football games on television or family time when you have a Business Press Maven column to pore over?), but "rocket fuel?"

Uh, dudes, the Dow closed up a respectable but still measly 0.81%. That's

point-eight-one percent

. Rocket fuel? That's not even high-test unleaded.

I do, ironically, want to point out that the rest of the


report was quite good.

Too often, when a company like McDonald's performs well after so many years of standing in place, the business media credit one initiative -- say, the wrap. Here, it was really a confluence of changes: from the wrap to healthier food overall to coffee sales and on.

There was even a titillating mention of one McDonald's store equipped for video downloading, of all things, that delivered off-the-charts performance.

In their latest attempt to minimize what went on along


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Way, some of the accused have been peddling a storyline -- swallowed hook, line and sinker by some of the media -- that what happened was "emblematic" of the way boards fight.

NPR even


by using the word "emblematic," talking with utmost earnestness about how this board was split in two.

Puh-lease. Every board in America is split into two factions. In fact, The Business Press Maven once sat on his children's nursery school board and guess what? Besides the fact that we didn't get good options, much less backdated ones, it worked just the same. There was infighting and two factions developed. But no one side put illegally acting gumshoes on the other.

Please, avoid these attempts to make what happened typical. Put those gumshoes in your Sarb-Ox and smoke 'em.

A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children.