Milken and Takeovers

My thanks to Robert A. Jones for clarifying the debate surrounding Michael Milken and the ethics of corporate takeovers ("Feeding Frenzy in the Redwoods," Part I, April 25).

It's been hard to refute the appealing argument that junk bonds provide entrepreneurs with the means to buy out ineffective companies, replace their fossilized management, shed unproductive assets, etc.

But the experience of Pacific Lumber Co. shows that Milken's methods for financing this activity do not result in a healthy renewal of the national economic body. It is, rather, a form of cancer, an uncontrolled growth that too often destroys healthy, sustainable, local economies. The result is not greater productivity, but the simple transfer of wealth from local communities to professional investors.

Milken isn't entirely to blame for this, but he deserves no sympathy from those who care about the long-term future of this nation.

JOHN L. JOHNSON

Los Angeles

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