Pope Protest 2010

June 7, 2013

Photo from the pope protest, London, 2010. With my friend Ben Fowler:

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I feel more hopeful about the new pope.

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Photos from Mumbai

June 26, 2012

I wrote a story today about a business school in Mumbai that sends its MBA students to help out in the nearby slums. The idea is to mentor schoolchildren, while teaching the students about the need for humility and thankfulness. Just thought I would put up some pictures. The first is of the room where one of the schoolchildren (Chandrakala) lives with her mother and brother. The second shows the disgusting sewer out of the back. The third is Chandrakala with yours truly discussing the program.

I’ll be writing a lot more about business schools in India and elsewhere in future articles, and in my forthcoming e-book Adventures in MBA World. Not all the coverage shows b-schools in such positive light.

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Story I did for Yale e360 about the insurance industry and climate change:

Insurers are central to how we deal, or don’t deal, with climate change. They price the risk facing property owners, and others, from weather events — effectively sending a signal to the rest of the economy about how seriously to take the threat. And with $23 trillion in global investments, insurers are also systemically important. If these companies fail to properly account for the risks they face from climate change, they could become financially vulnerable, with serious repercussions for the global economy.

As the Ceres report puts it: “With the world still reeling from the devastating impacts of an economic crisis triggered by hidden risks in the banking sector, we can ill afford a new problem triggered by hidden risks in another.”

The report revealed a growing divide between U.S insurers and their European counterparts, who have been some of the strongest business advocates for taking action to slow global warming. European insurance executives also have been critical of the U.S industry for not being more proactive.

“It is frustrating to see that it’s so extremely difficult to include this huge risk of climate change into current business,” says Andreas Spiegel, senior climate change adviser at Swiss Re, a large reinsurance company. “There is a bit of a short-term view on the benefits, risks, and costs.”

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Mishkin, Hubbard, et al.

April 2, 2012

If you’ve seen Inside Job, you might remember these moments:

Here’s a short, and not very exciting, article I wrote for the FT about the ripple-effect at US business schools:

“It was a big topic of conversation around here,” says Ingo Walter, vice-dean of faculty at NYU Stern.

Michael Gibbons, Wharton’s deputy dean, says: “I think all of us became much more sensitive about this when we saw the movie.”

The Oscar-winning documentary Inside Job ruffled many feathers with its analysis of the financial crisis – not least at US business schools.

The film criticised several leading professors for failing to disclose outside economic relationships. Consequently, in recent months, many schools have been reviewing their disclosure policies, hoping to avoid further embarrassment.

How widespread is the problem of academics writing partial, paid-for research, and failing to disclose the fact? As far as I can see, not very. Despite the impression created by the film, there were never hordes of highly-credentialed economists taking lucre, and not telling anyone about it. And there are fewer now. Since Inside Job, many b-schools have changed their rules, the American Economics Association has adopted new guidelines, and many profs are more diligent, individually, about disclosure.

The more important issue, though, isn’t about disclosure; it’s what’s in plain sight. It is why so many top economists and financial experts think they way they do, and why certain key ideas about finance and economics prevail, even in the face of crippling counter-evidence (e.g., the financial crisis).

We can’t say for sure exactly what motivates people a certain way. But we do know there have been disproportionate opportunities for “free-market thinkers” in the last few years, including seats on boards, seats on legislative committees, and seats heading important b-schools. Glenn Hubbard, formerly an official in the Bush Admin., and now an adviser to the Romney campaign, is dean of Columbia Business School. How many corresponding left-wing economist-deans, do you know? Probably, there aren’t many.

There are lots of economists at US universities who think our system of lax regulation, too-powerful financial sector, and pre-eminent shareholder capitalism, is a problem. And they are more organised than they used to be (see here). But they tend not to be the people in charge. Until that changes, we are going to struggle to change anything very fundamentally.

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I wrote an article for the Guardian about plastics:

Plastic accounts for four-fifths of the accumulated garbage in the world’s oceans, says the United Nations. And, perhaps most insidious of all, the debris is broken down by waves and sunlight into a sort of “soup” that fish and other wildlife mistake for food.

This much is known. The question is, what can we do about it?

Doug Woodring, a campaigner in Hong Kong, says one answer is to bring greater accountability to the use of plastics. He is asking companies, and other major plastic consumers, to disclose how much plastic they are using, in the hope that measuring is the first step to minimising, re-using, and finding alternatives.

His Plastic Disclosure Project, launched last October, aims to emulate the success of the Carbon Disclosure Project, which now counts more than 3,000 organisations as members and is widely credited with driving carbon reductions at a company level. More broadly, he is trying to establish the concept of a “plastics footprint” alongside the carbon footprint, and more recently, the water footprint.

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For-profit ed

February 20, 2012

My FT piece today about the growth of US for-profit education:

But while some view this as a story of widening access and opportunity, others are not so sanguine. Critics point to complaints on internet sites, the testimony of ex-students at various Senate hearings, or evidence gathered by state attorneys. To the industry’s detractors, such material reveals a pattern of excruciating student debt, aggressive recruiting and marketing and less-than-stellar academic standards. They note that for-profit colleges account for 47 per cent of student loan defaults, implying an imbalance between tuition cost and subsequent earning power.

“Over the decades, the sector has taken a fairly clear mandate to prepare people for gainful employment, and twisted it by offering completely worthless programmes,” says Barmak Nassirian, associate executive director at the American Association of Collegiate Registrars and Admissions Officers.

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Mitt’s number

January 19, 2012

Cross-post from the New Statesman’s US politics blog:

The big news from the campaign trail today is a number: Mitt Romney’s “effective” tax rate. At an event in South Carolina yesterday, Mitt finally conceded (after weeks of probing) that he pays “probably closer to the 15 per cent rate than anything”, putting him firmly in the 1 per cent, and firmly in the sights of people who want to change the tax system.

Mitt’s rate is so low because most of his income is from capital gains, which is taxed more generously than other income. A Republican Congress cut the rate from 28 to 20 per cent in 1997, then to 15 per cent in 2001. Thus, the US has a fairly progressive employment tax system, where people pay more as they earn more, but a regressive effective one, where private equity windfalls and stock market profits get special treatment.

Warren Buffett, the legendary “Sage of Omaha”, has famously called it iniquitous that he pays less tax, in percentage terms, than his secretary, or, as he wrote in the New York Times last year, the “other 20 people in our office” (whose rates range from 33 to 41 per cent). Barack Obama has tried to promote a “Buffett Rule” – a minimum tax rate for those earning more than $1 million a year. But both have gained little traction outside the progressive press, and the Occupy Wall Street protests. The question now is whether Romney’s number will add any grist to the debate.

Commentators yesterday speculated on the timing of Romney’s words. The conventional wisdom is that it is better for him to talk about his finances now, while he is doing well in the polls, and the real election is still months away. But it’s also possible the admission will plant a seed that will grow and grow under careful cultivation from the Democrats, and sections of the media. Obama is already planning to make inequality a main focus of his rhetoric, hoping to channel some of the OWS anger. An opponent who pays less tax than most of the population could be a perfect foil.

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Take a look at the film that could change the 2012 presidential election, a “documentary” looking at Mitt Romney’s career at Bain Capital, the private equity firm he founded. It has been bought by Newt Gingrich’s PAC, Winning Our Future, and is about to be shown all over South Carolina, the next primary state.

The film attacks the main rationale for Romney’s candidacy – that he’s an experienced job-creator who “knows” how the economy works. And I’d say it’s pretty effective. A lot of voters are going to identify with the people who lost their jobs. They’re not going to shrug and say “well, that’s capitalism, it’s tough sometimes”, which is Romney’s response. This feels like the “swift-boating” Kerry received from Bush early in the 2004 campaign, except it’s coming from Romney’s own party. It definitely shows Newt’s bitter side (following Romney’s attack ads in New Hampshire). But it could also presage a different type of debate about capitalism in the election. In the past, the Republicans have simply said they are in favor of capitalism and free markets, and offered little distinction between creative and destructive strains. In his own way, for whatever reason, this is a mainstream Republican candidate saying there are differences in the way companies behave – they are not all the same. It’s going to be interesting to see if Romney sticks with his “my opponents hate capitalism” line, or whether he is forced to debate what sorts of capitalism he is in favor of, and which he disavows. Hopefully an actual debate might follow.

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Notes from NH

January 12, 2012

I spent a couple days in New Hampshire for the primaries, my first experience of the campaign trail, or NH. Here are a few impressions, in no order:

1– It’s harder to dislike candidates when you see them close-up, and harder to disagree with them. I found myself nodding in agreement with Rick Santorum several times; hard to imagine I would do that watching him on TV. Strange how someone can seem so nice (he wears these cuddly sleeveless sweaters) – yet have such dangerous views, bigoted views.

2– It’s hokey-cokey to say, but people in New Hampshire take their politics seriously, even passionately. I imagined that after weeks of leafleting and canvassing, most NHers would be jaded by now. But everywhere I went – coffee shops, convenience stores, hotels, bars – people were talking candidates, positions, and tactics. Hard to imagine the equivalent in, say, some rural area of the UK. File under: enduring American patriotism, optimism, etc.

3– NH is beautiful. Beautiful, beautiful, beautiful.

4– The only interesting question as far as the primaries: what Ron Paul does. Romney is going to win, because he’s the best candidate (as in best funded, organized, prepared). The rest will drop out sooner or later, having no further impact. Ron Paul’s influence will go on, though, especially if he runs as a third candidate. Speaking to his supporters at the post-poll party on Tuesday night, it seemed unlikely they would get behind an establishment candidate like Romney, or concede that their views are marginal to the general election. They believe they are saving the republic, and they absolutely adore Paul. How can they back down when there’s so much at stake? If he is a third candidate, that would surely scramble Romney’s chances, but potentially put a dent in Obama’s numbers too. Cliche but true: disaffected voters on Left and Right have a lot in common. And there’s a lot in Paul’s program, particularly around the GWOT and civil liberties, that former Obamaites can support (see recent Glenn Greenwald).

5– ‘Live Free or Die’ is a pretty weird motto for a state. Apparently it was coined during the Revolutionary War by a hero called General John Stark, then taken up by the state’s legislature during the Second World War. Now it’s supposed to have something to do with low taxes, and minimal regulation, at least according to the Republicans (which equate freedom to a lack of government). That NH still has the motto, and are proud of it, points to the sense that NHers feel the fight is ongoing: the war for freedom is endless, and wasn’t settled with the modern arrangements of the US.

6– It’s all about the media, but the media don’t acknowledge it. I don’t have statistics, but I bet the campaigns spend as much time persuading the media they are doing well, as trying to do well. The media have a enormous role in deciding who’s up and down; at several events, there seemed to be more journalists than actual citizens; their views go in cycles; and they have a pack mentality. A story in a major paper is a major campaign event, yet the story doesn’t acknowledge its own role, keeping up the charade that it is simply reporting on what’s going on out there. All very “meta”, etc.

7– The media have an interest in keeping the race tight, because a tight race is good for business. How much was the rise and fall of Bachmann/Perry/Cain/Gingrich/Santorum as contenders to Romney driven by the media’s need for some kind of contest? In the end, NH followed a predictable and typical script where the favorite ended up winning. How much of what happened in between was genuine fluctuations in support, and how much was the result of the media in some sense orchestrating fluctuations, so they had something to report on? I’m not saying it’s completely willful. But the media has an interest, and it is tended to, somehow.

8– Primaries are great for local economies. The guy at J Dubs coffee house in Manchester said his business was booming, and that he wished the primary could happen on all the time. Where would the main streets of Concord or Exeter be without elections every four years? More here.

9– Favourite quote: Ann Romney at McKelvie Intermediate School in Bedford on Monday, recounting the conversation she’d had with her husband on whether to run: “I only had one question: Can you turn America around? And he said: yes.” Somewhere between the end of “around” and “he said”, I remember thinking: “She’s not really going to say that, is she?” But she did. It’s the sort of thing that grates an Englishman: the shamelessness of it, the untruth: everyone knows Romney has been running since he lost last time. The Romneys didn’t decide last year, as Ann said.

10– Romney appears plastic and wooden on TV, but human in person – worryingly so for Obama. That’s dangerous for Obama, because if Romney can “connect” with voters, he might win. The best chance for the Democrats is paint Romney as a Kerry or Gore: the son of privilege, and out of touch. Also, supporters genuinely like Romney, maybe not to the same degree or volume as they like Paul or Obama, but enough. Their support is emotional, as well as reverential.

(Image: dougtone)

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2012 predictions

January 8, 2012

My predictions for 2012:

1) A China crash. China looks like Japan in the late-80s. There’s been a massive rise in real estate prices, and freely flowing credit. Even the country’s leaders admit there’s a bubble, and even China’s cheerleaders admit the official numbers are suspect. The argument is over whether those leaders can manage the downturn. Are they superhuman? Probably not. I’m not saying that China won’t become the world’s largest economy, eventually. I just don’t think its rise will go in a straight line. See Paul Krugman recent column.

2) Obama re-elected. Yes, his approval ratings are at dangerous levels for an incumbent. But the economy is what matters, and it’s on the upswing. Obama still has a lot of fans – we just don’t hear from them – and the Republican challenger will have a divided party. If it is Romney, his main argument will be that you need a business-person to run the economy. But do people really like business people like Romney that much (he was a private equity manager who laid off a lot of people)? Most of all, Romney is fundamentally unlikeable, and unlikeable people don’t become president. The media will help to keep things tight, but Obama will win – with a landslide.

3) Manufacturing repatriated. We’ll start to see some of the manufacturing that we exported to Asia and elsewhere start to come back again. A few reasons: rising wages in Asia, falling wages at home; increasing worries about “just in time” supply chains and supply shocks; rising fuel and transportation costs. For more, see this report from Boston Consulting Group.

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