Recently I've been seeing many facebook posts about a video describing the very lopsided distribution of wealth and income in the United States. The video is actually a year old but it has been given a new lease on life by upworthy and, at the time of this post, has more than 10,000,000 views.
The basic arguments of the video are:
* The US has very unequal distribution of wealth and income.
* Over time, wealth and income distribution is becoming more unequal.
* Most Americans aren't aware of how unequal and increasingly unequal wealth and income are in the US and they would prefer them to be more equitably distributed.
This has made for some good and spirited discussion among my friends. Many of my socialist-leaning European friends believe that it's a great travesty and that Americans are either ignorant about it happening or wrong in willfully letting it happen. Many of my libertarian-leaning American friends believe that it's a right and natural outcome of a meritocratic free market.
Regardless of the video and the data sources and the definitions it uses, I'm glad it has stimulated this discussion because it's not something I've really thought much about before. It leaves me with several questions:
* Is US wealth and income distribution as inequitable as the video makes it seem?
* How does the US compare with other countries? (The US looks OK in this World Bank data.)
* What should the US wealth and income distribution look like - and why?
* Is this even the right question? I've seen it argued that wealth and income mobility (the ability for someone in one group to move up to another group) is more important than a snaptshot or trend of distribution. This resonates with me as it seems to align with the American dream: that anyone, no matter where he comes from or what he has today, can make it big tomorrow.
* If mobility is the right metric to focus on, how does the US stack up there? (Not too well, it would seem from this Wikipedia article.)
* Or are there other metrics we should look at for an ideal future state and work backward from there?
* If indeed the US is out of whack with regard to the metrics we claim to hold dear, why is that so? And what can or should be done about it? What other approaches exist and what would be their tradeoffs?
What do you think about these issues? I don't have any conclusions of my own yet as I'm just starting to consider them.
Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts
2013-10-22
2008-03-05
It's Snowing!!!!
As it has been so sunny and warm the past few weeks, you can imagine my surprise when I woke up this morning to . . . SNOW! As is my usual routine, I opened my curtains to see how the mountains looked as the sun began peeking up over the horizon. However, there was no sun and there were no mountains. Instead there was limited visibility and a lot of white stuff flying around. Having lived in Houston for the past 10 years, I had almost forgotten what it looked like, but there was no mistaking it; it was snowing.
Although the sun eventually made a foreceful appearance, preventing any snow from really sticking, the flurries were beautiful and lasted well into the afternoon. While I would have preferred to take the opportunity to practice eXtreme Ping Pong, IMD's class schedule had plenty to offer as well. Last week's end of Industry and Company Analysis / Economics gave way to a new class, which started today: Innovation and Product Design. Taught by American professor David Robertson, this course is all about innovation at every level of an organization: product, process, business model, etc. Its goals are two-fold: 1. to teach us how to innovate ourselves, and 2. to teach us how to manage innovation and create a corporate culture that fosters creativity. Our first class was very interesting and focused on individual class members' experiences in innovation/design. We won't meet again for a while but come April we will begin competing in a school-wide innovation competition--fun!
This afternoon featured an interesting Finance class. Instead of sitting in the amphitheater trying to absorb formula after formula, we took part in a team-based exercise. Half of our study groups were companies seeking debt financing while the other half were banks looking to lend. Each bank was set up with a company and was given a time limit to reach a deal that worked well for both parties. If no such deal was reached, companies could go to the market and see if other banks would offer them more favorable terms.
My group (bbb7) was paired with our nextdoor neighbors (Magic 8), who were prepared, reasonable, and committed to finding a mutually agreeable deal. Although our ultimate loan package was a little unorthodox, both parties were happy with the terms by the end of the day. We celebrated together with shots of Slovakian liqueur and headed home to rest up before tomorrow's Integrative Exercise.
Pictures of both snow and deal celebration are in my March FaceBook album.
Although the sun eventually made a foreceful appearance, preventing any snow from really sticking, the flurries were beautiful and lasted well into the afternoon. While I would have preferred to take the opportunity to practice eXtreme Ping Pong, IMD's class schedule had plenty to offer as well. Last week's end of Industry and Company Analysis / Economics gave way to a new class, which started today: Innovation and Product Design. Taught by American professor David Robertson, this course is all about innovation at every level of an organization: product, process, business model, etc. Its goals are two-fold: 1. to teach us how to innovate ourselves, and 2. to teach us how to manage innovation and create a corporate culture that fosters creativity. Our first class was very interesting and focused on individual class members' experiences in innovation/design. We won't meet again for a while but come April we will begin competing in a school-wide innovation competition--fun!
This afternoon featured an interesting Finance class. Instead of sitting in the amphitheater trying to absorb formula after formula, we took part in a team-based exercise. Half of our study groups were companies seeking debt financing while the other half were banks looking to lend. Each bank was set up with a company and was given a time limit to reach a deal that worked well for both parties. If no such deal was reached, companies could go to the market and see if other banks would offer them more favorable terms.
My group (bbb7) was paired with our nextdoor neighbors (Magic 8), who were prepared, reasonable, and committed to finding a mutually agreeable deal. Although our ultimate loan package was a little unorthodox, both parties were happy with the terms by the end of the day. We celebrated together with shots of Slovakian liqueur and headed home to rest up before tomorrow's Integrative Exercise.
Pictures of both snow and deal celebration are in my March FaceBook album.
2008-02-29
Everything's Bigger in Texas!
Today was a day of mixed emotions. It was our last day of ICA/E and the last day of the month. It's hard to believe that we've come far enough to have completed one of our courses already! That is one of the side effects of such an intense program; just blink and time has flown by. I'm glad to have completed ICA/E but we will all miss Ralf. The entire class pitched in and bought him a parting gift with which he seemed very pleased. Fortunately it's a small campus so we'll still see him around.
The last day of the month means that we all have new seating assignments starting on Monday. During January I was between a German and a Brazilian. During February I was on the end of a row beside Victor, from Peru. He and I had a great time together and I will miss his witty commentary next month. As a show of support for each other we wore similar t-shirts to class today. He wore a red España Toros shirt while I wore a red Houston Texans (Thanks, Stacy!) shirt. Together we were Los Hermanos del Toro Rojo (The Last Unicorn, anyone?); pictures will be posted on FaceBook soon.
During our discussion of sustainability economics, Ralf made the point that Americans were very wasteful. He noted first that someone in the third world will generate, on average, 149 times his bodyweight in waste during the course of his life. A European will generate over 1,000 times his bodyweight. An American, on the other hand, will generate almost 4,000 times his bodyweight. Then he remarked, "And look at Bryan; Americans are getting bigger all the time." Little did he know that no higher compliment could be paid to a member of the UMC--AH!
We finished the day with a Lebanese dinner organized by Zina and Ziad, our two Lebanese classmates. Ziad, a former professional basketball player, has been incredibly gracious in helping me learn more about my Syrian/Lebanese heritage. The dinner was wonderful; everyone was there including students, partners, faculty, and staff. I'm just sad I had to take off so soon!
There is a lot to do this weekend in preparation for classes, career services, and our first hardcore integrated exercise next week. My plan is to start the preparation on a good night's sleep--a rare luxury around here.
The last day of the month means that we all have new seating assignments starting on Monday. During January I was between a German and a Brazilian. During February I was on the end of a row beside Victor, from Peru. He and I had a great time together and I will miss his witty commentary next month. As a show of support for each other we wore similar t-shirts to class today. He wore a red España Toros shirt while I wore a red Houston Texans (Thanks, Stacy!) shirt. Together we were Los Hermanos del Toro Rojo (The Last Unicorn, anyone?); pictures will be posted on FaceBook soon.
During our discussion of sustainability economics, Ralf made the point that Americans were very wasteful. He noted first that someone in the third world will generate, on average, 149 times his bodyweight in waste during the course of his life. A European will generate over 1,000 times his bodyweight. An American, on the other hand, will generate almost 4,000 times his bodyweight. Then he remarked, "And look at Bryan; Americans are getting bigger all the time." Little did he know that no higher compliment could be paid to a member of the UMC--AH!
We finished the day with a Lebanese dinner organized by Zina and Ziad, our two Lebanese classmates. Ziad, a former professional basketball player, has been incredibly gracious in helping me learn more about my Syrian/Lebanese heritage. The dinner was wonderful; everyone was there including students, partners, faculty, and staff. I'm just sad I had to take off so soon!
There is a lot to do this weekend in preparation for classes, career services, and our first hardcore integrated exercise next week. My plan is to start the preparation on a good night's sleep--a rare luxury around here.
2008-02-28
Sustainability
I'm not sure if it is intentional or not (I suspect it is, as every part of this program has been planned out in excruciating detail.) but over the past two weeks our courses have taken on a sustainability theme.
In Entrepreneurship we have been studying cases of social entrepreneurs, startups that help people and/or the environment while still generating profits. In our presentation skills workshop, one group presented, received feedback, and then re-presented a new system for measuring the net social value added to society by businesses. In POM we have studied how one of the world's largest power companies was able to develop and implement a social responsibility plan with very little time and budgetary requirement. Tomorrow in Economics we will analyze the economics of trade, development, and sustainability.
It's great the way it all comes together from several different angles. Because this is a general management program it is important for us to understand how a key goal (in this case, social responsibility) can be accomplished by different business functions--individually or all together.
Furthermore it is gratifying to me personally that IMD emphasizes sustainability. As anyone who has read my first blog entry will know, sustainability is very important to me and I'm pleased that this program does more than pay it lip service. I can see on their faces that there is very genuine interest and inspiration in my classmates too. We are not here just to learn how to "get rich." We are here to learn how to be more effective at making the world a better place. It's a hell of a challenge, but it is worth it.
In Entrepreneurship we have been studying cases of social entrepreneurs, startups that help people and/or the environment while still generating profits. In our presentation skills workshop, one group presented, received feedback, and then re-presented a new system for measuring the net social value added to society by businesses. In POM we have studied how one of the world's largest power companies was able to develop and implement a social responsibility plan with very little time and budgetary requirement. Tomorrow in Economics we will analyze the economics of trade, development, and sustainability.
It's great the way it all comes together from several different angles. Because this is a general management program it is important for us to understand how a key goal (in this case, social responsibility) can be accomplished by different business functions--individually or all together.
Furthermore it is gratifying to me personally that IMD emphasizes sustainability. As anyone who has read my first blog entry will know, sustainability is very important to me and I'm pleased that this program does more than pay it lip service. I can see on their faces that there is very genuine interest and inspiration in my classmates too. We are not here just to learn how to "get rich." We are here to learn how to be more effective at making the world a better place. It's a hell of a challenge, but it is worth it.
2008-02-13
International Wisdom
On Monday we had a cultural values exchange--in ICA/E of all places! We were divided into groups by nationality (44 different groups!) and given a list of 12 virtues. Each group was then instructed to provide at least one proverb from its country about each virtue.
Although there were many great ones, my two favorites hands-down were:
Virtue: Fidelity
Nationality: French
Original Proverb: La fidélité en amour n'est que la paresse du désir.
English Translation: Fidelity in love is just the laziness of desire.
Virtue: Temperance
Nationality: Finnish
Original Proverb: Hosumalla ei tule kuin kusipäisiä lapsia.
English Translation: Rushing won't get you anything but stupid children.
Awesome.
Also awesome: today in Accounting we dissected Carlsberg, a huge beer conglomerate.
Although there were many great ones, my two favorites hands-down were:
Virtue: Fidelity
Nationality: French
Original Proverb: La fidélité en amour n'est que la paresse du désir.
English Translation: Fidelity in love is just the laziness of desire.
Virtue: Temperance
Nationality: Finnish
Original Proverb: Hosumalla ei tule kuin kusipäisiä lapsia.
English Translation: Rushing won't get you anything but stupid children.
Awesome.
Also awesome: today in Accounting we dissected Carlsberg, a huge beer conglomerate.
2008-02-11
Ping Pong
Ping Pong has become a regular part of life here at IMD. After lunch it is a great way to get the blood pumping before afternoon classes. Most of the people who play are a lot better than I am, having played much longer and more consistently. This afternoon, though, I was briefly on fire. I absolutely nailed a forehand with just about everything I had. It felt good. ICA/E with Boschek felt less good. Oh well, I call it a net positive.
2008-02-04
Long night ahead of us
Our group's ICA/E presentation on the electricity generation industry is due this week and we're far from completion. We've just ordered pizzas to give us an energy boost (CHF 80--$70--for two pies!!!) and I think it's going to be a long night.
At least we're not the only ones. People are whistling in the hallways. One person starts then others join in. I whistled Daryl Hannah's solo from Kill Bill on my way back from the bathroom and I had at least three others join in.
We've split off into subgroups for the time being and both of my partners are sick. I will be strong of mind and fend off their viruses! :-)
At least we're not the only ones. People are whistling in the hallways. One person starts then others join in. I whistled Daryl Hannah's solo from Kill Bill on my way back from the bathroom and I had at least three others join in.
We've split off into subgroups for the time being and both of my partners are sick. I will be strong of mind and fend off their viruses! :-)
WalMart
ICA/E revolved around a WalMart case today. How did it grow to dominate its much larger rivals such as K-Mart? Why and how could it diversify to include Sam's Club? Why and how could it diversify into other countries? At what price to the small, rural town comes WalMart's strategy? The case was set in 1986. I always find these retroactive cases interesting because then we have the opportunity to see how things played out with the benefit of 20/20 hindsight.
What really made the discussion personal for me is that Ralf chose Janet as the name of a hypothetical WalMart customer in Arkansas. I have an Aunt Janet who lives in Arkansas and is probably a WalMart customer. Ralf usually chooses Frieda or Greta for hypotheitcal names so good on him for proposing an accurate Arkansan name!
Since much of today's class was devoted to discussion instead of lecture, there weren't too many Ralfisms. As always, though, there were a few:
What really made the discussion personal for me is that Ralf chose Janet as the name of a hypothetical WalMart customer in Arkansas. I have an Aunt Janet who lives in Arkansas and is probably a WalMart customer. Ralf usually chooses Frieda or Greta for hypotheitcal names so good on him for proposing an accurate Arkansan name!
Since much of today's class was devoted to discussion instead of lecture, there weren't too many Ralfisms. As always, though, there were a few:
- Let's bring it on, duuuuuude!
- At this stage in your career it's important that you show leadership . . . and hold hands.
- Coffee breaks are so 70s anyway.
- I'd rather eat myself instead of letting someone else eat me.
The soup du jour today was cauliflower. Off to Finance!
2008-02-01
Ralf Boscheck
It's funny that I chose to introduce our Industry and Company Analysis/Economics course in last night's blog because our prof was in fine form during this morning's class.
Some Boscheckisms:
Some Boscheckisms:
- Why are we going into such detail? BECAUSE IT'S GOOD FOR YOU!
- You're tired? Why? Because you're only sleeping four hours a day? That's just half of what you're supposed to have. There, problem solved.
- At IMD, many professors will call this element "people." In economics we call it what it really is: "labor."
- Cartels rely on facilitating devices, such as long-term contracts or implicit agreements to get around the prisoner's dilemma. It's a lot like marriage, actually.
- Where did this great new technology come from? GERMANY, of course!
- This is not some tra la la like marketing; there is only ONE right answer.
- Why do you need a toilet break? I don't need a toilet break, but that's fine because I'm a hero.
This afternoon's class is Marketing. Tra la la, here we come!
2008-01-30
Industry and Company Analysis / Economics
Aside: the soup du jour at IMD's restaurant was French onion today--delicious!
ICA/E is taught by Ralf Boscheck, a crazy (in a good way) German who throws chalk at students who ask inane questions. His first lecture was essentially the complete economic history of the world in four hours--step up to the fire hose and take a drink! He's very, well, German, very focused on economics and not concerned with "tra la la," as he puts it. "Tra la la" translates to "fluff" or "basically every other course being taught." He frequently refers to schools of thought by the business schools that support them. E.g., "The Chicago folks would say that capital is never an entry barrier but if you're at Harvard, you'd better not mention it because you'd be laughed off campus."
Each group is currently working on a detailed industry analysis and company analysis for this class; my group was assigned electricity generation for our industry. Half the group has been burning the midnight oil doing industry research for the past two weeks. I am part of the second half, which will focus on a specific company in a specifc segment of that industry, analyzing its position and making recommendations. Our section gets under way next week.
The major take-aways so far from this course have been:
ICA/E is taught by Ralf Boscheck, a crazy (in a good way) German who throws chalk at students who ask inane questions. His first lecture was essentially the complete economic history of the world in four hours--step up to the fire hose and take a drink! He's very, well, German, very focused on economics and not concerned with "tra la la," as he puts it. "Tra la la" translates to "fluff" or "basically every other course being taught." He frequently refers to schools of thought by the business schools that support them. E.g., "The Chicago folks would say that capital is never an entry barrier but if you're at Harvard, you'd better not mention it because you'd be laughed off campus."
Each group is currently working on a detailed industry analysis and company analysis for this class; my group was assigned electricity generation for our industry. Half the group has been burning the midnight oil doing industry research for the past two weeks. I am part of the second half, which will focus on a specific company in a specifc segment of that industry, analyzing its position and making recommendations. Our section gets under way next week.
The major take-aways so far from this course have been:
- Substitutability: how easy it would be to substitute your company's service, suppliers, distributers, customers, etc. affects the attractiveness of any market.
- How to identify and define key success factors for companies in a given market segment
- How to delineate a company's assets, capabilities, and systems to analyze competitive advantage
Although I'm loving IMD's focus on development of soft skills (one of its most significant differentiators from other programs), it is great to be paying attention to classic business hard skills as well. I've really never done this kind of analysis before and IMD provides tremendous support through digital access to millions of articles, books, reports, and other publications. Our Information Center is led by John Evans (Welsh) who, along with running a first class operation, is also an oenophile. Detailed data on the German renewable energry industry is great and all, but tips on places to buy wine around here would be for more valuable!
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