Peace Talking Terrorists

Obama Inspired Barbie Dolls

The Harvard MBA: Scarlet Letters Of The Financial Meltdown

The Times:

If Robespierre were to ascend from hell and seek out today’s guillotine fodder, he might start with a list of those with three incriminating initials beside their names: MBA. The Masters of Business Administration, that swollen class of jargon-spewing, value-destroying financiers and consultants have done more than any other group of people to create the economic misery we find ourselves in.

From Royal Bank of Scotland to Merrill Lynch, from HBOS to Leh-man Brothers, the Masters of Disaster have their fingerprints on every recent financial fiasco.

I write as the holder of an MBA from Harvard Business School – once regarded as a golden ticket to riches, but these days more like scarlet letters of shame. We MBAs are haunted by the thought that the tag really stands for Mediocre But Arrogant, Mighty Big Attitude, Me Before Anyone and Management By Accident. For today’s purposes, perhaps it should be Masters of the Business Apocalypse.

Harvard Business School alumni include Stan O’Neal and John Thain, the last two heads of Merrill Lynch, plus Andy Hornby, former chief executive of HBOS, who graduated top of his class. And then of course, there’s George W Bush, Hank Paul-son, the former US Treasury secretary, and Christopher Cox, the former chairman of the Securities and Exchange Commission (SEC), a remarkable trinity who more than fulfilled the mission of their alma mater: “To educate leaders who make a difference in the world.”

It just wasn’t the difference the school had hoped for.

Business schools have shown a remarkable ability to miss the economic catastrophes unfolding before their eyes.

In the late 1990s, their faculties rushed to write paeans to Enron, the firm of the future, the new economic paradigm. The admiration was mutual: Enron was stuffed with Harvard Business School alumni, from Jeff Skilling, the chief executive, down. When Enron, rotten to the core, collapsed, the old case studies were thrust in a closet and removed from the syllabus, and new ones were promptly written about the ethical and accounting issues posed by Enron’s misadventures.

Much the same appears to have happened with Royal Bank of Scotland.

When I was a student at Harvard Business School, between 2004 and 2006, I recall a distinguished professor of organisational behaviour, Joel Podolny, telling us proudly of his work with Fred Goodwin at RBS. At the time, RBS looked like a corporate supermodel and Podolny was keen to trumpet his role in its transformation. A Harvard Business School case study of the firm entitled The Royal Bank of Scotland: Masters of Integration, written in 2003, began with a quote from the man we now know as Fred the Shred or the World’s Worst Banker: “Hard work, focus, discipline and concentrating on what our customers need. It’s quite a simple formula really, but we’ve just been very, very consistent with it.”

The authors of the case, two Harvard Business School professors, described the “new architecture” formed by RBS after its acquisition of NatWest, the clusters of customer-facing units, the successful “buy-in” by employees. Goodwin came across as a management master, saying: “A leader’s job is to create the conditions that enable people to believe, in their hearts and minds, in the value of what they are doing.”

Then just last December, Harvard Business School revised and republished another homage to RBS – The Royal Bank of Scotland Group: The Human Capital Strategy.

It is tragic to read now of all the effort put in by those under Goodwin, from “pulse surveys” to track employee performance to “the big thank you”, a website where managers could recognise individual excellence in customer service.

Every trendy business school idea was being implemented, it seemed, while what really mattered – the bank’s risk assessment, cash flow and capital structure – was going to hell. To be fair, neither Podolny nor the authors of the case studies were finance professors, but it’s still pretty shocking that a school that purports to teach general management should fail to see the gaping problems at a firm they studied in such depth.

Is there a pattern here? Go back to the 1980s, and you find that Harvard MBAs played a big enough role in the insider trading scandals that washed through Wall Street for a former chairman of the SEC to consider it a good move to donate millions of dollars for the teaching of ethics at the school.

Time after time, and scandal after scandal, it seems that a school that graduates just 900 students a year finds itself in the thick of it. Yet there is remarkably little contrition.

Last October, Harvard Business School celebrated its 100th birthday with a global summit in Boston. While Wall Street and Washington descended into an economic inferno, Jay Light, the dean of the school and a board member at the Black-stone private equity group, opened the festivities by shrugging off any responsibility.

“We all failed to understand how much [the financial system] had changed in the past 15 years or so, and how fragile it might be because of increased leverage, decreased transparency and decreased liquidity: three of the crucial things in the world of financial markets,” he said.

“We all failed to understand how that fragility could evidence itself in a frozen short-term credit system, something that hadn’t really happened since 1907. We also probably overestimated the ability of the political process to deal with the realities of what could happen if real trouble developed.

“What we have witnessed is a stunning and sobering failure of financial safeguards, of financial markets, of financial institutions and mostly of leadership at many levels. We will leave the talk of fixing the blame to others. That is not very interesting. But we must be involved in fact in fixing the problem.”

You would think after failing on so many levels, the school that provides more business leaders than any other might feel some remorse. Not in the least. It’s onwards and upwards, with the very people who blew apart the world’s financial plumbing now demanding to fix the leak.

You can draw up a list of the greatest entrepreneurs of recent history, from Larry Page and Sergey Brin of Google and Bill Gates of Microsoft, to Michael Dell, Richard Branson, Lak-shmi Mittal – and there’s not an MBA between them.

Yet the MBA industry continues to grow, and business schools provide vital income to academic institutions: 500,000 people around the world now graduate each year with an MBA, 150,000 of those in the United States, creating their own management class within global business.

Given the present chaos, should-n’t we be asking if business education is not just a waste of time, but actually damaging to our economic health?

If doctors or lawyers wreaked such havoc in their own professions, we would certainly reconsider what is being taught at medical and law schools.

During my time at the school, 50 students were chosen to participate in a detailed survey of their development. Scott Snook, the professor who ran it, reported that about a third of students were inclined to define right and wrong simply in terms of what everyone else was doing.

“They can’t really step back and take a critical view,” he said. “They’re totally defined by others and by the outcomes of what they’re doing.”

A group of people unable to see their actions in the broader context of the society they inhabit have no business being self-regulating. Yet in the financial services industry this is pretty much what they demanded and to a large extent got – with catastrophic consequences.

The happiest in my cohort, which graduated into the rosy economic conditions of 2006, are now certainly those who went off to do the unfashionable jobs: a friend who spurned Wall Street to join a Mid-western industrial firm, and now finds himself running the agricultural division of an Indian conglomerate; one who joined a foundation promoting entrepreneurship; one who went into Boston city government, another who moved to Russia to run a cinema chain.

However, these were the rarities: 42% of my class went into financial services and another 21% into consulting, both wretched sectors to be in today and for the foreseeable future.

Applications to business schools in America and Europe are broadly up, as people search for a safe haven from the recession. What are they thinking? Many MBA jobs will not be coming back. Students who stump up more than £60,000 for a two-year MBA can expect a long wait to make that back.

For those about to graduate from business school, these are grim times. Financial and consulting firms, which used to soak up two-thirds of the MBAs from top schools, have all but vanished from campuses. Suddenly jobs in government and at nonprofit organisations are in hot demand from students who used to consider them laughably underpaid.

A dose of modesty among MBAs and business schools is long overdue. But it’s not going to come from Harvard. Light, told his audience in October: “The need for leadership in the world today is at least as great as it has ever been. The need for what we do is at least as great as it has ever been.”

A bold claim to which many might say: please, spare us.

Almost Too Big To Fail

Octodad

UberBama And The Ubercrats

One of the great legacies of the Nazi’s Third Reich was the idea that modern, educated man, could create an ubermensch, a kind of best man or superman. That baton was picked up by the Soviets and later, by many western leftists.

The creation of the ubermensch is always predicated on being representative of the best of man’s ideals. The Nazis believed that the Aryan ubermensch would serve as an example to those lesser untermenschen, freeing them from degenerate art, music and values. The Aryan ubermenschen were to be the world’s leaders for one thousand years. They and they alone, knew what was best for mankind, and they would reshape the world and mankind with their values- and woe unto anyone or group that saw things differently or provided even a perceived threat. The comparisons to our times are inevitable and unmistakable.

There are a few truths shared by many of today’s Ubercrats and the Nazis, Soviets and others that seek to create the ubermensch. There is an unassailable truth; to create an ubermensch, you have to first have to embrace the notion of the totalitarian state, where behavior and thoughts are controlled by the state. In an authoritarian state, it is only behaviors are subject to state control. That may seem harsh but, when the Ubercrats derisively refer to Republicans as belonging to a  ‘culture of corruption’ or disparage anyone who finds themselves at odds with their ideas and agenda, the conclusions are inescapable. They want you to think in a certain way.

Like the Nazis and Soviets before them, many of today’s Ubercrats understand the credibility of an academic imprimatur. That seal of approval is an important foundation stone of a totalitarian state. The Nazis and the Soviets each denied reality and truth in their academic institutions. As an example, the Germans created a kind of ubermensch, a phony science of racialism taught and endorsed by scientists. They attempted to bestow upon astrology and the occult a legitimate scientific status. Al Gore would feel right at home- ‘Disagree with me and my science and you are irrelevant and immoral.’ Gore is the high priest of environmental hypocrisy- and the Ubercrats dance on.

The Soviets embraced the ‘truth’ of the happy worker, toiling away for the betterment of the State- even if they had to ignore reality and kill tens of millions to propagate that ‘truth.’ Today’s Ubercrats embrace the phony truth of multiculaturalism and moral relativism, as if their world were a Sesame Street Utopia. The leftists ignore reality. They embrace and apologize for terrorist butchers and tyrants, blind to the blood pooling at their feet and the millions of hopeless lives they willingly abandon.

The art (read: approved) of the day depicting the happy and healthy worker toiling on the collective farm, was a myth codified and sanctified by Soviet ‘economists,’ all touting the failures of the latest Five Year Plan as successes. Ubercrat economists, like their leftist predecessors tout bailout and stimulus failure as success, much in the way Hamas declared ‘victory’ over Israel in the recent Gaza confrontation.

There are no images of the Soviet gulag. That reality could no more be made to disappear than Nazi concentration camps. That kind of ugliness was no more real art than Alicia Shvarts and her ‘abortion art‘ efforts, hailed by progressives as ‘important’.

Many leftists and Ubercrats now desperately seek the credibility of an academic imprimatur, before their biases and lies are realized. Universities are filled with leftist ubermensch professors for whom ideology is more important than truth. Like their German and Soviet predecessors, leftist and Ubercrat ideologues do little to hide their agenda, or contempt for those who still embrace reality and truth. Leftist ideologues embrace moral relativism, equating all moralities. Leftist ideologues are threatened by religion, because religion might mean a lessened loyalty to their cause- or whatever cause du jour they espouse at a particular time. Leftist ideologues are threatened by any standard of measurement- because they fear they might be measured and found wanting. That too, is why leftists embrace the illusion of multiculturalism- that all cultures are equal, with none better than the other. The fear of measurement and comparison is real.

Leftist ideologues fear and despise capitalism because capitalism allows for the freedom and self expression of each individual, ideas anathema to leftist ideologues. Like the Nazis and Soviet communists before them, it is their vision and their vision only that is acceptable. Deviate even a bit and you become an ‘enemy of the state.’ Just ask anyone who questioned President Obama’s bailout package- a bill that was expected to be supported prior to anyone even reading it.

The Nazis, Soviets, leftists and Ubercrats share a common trait. In their goal to create an ubermensch and an ubermensch society, they had to become untermenschen, adopting racist, repressive tactics so as to promote and steamroll their agendas. The Ubercrats talk about integrity and responsibility even as they wallow in porkonomics.

The leftists and Ubercrats do not see themselves as inheritors of the evil ugliness that was the Nazi and Soviet ubermenschen. They wrap themselves in the words of documents of higher calling and the most noble of causes. That said, what they do not see or acknowledge are the repercussions of their support for failed ideologies, beautiful documents and proclaimed statements notwithstanding. The legacy of German and Soviet ideologies are the unmarked graves of the tens of millions of the forgotten dead.  Killed because they were in the way as the caring ‘progressives’ marched on. There are tens of millions more, still suffering under the boot of ‘progressive’ oppression- and that is of little concern to the Ubercrats- but only as long as they vote for the Ubercrats.

The Soviets were to create a worker’s paradise, where the bounty was plentiful and the society Utopian. Today’s leftists and Ubercrats want to destroy the evils of capitalism and American and democratic successes- and they don’t give a damn about who will get hurt in the process.

Dr Sanity notes in Come For The Egalitarianism, Stay For The Bestiality And Tyranny,

So, many times in politics, programs that originate with the “best of intentions” end up doing exactly the opposite of what was intended. Yet, the political left is so ideologically committed to the utopian ideal of egalitarianism which, in the real world simply makes everyone equally poor and miserable (except for the lucky elites who control the social system) that they reflexly keep pouring money into programs that can be shown to actively harm the people they are meant to help; and reinforce the stereotypes they are meant to end.

The politically correct left heaps scorn on business, capitalism, free trade, and globalization; and instead glorify and praise the most primitive and barbaric of cultures and cultural practices. As Bob suggests, they come for the egalitarianism, but stay for the bestiality and tyranny they unleash with their “progressive” ways.

If they really cared about helping the poor; if they really cared about social “justice”–then they would shut the hell up and get out of the way of those evil, greedy capitalistic bastards, who, while pursuing their own selfish, profit-making agendas, in the long run effortlessly manage to increase the standard of living and improve the lives of everyone around them.

If the left really cared about the ‘victims’ of oppression, they would position themselves as human shields in Darfur. They are content to be ‘human shields’ in Gaza or the West Bank because they know the Israelis will not deliberately target them, unlike the murderous and barbaric janjaweed in Darfur, who don’t really give a damn. If the left and the Ubercrats really cared about the well being of oppressed people, they would actively engage in efforts to empower them, rather than just talk about them as they spent their money promoting their porkonomics, political agendas and ideologies.

It is an unequivocal truth that Utopias cannot be created without imposing tyranny- and that seems to bother President Uberbama not in the least.

See also Dr Sanity’s recent post:

Right now in the news we have excellent examples of what I mean by “sociopathic selflessness” (Barney Frank, Ted Kennedy, Barack Obama and many others) and “sociopathic selfishness” (Bernie Madoff and the CEO’s and governing boards of looted companies that should be allowed to fail and their executives prosecuted). Often, malignant narcissists combine the qualities of both types, vascillating between the grandiosity characteristic of the malignantly selfish and the compassionate do-gooder of the malignantly selfless.