photo by Monica Almeida for the New York Times. Attached to article linked below by Jennifer Medina

Santa Monica College, like all California community colleges, has been under intense financial pressure over the past several years.  Since 2008, over 1100 class sections have been cut from its normal fall semester offering. As a premier transfer institution to the University of California system, SMC can no longer serve its students, who are clamoring to get into classes so that they can finish their degrees and move on.

The California legislature, even knowing that the community colleges are a bargain to California taxpayers, have ruthlessly cut the community colleges' budgets--right at the time that laid-off workers are seeking retraining, so are competing with young adults for class space on community college campuses. 

Thinking like a business, the SMC Board of Trustees and Superintendent/President Dr. Chui Tsang have developed a plan to serve students based on elementary principles of supply and demand. They have created a non-profit entity to contract with the College to provide for-credit education at a contracted price--$180 per credit hour instead of the $47 per credit hour students will be paying beginning in Summer 2012.  The pricier classes would open for all potential registrants at the beginning of the registration period (no waiting for a late enrollment date, if you are willing to pony up the extra cash).  Students opting for these classes would no longer be vying for space in the regular college classes, freeing up space so that needier students could enroll. 

Dr. Nancy Greenstein, SMC Board member, with Dr. Chui Tsang

There are several groups of students that are currently waiting at the back of the line for enrollment space, who may benefit from these classes as well:

• International students, who already pay high tuition rates
• "Reverse transfer" students--who are already at UCs and Cal State universities, but who cannot get classes there because of funding cuts.  These new fee classes at SMC would still present a cheaper option--and make graduation from those students' home institutions a more timely possibility
• High school concurrent enrollment students--who cannot participate in sports or music at their high school and still take all the classes they need for college prep have been, for years, filling in their course load at SMC and other community colleges.  Now, however, they are totally squeezed out of all classes because they have the absolute lowest priority for enrollment.  And these students' parents are the ones whose tax dollars fund all of the parcel taxes that allow for on-campus building and improvements. 
• Students who need extra chances (also because of legislation reacting to budget cuts), are now prevented from attempting to take a class more that three times on the state's nickel--even if they drop it in the third week. Fee-based contract courses would allow these struggling students to re-take the courses to progress with their educational plan.

Nevertheless, the natural perception of any system that is "two-tier" is that one tier is for the "haves" and one is for the "have-nots."  As Academic Senate President Janet Harclerode said, this produces an "ick factor." Still, it looks as though the reality would be that MORE seats would be created, and that more of the "have-not" students could be served by the regular college classes if they were not filled by students who could afford to pay more. 

A pilot program is set for Summer 2012, with 50 class sections in the mix.  The Santa Monica College community will see how this plan plays out legally, ethically and practically. 

Note: Data for this article was taken from the New York Times article, "2-year College, Squeezed, sets 2-Tier Tuition ," published Friday, March 30, 2012. Slight corrections (for example, prevailing fees) were made to the data provided by the NYT due to information available firsthand.
...Teri Bernstein, professor and member of the Academic Senate Executive Committee

Follow up:

• What does your institution charge per unit?  Is it difficult to get the classes you need?  If you were able to get a required class by paying a premium price for the class, would you do it?  If so, what would be the price point at which it would no longer be attractive?
• Do you think this system is fair?  Why or why not?  What are the ethical issues? How might they be mitigated?
• What might be some unforeseen consequences of this plan?  (Both positive and negative). 

image by Joe Posner and Ian McPhew from the Marketplace website.

The "hourglass economy" does not bode well for middle-income jobs. David Brancaccio, a reporter for Marketplace, did a piece this week themed, "Robots Ate My Job."

Jobs that Brancaccio has found to be replaced by robots--or that are done by programs when they were previously done by humans--include:

• checkout scanner robots, and just self-check lines at supermarkets
• pharmacy robots that fill medication prescriptions
• tax preparing programs (via Turbo Tax)

Some observers say that automation and technology only handles the boring jobs, so that humans are freed up to do more interesting jobs, but this is not the same as a farm worker taking a manufacturing job in the city.  Where is a grocery checkout clerk--who now is unionized and gets decent pay and benefits--going to go with that skill-set? The robot replacement doesn't need any health care. 

A recent episode of 30 Rock was devoted to the effect of the Robot economy.  The job skills of the NBC page, Kenneth, had been input into a robot named "Not Kenneth." All of the job description protocols were programmed into "Not Kenneth" so that the robot knew the job better than the human, supposedly. 

Some of the low-skills jobs are not suited to a robot skill-set: It is tough to train robots to be nannies, janitors, housekeepers and in-home health care workers. But several other jobs might be vulnerable. Will my job as a professor morph into a programmer/manager job as more people become interested in education online? One of the jobs I've held--that of a spot-welder online at the Chrysler Dodge Main plant, welding the roof onto the metal chassis--is now done by a robot in almost all car manufacturing plants. 

I'm not so certain that the robot-human alliance pictured above is so good for the humans...

 image from robot-welding.com.  In 1976, I was welding the roof onto a similar chassis.

This cartoon, from the New Yorker Cartoon Blog, illustrates Executron, a large and powerful killing robot, that the cartoonist is confident will be winning the 2012 elections, in a landslide.

Follow up:

• What is the "hourglass economy"?
• What tasks in your life, that were previously done by human beings, are now done by technology?

image from newstatesman.com

First a clarification. This post has nothing to do with the Natalie Portman film. The "Black Swan" that this post references is the book that brought fame to Nassim Taleb. Taleb is in the news recently, having been interviewed by Margo D. Beller for CNBC regarding his investment advice: "I have no choice but to own stocks." He also indicated that he has holdings in real estate and Euros, but not in U.S. Treasury bonds.

Taleb's "black swan" thesis is that there will be economic events that will occur randomly, and that cannot be predicted by events leading up to them. He does not think his thesis applies to the problems in the U.S. economy today, however.  Rather, he thinks that the U.S. economic problems have been in place for quite a while. Taleb sees a need to implement the following policies:

• Eliminate bailouts ["You need a rate of failure," says Taleb. "What is fragile should break early."]
• Drastically cut government spending
• abolish the Federal Reserve
• live with austerity

image is from amazon.com...where the "click" link really works...see the links below

Follow up:

• Read these books: The Black Swan and Fooled by Randomness, both by Nassim Taleb. They are readable, informative, and present views of business, investing and human nature that cut across the curriculum. They are "required reading" for an educated businessperson. I wouldn't hire any graduate who hadn't read these books. 
• What political candidate does Taleb support and, more importantly, why? Does his logic hold any wisdom for entrepreneurs, or does it only hold true for investors? [Disclaimer: I do not support this candidate, but I find it instructive that Taleb does...]
• Research "abolishing the Federal Reserve" on the internet. Why would Taleb want to implement this policy? What do you think of this idea?

 image from davegranlund.com 

Small Business Challenges Obamacare in Supreme Court (CNBC.com) tells part of the tale of the latest challenge on the Supreme Court docket.  An unprecedented 6 hours over 3 days has been scheduled for hearings on the legal issues surrounding Obamacare, the health care plan which became law in 2010. 

The lawsuit that the Supreme Court is hearing, was brought to court by The National Federation of Independent Business, along with 26 states.  Some of the issues in the case include:

• Obamacare requires that everyone have health insurance. is the penalty assessed to individuals a tax or a fee?  If it is a tax, then it cannot be contested until after it is assessed, which will be in 2014.
• The "individual mandate" that everyone has to buy coverage is being challenged. On one side, proponents of Obamacare argue that EVERYONE will need health care at some point, so it is not really a choice--everyone will use the system.  Interstate commerces laws allow the federal government to asses fees on those who participate in commerce. The other side argues that people should have a choice about entering into "commerce."
• Some small businesses fear that it will cost them money; others think that it will save them money. Being forced to spend money on an item that is not a tax may not be legitimate.

The justices will rule on the arguments presented sometime in late June.

Follow up:

• Focus on the small business perspective as you read the article. Do you think that Obamacare will cost businesses money or save them money?  Do the demographics of business employees influence your decision? 
• As a student, what portion of Obamacare might benefit you or your colleagues in class?
• What, according to the linked article, was the goal of Obamacare?

Many fans excitedly anticipated the return of Mad Men to the TV schedule--after a hiatus of 17 months. One of the major features of the show is its use of product placement...a major factor, as it turns out, in negotiations with Matthew Weiner, the creator and writer who remains in charge of what gets into the storyline and the scripts. 

Read some varied opinions about product placement in Mad Men:

• Why product placement won't be a problem
• Product Placement critics are Wrong
• Good and bad examples of product placement. Good: Heineken
• Hidden genius of Mad Men product placement
• Negotiations with Matt Weiner on the brink...over product placements

If you want to read about Matthew Weiner's creative process regarding the show, check out his interview with Terry Gross on FRESH AIR (NPR link to podcast)

Follow up:

• Check out this video, and do the short exercise in it: Selective Attention . Comments? How do your results relate to marketing issues involving product placement?
• Did you watch the first episode of Mad Men this season on Sunday, March 25th? What products did you notice as being featured in the scenes?
• Check out some of the opinions on the links above.  What do you think about product placement on Mad Men as a marketing technique? Which product placement do you think is the most effective?

 image is from afpak.foreignpolicy.com

"Water is Life."  This is a quote (translated from Hindi) above a filtered-water faucet in Chuddani, India, according to a NYT report by Amy Yee, linked at Water issues in India. According to a World Health Organization, "tens of millions" of people in India still lack access to clean water, and about 58% have no access to a hygienic toilet. 

What does this mean for business? Water is a very basic need--people cannot work or live without access to clean water. Uncertain water supplies mean an uncertain environment for business. These factors possibly contribute to the willingness of corporate partnerships with government, in places like Chuddani, to provide filtration systems and encourage people to value and pay for clean water. Changing people's attitudes toward water remains a challenge. Nevertheless, this partnership of increasing user awareness and government and corporate investment can create a more stable and sustainable environment for doing business. 

New technologies for water treatment also present business opportunities. As rainfall patterns change, surface water treatment might be the best solution to providing a stable water source. Said Ned Breslin, chief executive of Water For People: “The challenge is not technological but financial and managerial.  Can water supplies be managed in a way that meets lots of demands at affordable prices?”

This post is in honor of World Water Day, March 22nd. 

Follow up:

• Are you aware of where your tap water originates? What purification processes does it go through before it reaches your tap?  Where does the water go after it goes down the drain?  Is runoff from the streets processed any differently?
• Do you live in an area that has water shortage problems?  Would you say that water usage awareness is an issue in your circle of friends?
• Have you ever visited an area that had obvious water shortage problems? Or driven across an expanse of desert?  Did this heighten your awareness of the importance of water? Would you start a business in a water-shortage location?  If so, what precautions would you take?

A Dallas branch bank of the Federal Reserve has come out against the government policy of "too big to fail", according to a report at THE DAILY KOS.  Most of the article is a copy of a letter written by Dallas Fed President Richard Fisher.  The letter is an introduction to the Dallas Fed's report entitled "Choosing the Road to Prosperity: Why We Must End Too Big to Fail - Now."

The Dallas Federal Reserve bank, by nature a very conservative institution, has taken the position that protecting the very rich undermines both:

• the checks and balances that are inherent in a capitalist system, and 
• the faith that people have in capitalism.  

Richard Fisher makes the point that true believers on both the left (the Occupy movement) and the right (the Tea Party) decry the government intervention on behalf of the very largest financial institutions.  Although the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") was designed to promote financial stability and to end the TBTF policy, some of the same problems still exist:

• just 5 banks control more than half of the banking industry assets
• the top 10 banks control 61% of the assets; 20 years ago, the top 10 banks controlled 26% of the assets
• big banks hamper the Federal Reserve's ability to affect monetary policy
• the debt-dependent boom is that preceded the reality is still debt-dependent, even though the "boom" is over
• losses and bad debts--not all of which have been recognized under GAAP--are still part of the TBTF banks' financial statements
• clogged financial statements slow the loaning of new money that can stimulate the recovery

The report itself states:

"Capitalism requires businesses and individuals be held accountable for the consequences of their actions. Accountability is a key ingredient for maintaining public faith in the economic system.The perception—and the reality—is that virtually nobody has been punished or held accountable for their roles in the financial crisis...The idea that some institutions are TBTF inexorably erodes the foundations of our market-based system of capitalism."

 image from the Marketplace web piece

Robert Reich, in an interview with Tess Vigelund of Marketplace, thinks that business morality can make a difference for the public. Says Reich, "The abuses of public trust on Wall Street and in the executive suites of our largest corporations are breaches of public morality, and they are shameful. They undermine the integrity of our economy and our democracy."

Reich uses the term "shameful" to echo what others have said about the behavior of private citizens in their personal lives. On the heels of the recent stories about government interfering with contraceptive rights, and the controversy about gay marriage, Reich notes that, "The biggest moral crisis in America isn't about the private decisions Americans make about who to marry or when to have children; it's about the violations of public trust at the highest reaches of our economy."

Even though a Goldman Sachs insider has recently gone public with company policies prioritizing profits over customers, and there are other reports of executive greed and record-breaking corporate investment in political campaigns, Reich does have hope.  Historically, public outrage and committed, principles-based reformers have saved capitalism from itself at least twice:

• in the early 1900's--monopolies and sweatshops were held in check by union reformers and government regulation
• in the 1930's--after the stock market collapse, when government works projects and social security reforms were enacted.

Reich hopes that corporations, following business leaders such as Howard Schultz of Starbucks, will begin a "new era of reform based on public morality." He hopes to see corporations:

• eliminate conflicts of interest
• contain executive pay
• regulate banks' gambling with customer money
• lobby Congress to establish laws that will no longer allow corporations and the extremely wealthy to buy elections via Super PAC spending.

Follow up:

• Who is Robert Reich? Where does he work now, and what position(s) has he held in government?
• Who is Howard Schultz?  What successes has he had as a businessperson?  What positions has he taken to "give something back"?

image from care2.com  with the caption: Which is Worse?

In a Los Angeles courtroom, the battle between Real Sugar and High Fructose Corn Syrup is on.  As reported on Good Morning America by Susanna Kim (via Yahoo! News): "Sugar Producers Say Corn Syrup Not The Same."

This is one instance where a marketing message has come back to "bite" the messenger.  High Fructose Corn Syrup was advertised as an ingredient that would make foods taste smoother and yummier than sugar.  Corn Refiners tried to differentiate its product to gain market share vis a vis sugar...which it successfully did.

However, medical research has found, in some studies, that corn syrup is processed more rapidly by the body, and therefore can lead to more problems related to metabolism and insulin resistance.  So now high fructose corn syrup wants to mitigate its bad reputation, by equating itself with sugar.

As a result, a group of 10 sugar entities has sued the Corn Refiners Association.  The sugar companies want the High Fructose Corn Syrup folks to stop their "educational campaign" that claims that there is no difference between sugar and corn syrup. According to KPCC's Patt Morrison's show, the Corn Refiners Association has petitioned the Food and Drug Administration to allow corn syrup to call itself "sugar"; the FDA has not yet ruled on this request.

On a side note, when I was recently in New Zealand, I checked labels for high fructose corn syrup, and hardly found any. I was surprised to see that even the sodas had sugar as the sweetener--not high fructose corn syrup--so the soda pop in New Zealand was much more like the soda pop sold in the United States 35 years ago. 

Follow up:

• Have you been tuned in to the press regarding high fructose corn syrup?  Does any of the discussion influence your food choices? How powerful do you think the "educational campaign" of the Corn Refiners has been in changing public opinion?  Do you think this lawsuit will make a difference?
• Check out the advertising campaign website of the Corn Refiners.  What do you think? 

image from articles.economictimes.indiatimes.com

The big story today is that a corporation with WAY TOO MUCH cash has decided--FINALLY-- to declare a dividend.

APPLE ! 

copyrighted Apple image

When a person invests in corporate stock, the expectation is that the return will come from a combination of two things: 

• increase in stock value
• dividends.

So, theoretically, if a corporation earns $1,000,000 in earnings, that should go to the stockholders either as dividends (which is a cost to the corporation) or will show up as increased stock value (which is paid by the marketplace, rather than the corporation). 

What generally happens, when the increased value comes from the market, is that the stock increases in value in the market in EXCESS of the increase in value that would be supported as underlying earnings. This certainly has happened with Apple.

Apple's decision to actuallly declare and pay quarterly dividends will broaden the base of investors interested in Apple stock. Pension funds and retirees often look to actual cash returns in evaluating a stock investment. The anticipated dividend is $2.65 per share. The Washington Post calls this a "psychological boost" for investors...but this is also real cash to spend.

Follow up:

• Why would a dividend appeal to stockholders?  What type of stockholder would be most likely to appreciate a dividend, rather than stock value appreciation (increase in market value)?
• Read the article at the link. What else does Apple plan to do with its stock?

Monsanto funds significant research done at the University of California at Davis, so Monsanto has quite a presence both in people's lives and in the University's farms. 

Nevertheless, there are several discussion points with respect to Monsanto products and human needs for safe and healthy food. 

Follow up:

image from gothamist.com

Controversy surrounds the charitable marketing program that hired homeless individuals to be mobile 4G hotspots at South by Southwest, (SXSW), in the Austin, Texas Convention Center. 

If you haven't yet read about it yet, check out this link:  at SXSW: homeless people hired as mobile hotspots.

BBH Labs (a branch of an international marketing company) set this up, thinking it would be a win-win.

• Homeless individuals who willingly participated in the project would get paid $20/day plus any donations they received from convention-goers.
• Connection-starved technology fans at the convention would be able to log in at these hotspots instead of experiencing the connection problems caused by a concentration of technophiles at this convention location. 

Using a human being as a technology "tower," however, made many people uncomfortable, while others defended the idea.

• Jenna Wortham, in a NYT Technology article quoted a Wired blogger, Tim Carmody, who "described the project as 'completely problematic' and sounding like 'something out of a darkly satirical science-fiction dystopia'."
• Saneel Radia, the director of innovation at BBH Labs, said his project was analagous to homeless people selling newspapers or another project where his company let homeless individuals use Twitter and other social media to call attention to homeless problems. 
• Mitchell Gibbs, director of a homeless shelter, saw it as an employment opportunity that helped people get involved in a grass-roots, entrepreneurial endeavor.
• Adam Hanft, a marketing executive, noted the 1% vs. 99% chasm between the homeless and the conventioneers.  He said, '“There is already a sense that the Internet community has become so absurdly self-involved that they don’t think there’s any world outside of theirs.” 
• "Everyone thinks I’m getting the rough end of the stick, but I don’t feel that,” said Clarence Jones, one of the homeless participants (pictured above). “I love talking to people and it’s a job.”

Maybe it was the language that was used on the point-of-purchase advertising garment that made people uneasy: "I am Clarence, a 4G Hotspot," read the t-shirt of Clarence Jones.  Equating a real human being with an inanimate technological object doesn't sound quite right--which is why it may have caught people's attention.  Advertising language has to walk a thin line between appropriate and "eye-catching."

Follow up:

• What is "South by Southwest"?  Why is it important?  Who is it important to?
• This is an example of job creation. What specifically are the objections to this hiring practice? What is your view and why? How do you decide?
• What might you have printed on the t-shirts that might have made this service less controversial?

image from openlibrary.org 

Who would have thought?  Utah is a great venue for setting up an international business!  

But why?  It turns out, the youth members of the Church of Latter Day Saints, otherwise known as Mormons, spend a year or more as young adults on "missions" to foreign countries, where they become fluent in the language.  This is a great boon for international marketers.

The transcript of reporter Steve Henn's article (which was a radio piece on NPR News) is  on the website for March 12th.  According to the article, the job creation rate in Utah was higher than that for any other state. Henn interviewed two ski enthusiasts--who also happen to be very successful entrepreneurs--who have benefited from the unique skill set in the Utah job market:

• Jill Layfield is the CEO of Backcountry.com, a tech company which did $300 million in business internationally last year. 
• Jeremy Andrus, Harvard graduate, is the CEO of Skullcandy, Inc., which designs and manufactures high-end headphones for skiers, skateboarders and surfers. His company went public last year and did $400 million in business.

And get this: eBay recently pulled jobs from a call center in the Philippines and relocated them to Utah. About 350 jobs. And the National Security Agency and Goldman Sachs are also setting up locations in Utah. 

Who knew?

Follow up:

• What are other reasons that businesses might want to locate in Utah, according to the article?
• Do some internet research about Utah, or any other state in which you might want to start a business, or live and work in. Use Google operators and Google limiters to filter your sources so that you get good data. Make a list of pros and cons about doing business or being employed in that state. Cite your references. 

image from technabob.com

Check out the very short video linked here: "Three Things About the New iPad".  What do you think?  Has enough changed from the previous versions to warrant an upgrade?

While you are thinking about connectedness and technology, think about what you want your computer-esque and communication devices to do for you.  Some possibilities to consider are your budget and the "cost-benefit" of acquiring this new device.

Every consumer has to make individual choices, based on their own needs and budget.  But, when making a big ticket purchase, it is sometimes helpful to look at the decision from a business perspective.  What needs does it satisfy? With a technological product, it is also a good idea to note what NEW needs the product creates.

For people who view themselves as "first adopters,"  it may be extremely important to have, own, and know the latest technology.  For others, the situation may not be so compelling.

Follow up:

• According to the video clip, what are the three new things about the "New iPad"? Which of these attributes do you think will make the most difference to consumers and why?
• What do you expect of your computer and your mobile devices? List the programs you use, such as Microsoft Word, Excel, Facebook, LinkedIn, Google, email, etc.   Will this new iPad do any of the things that you do...but do them better?  If so, What is that worth to you?

image from NYT Business Day

Swati Ramanathan has set up a website that adds some needed transparency to a widespread problem in many parts of the world: BRIBERY. Her website is ipaidabribe.com. Participants can anonymously post bribes:

• that they paid
• that they received
• that were requested but were not paid
• that were expected, but have not (yet) been resolved.

Ms. Ramanathan, her husband, and another friend set up this site to address and publicize the day-in-day-out kinds of bribes required to achieve action that was already due, such as:

• getting a child enrolled in high school even after they had already passed the entrance exam (Kenya: 20,000 shillings)
• after passing the driving test, the bribe required to get the license (Pakistan, 3,000 rupees)
• getting a birth certificate from a hospital (Bangalore, 120 rupees)
• claiming a legitimate tax return refund (India, 10,000 rupees)

So far her site has logged over 400,000 reports, the vast majority of them similar to the ones above, where officials will not do their official duty without being paid a bribe.  Agencies from over 17 countries have contacted Janaagraha, the company that set up the ipaidabribe.com site, in order to get the source code so that they could set up similar sites on their own.

As it turns out, social media can be very effective in bringing to light the injustices of daily life...not to mention the impact these bribes have on small and large businesses.

Follow up:

• Do you think that bribery is an issue in ALL parts of the world? Is it endemic to being human? Do you have a preconceived notion as to where bribery is most commonplace? Please provide the details.
• Have you ever taken a bribe or offered someone a bribe? Please provide the details.
• What conditions make bribery less likely?

image from veteransnow.com

"This country's collective student loan bill is now $870 billion. That's more than our total credit card debt, and it's a burden not just on recent graduates," according to the Federal Reserve Bank of New York in a recent report.

A mountain of student loans is an intense burden for a soon-to-be-college graduate. When Marketplace reporter Nancy Marshall-Genzer interviewed students at Emory University for a Marketplace piece, she learned how seriously one student took his responsibility to get a job:  "At the end of the day," said Reginald Extra, an engineering major, "I don't want to be in a position where it's these heavy bills, and I came to this school to get all these loans, and I didn't get a job out of it to pay it back."  

If we look at the conservatism with which Reginald Extra approaches his job search, we can begin to see that a generation of college graduates burdened with debt can influence the entire economy. According to Ms. Marshall-Genzer's piece, college graduates with loan debt put off important life milestones--instead of getting an apartment or a starter-home condo, and buying furniture--they are moving in with their parents. All of the purchases of setting up new households are delayed.  In addition, the money that goes to debt re-payment puts a damper on the pot of discretionary income that young people have to spend on all sorts of items that stimulate the economy. 

This is probably what the Federal Reserve Bank meant when it noted that it was not only the recent graduates that are affected by the huge amount of student debt that exists. It's everybody-manufacturers, home sellers, travel agents--the whole economy.

Things may get worse for the student with loan debts, if he or she gets behind in payments. Late payments get reported to credit bureaus.  In turn, this may have a long-term effect on the credit rating of the student...which could further depress spending opportunities in their futures and thereby affect the economy as a whole.

Maybe one version of economic stimulus could include student loan forgiveness! For a minute, I thought that was my own idea, but I just searched the web to find that several programs have already been put in place by Obama. One plan forgives the loan balance of any student who has faithfully made payments to several types of federally guaranteed loans for twenty years.  That may seem like a long time, but in middle life, any kind of economic relief can mean a lot in terms of lessening financial stress as well as providing discretionary spending money. For more information, link to a site that explains several of Obama's student loan forgiveness programs. 

image from syracuse.com

Follow up:

• How much student debt have you taken on? Do you have a plan to repay that debt? How will it affect the decisions you make with respect to where you live and what you do over the next 10 to 15 years?  Does your undergraduate debt affect your graduate school plans, if any? 
• Did the cost of education influence where you applied to school, or where you were able to attend?  How might you even out this inequity between the 1% and the 99% of Americans?
• If you are lucky enough to anticipate leaving college with no debt, how will you repay those who made it possible for you?  If you can't do that, how do you intend to pay it forward?
• According to the Marketplace piece, what consumer behavior does the real estate industry depend on?

Paul Piff's paper published last week in The Proceedings of the National Academy of the Sciences reported on a several studies of ethical behavior in 1,000 subjects across a range of social class levels in the United States.  Five of the studies were not directly business related:

• Driving behavior involving cars--Upper class individuals were 4 times more likely to cut off another car at a busy intersection
• Driving behavior toward pedestrians--Upper class individuals were 3 times more likely to dart in front of a pedestrian in a crosswalk
• Scenarios involving wrong-doing--Upper class individuals were more likely to report doing the same behavior themselves
• Taking candy from a candy jar for children--Upper class individuals took twice as much candy as lower class individuals when told it was OK to take some if they liked.
• Reporting dice scores--Subjects were given rigged dice that could not produce a total of more than 12 points in the assigned dice rolling game.  Upper class individuals were more likely to report higher-than-possible scores, indicating more willingness to lie and cheat. 

Two of the studies addressed business scenarios.  In one, subjects were given the role of an employer negotiating a contract with an employee who wanted long-term employment. The job, however, was going to be eliminated soon.  Upper class subjects were more likely to withhold this information from the candidate.

The results in the remaining study had a different predictor of results.  In this study, some subjects were given training regarding the advantages of greed. Then, both the trained and untrained subjects were shown workplace scenarios involving stealing money, overcharging customers, accepting bribes and other examples of "bad" workplace behavior. Regardless of class, the subjects trained in the advantages of greed were more likely to report a willingness to engage in the behaviors that produced more personal wealth. 

Follow up:

• Do the results of this study surprise you? Why or why not?
• How do you think you would respond if you were a subject of this research? How would you define your social class either by "gut-feel" or on the MacArthur Scale of Subjective Socioeconomic Status?
• What do you think is a better predictor of ethical behavior--family values, peer values or social class values?  In what ways do each of these groups influence an individual?
• How do marketers use information about social class in marketing goods and services? 

image from newshopper.sulekha.com

Production and consumption in China is outpacing the country's ability to process all of its garbage. Bettina Wassener's article, "in Hong Kong, a wasted chance to recycle glass," in NYT GLOBAL BUSINESS addresses one segment of this problem: too much used glass. The article focuses on one recycler, Green Glass Green, a small organization, and their main customer, Tiostone Environmental , which makes eco-bricks from the used glass.

However...in Hong Kong, the recycling rate for glass is 3 percent...because businesses there generally think that glass recycling is not cost effective--due to the weight of glass. But other countries are managing the hurdles. To put this figure in perspective, that article points out that :

• 90% of glass in Belgium, the Netherlands and Switzerland is recycled
• overall in the European Union, 67% of glass is recycled
• the US recycles about 1/3 of all glass containers

China is not doing a great job regarding environmental issues in general, and resource preservation in particular--even compared to their neighbors: Japan, South Korea and Taiwan. Hong Kong's rate of garbage generation increased 21.5% from 2004 to 2010. 

As landfill space runs out, this issue will become more pressing.

Follow up:

• Read further: here is a link to Recycling Facts. Compare the costs and opportunities associated with recycling aluminum, paper, plastics,  and glass. Which facts seem the most compelling to you?  Is there any way that you personally can make a difference?
• Read this list of Recycled Products.  Have you used any of them? Do any of them appeal to you? 
• Check out this link regarding mandatory recycling for businesses in California.  What do you think about these rules?

 Teri Bernstein and Elizabeth Warren; photo taken by anonymous fan of E.W., on blog-author's cell phone.

This is business news with a personal hook. I wrangled my way into a high-end fund-raising event--partly by earnestly giving money and partly by begging.  I was glad I did. When I spoke with Elizabeth Warren at the event, I told her I was a community college Accounting and Business instructor, and she told me to tell my students this story:

After she had been admitted to law school, and while she was caring for her infant daughter, Amelia, she figured she needed to learn a few things about business while she was waiting for her legal education to begin. She enrolled in her local community college, and took two accounting courses--Accounting 1 and Accounting 2.  Those gave her a good grounding in the "language of business."  Later in her career, when she was teaching at Harvard Law School, she found herself teaching "the MONEY courses."  This fueled her interest in research about the middle class...and her interest in the values shift in American politics that led to the formation of the Consumer Financial Protection Bureau...and in her run for a Senate seat.

When Elizabeth Warren spoke to the group assembled in Santa Monica, CA, she emphasized that the VALUES issues that were front and center at the end of the Great Depression are similar to the values issues that face us today. At the end of the Great Depression, the values that were supported included:

• Education...From 1939 to 1978, the GI Bill and the National Defense and Direct Student Loan funds assured that individuals could get an education if they gave service to their country, or promised to pay back low-interest loans.
• Infrastructure...building roads, bridges, arts projects...objects that would endure and make it easier for small business-people to get started.
• Regulation...Government ensured that the support of the middle class was the highest priority, and that government regulations of mega-businesses ensured that middle class values prevailed...and that monopolies and manipulation of regulations to favor businesses over people were not sustainable. 

Are these values still relevant to Business students today?

Follow up:

• Read about Elizabeth Warren's opponent. Scott Brown's positions on several issues are different, but if you have followed his career, you will see that running against Elizabeth Warren has made him more of a moderate.  How are the positions taken on business and financial issues similar and different when you compare those of Scott Brown and Elizabeth Warren?
• Have you taken Accounting Principles (or Intro to Financial and Managerial Accounting) yet? Have you checked out the Accounting text by Fess/Warren/Reeves ? (Note; the "Warren" is no relation to Elizabeth Warren)
• Are the values that were relevant in the 1930's still relevant today? [Education; Infrastructure; Regulation]