I have a friend with school-age children who is a professional in a fairly lucrative field. The spouse is in a nonlucrative field. My friend chose to work fewer hours to spend time with their growing children, greatly reducing the family’s take-home pay in the process. This friend wanted the kids to go to an expensive private school that has a scholarship program with income requirements to qualify for student aid. Aid was applied for and received. I feel that it is inappropriate to use scholarship funds when the lack of income was merely a choice and not a circumstance. That scholarship money (which is limited) could have gone to a parent who had no capacity to make more money, regardless of effort. Do you think it was right that this friend received scholarship funds? Name Withheld Your letter scrupulously avoided specifying the genders of the parties. That’s helpful, because I have a hunch that many people would respond more sympathetically to a woman who decided to … [Read more...] about Should Kids Whose Parents Could Earn Higher Salaries Get Financial Aid?
EARNING THE ROCKIES How Geography Shapes America’s Role in the World Well over half of American voters, having cast ballots for Hillary Clinton or minor-party candidates, awoke the next morning to a country that seems not only unfamiliar but upside-down. Populists embrace a celebrity billionaire, evangelicals welcome a foul-mouthed Lothario, conservatives accept an opportunist whose only ideological commitment is to himself. The Republican establishment proves helpless against the hijacking of the party, the mainstream media prove ineffectual against the tide of fake news and the political system proves vulnerable to the machinations of a sinister foreign government. Longstanding global alliances are questioned, longstanding political norms are trashed — and then the candidate with the three-million-vote plurality loses. In what alternative universe does this make any sense? As Karl Marx said, in a very different context: All that is solid melts into air. Or maybe not. … [Read more...] about September’s Book Club Pick: ‘Earning the Rockies,’ by Robert D. Kaplan
London (CNN Business)1. Fed sparks market sell-off: The Dow slumped to the lowest level of the year on Wednesday after the Federal Reserve raised interest rates and indicated it expects more hikes next year. The index declined 352 points, or 1.5%. The S&P 500 fell 1.5%, while the Nasdaq dropped 2.2%. Investors had been hoping the Fed would signal a more significant slowing of rate hikes in 2019 due to signs of economic weakness. Most Fed governors said they expect to hike rates twice next year, after hiking four times this year. Fed Chairman Jerome Powell said the economy at the end of the year was "more subdued than most expected," and recent "developments signal softening" in the economic outlook. Wall Street was also unnerved by Powell's comments about continuing to shrink the central bank's balance sheet. The pain extended to global markets: European stocks opened sharply lower on Thursday, with major indexes dropping around 1.5%. Stocks in Asia finished the trading session … [Read more...] about Central bank action; Latest on Carlos Ghosn; Nike earnings
Tensie Whelan is founding director of NYU Stern's Center for Sustainable Business and clinical professor of Business & Society. The opinions expressed in this commentary are her own. This story originally published on August 23, 2018. Last week, President Donald Trump suggested in a tweet that companies could report results every six months instead of quarterly. "That would allow greater flexibility & save money. I have asked the SEC to study!" he tweeted. Quarterly reporting seems like a good thing — transparency ensures informed decision-making by investors. And critics of Trump's idea have cited concerns over a lack of transparency leading to increased investor risk. Yet in practice, quarterly reporting has evolved into a system of managing primarily for the quarterly numbers, with a net result of distorting financial performance negatively, much in the way teaching students solely to perform well on a standardized test distorts their learning. The focus on … [Read more...] about Why quarterly earnings reports should go
David Zaring is an associate professor of legal studies & business ethics at The Wharton School of the University of Pennsylvania. The opinions expressed in this commentary are his own. This story originally published on August 23, 2018. President Donald Trump has asked the SEC to consider requiring publicly traded companies to disclose results twice per year, rather than quarterly. "That would allow greater flexibility & save money. I have asked the SEC to study!" he tweeted last week. He's not the only one to favor the idea. Executives of publicly traded companies often complain about the short-termism wrought by quarterly reporting requirements. Indra Nooyi, the soon-to-be-retired CEO of Pepsi, suggested a harmonization with the European financial system, which did away with mandatory quarterly reporting in 2013. Elon Musk, the CEO of Tesla, has complained bitterly about the importance of meeting quarterly earnings targets. Warren Buffett and Jamie Dimon have also come … [Read more...] about Why quarterly earnings reports are a necessary evil