MBA, not PC

During the 1990s, there was a lot of hullabaloo about political correctness, a thing that simply did not exist. I remember picking up a couple of books on political correctness back then, and all of them were actually attacks on it. One of them had even been originally published as a series of satires in Playboy magazine, and another had actually made up most of the things it was complaining about and attributed to them to the fictitious "Hyphen Society." To this day, I have failed to find any book or campaign that genuinely supports political correctness.

Granted, there was some laughable pamphlet from some liberal arts college I had never heard of that honestly attempted to tell undergrads how to avoid sexual harassment, but any such things that did crop up were ridiculed -- they had no power over me, much less over the culture at large.

What did have power over the culture at large was microeconomic thinking, with more and more people getting MBAs -- and fewer and fewer people studying English (and foreign languages), where most of these allegedly pernicious gender studies and the like were taking place.

Now, an English professor in the US has published some figures showing the relative shift in influence from the early 1970s to the early 21st century:

In one generation, then, the numbers of those majoring in the humanities dropped from a total of 30 percent to a total of less than 16 percent; during that same generation, business majors climbed from 14 percent to 22 percent.

The rise of business majors is especially unfortunate because MBAs are taken to be economists. In reality, they are more bookkeepers than economists. When you get an MBA, you learn essentially to run a business, and that entails balance sheets -- income versus expenses, assets versus liabilities. The thinking is in/out, not circular.

For society at large, this thinking at the level of an individual business is inappropriate. Money circulates in a society, so the consideration of the cost of something is different in macroeconomics than it is in microeconomics. In microeconomics (MBA), you want to lower costs because you lose that money, but in macroeconomics that money is not (necessarily) gone -- it depends on how you spend it. A company may want to lower wages to cut costs, but a government might want to raise the minimum wage to keep consumer spending up.

But the most pernicious thing about MBAs as opposed to macroeconomics is the relative lack of discussion about society altogether. While I am not naïve enough to believe that macroeconomics is purely about ethics, the entire discussion is at least attempt focused on finding a way to keep the national economy healthy, whereas MBAs are just about making money yourself. Is it any wonder, then, that we have things like Enron and the current banking crisis?

The problem, therefore, is not that the influence of politically correct humanities, but rather the increasing influence of MBA thinking. Even a shift towards macroeconomics would help. I'd be willing to bet that very few Americans who have studied "economics" have actually focused on macroeconomics. Though I cannot find any figures right off, I bet almost all of them are MBAs, i.e. microeconomists.

The situation is the same in Germany, where the University of Freiburg is the only one in the country that offers a PhD in macroeconomics.

Who's responsible for what?

A former speechwriter for George W. Bush has just published his memoirs, and an excerpt was put up online at GQ. At one point, the author remembers how former President Jimmy Carter was the only one who was willing to help out Bush at the beginning of the financial crisis a year ago:

It was just one more humiliation. First the administration had had to seek out Carter’s help, and then the White House had been schooled on the economy by the president who’d brought you gas lines, an energy crisis, and high unemployment.

How is it that Carter is responsible for the gas lines and energy crisis of 1979, but no one ever talks about the gas lines of 1973, which happened during the Nixon administration? Often, there is talk about whether the sitting president was just there when something happened or whether that person's politics helped bring about the event -- was George Bush Senior just the rooster that crowed when the Berlin wall fell, or did his policies help bring about that change? Was there something special about Bill Clinton's economic policies, or would any president elected in 1992 have had the same success because the Internet was about to boom anyway?

In the case of Carter and Nixon, I'm afraid the evidence is not good -- for Nixon. While Jimmy Carter faced a revolution in Iran that was not directly related to any of his policies (though it was indirectly related to US support for the Shaw of Iran over several decades, including his administration), Richard Nixon reacted to the crisis in 1973 (brought about by US support for Israel) by instituting price controls in a step that seemed to fly in the face of general Republican policy. As energy group Daniel Yergin once put it, these price controls were

not the handiwork of left-wing liberals but of the administration of Richard Nixon, a moderately conservative Republican who was a critic of government intervention in the economy.

So if Carter is responsible for the economic downturn at the end of his term, the case is all the stronger for Nixon to be held accountable for what happened in 1973.

And while we are at it, why are Bush and Cheney so rarely held accountable for the attacks on 9/11? As Harper's Scott Horton put it yesterday:

Defenders of former president George W. Bush now focus their efforts on claims that he enhanced the nation’s security. There aren’t many objective metrics for assessing security, but there’s only one they use over and over again: 9/11 did not recur on his watch. One weakness of this argument is that 9/11 did not occur on the watch of any of his predecessors, either.

Solar jobs in Baden-Württemberg

Germany consists of 16 states, and Baden-Württemberg is the one furthest to the southwest. It is also the one where I am living -- in Freiburg, which claims to be the solar capital of Germany.

Actually, there is not much here in terms of industry, most of which is found in Germany's Solar Valley (here's an article from the New York Times from two years ago on that). Nonetheless, as the state's Economics Ministry made clear a few weeks ago, photovoltaics has created a large number of jobs in this state:

• 1,350 in the manufacture of silicon, cells, modules, and other components (such as inverters)
• 4,025 jobs at suppliers
• 3,450 solar contractors
• 470 wholesalers
• and 660 researchers

That's around 10,000 new jobs. A total of 3.4 billion euros was made in the sector last year, and that figure is expected to rise to 3.6 billion this year and to 5.5 billion by 2012 -- all of these are figures from the Economics Ministry, which is probably skeptical of the sector overall.

Incredibly, Baden-Württemberg alone had 1,074 megawatts of solar online at the end of 2008, producing around one billion kilowatt-hours of electricity. In comparison, the United States had a total installed PV capacity of only 800 megawatts at the end of 2008, a full 25% less than tiny Baden-Württemberg -- a fact that the US solar sector likes to hide by claiming, "Installed solar power capacity in the United States rose by 17 percent to 8,775 megawatts in 2008" -- but that figure includes all kinds of solar, including pool heating, etc., none of which is included in the figure for Baden-Württemberg.

Thomas Friedman sings my song

In an article at the New York Times, Friedman wonders why an American solar firm has set up so many plants abroad, mainly in Germany. His answer:

... their governments have put in place the three perquisites for growing a renewable energy industry: 1) any business or homeowner can generate solar energy; 2) if they decide to do so, the power utility has to connect them to the grid; and 3) the utility has to buy the power for a predictable period at a price that is a no-brainer good deal for the family or business putting the solar panels on their rooftop.

Excellent synopsis! At present, American citizens are largely unable to invest in renewables and get a return on their investment at all. Instead, utilities are required by law in most states to get a certain share of their energy production from renewables. Community-driven projects are few and far between in the US, so Americans can only really invest in solar companies on the stock market if they want to become part of the act...

I have also written here several times about the criticism of "green jobs," and Friedman comes in very nicely on this one:

If you read some of the anti-green commentary today, you’ll often see sneering references to “green jobs.” The phrase is usually in quotation marks as if it is some kind of liberal fantasy or closet welfare program (and as if coal, oil and nuclear don’t get all kinds of subsidies). Nonsense. In 2008, more silicon was consumed globally making solar panels than microchips...

I suppose I should not be too surprised to read this from him. After all, he is the guy who said many years ago, "If you want to drive a Hummer, go to Iraq." But it is nonetheless always nice to see some content that could have appeared in this blog in the New York Times.

All you need to know about US politicians...

.... was summed up recently by Col. Lawrence Wilkerson, former Chief of Staff to Secretary of State Colin Powell:

Cheney is the kook leader. But [Nancy] Pelosi and [Harry] Reid are such feckless leaders they haven’t got any spine. We have no leadership in the legislative branch on either side of the aisle.

So the Republicans are frat boys who are loyal only to themselves. And the Dems are spineless careerists who cannot lead even if you give them both houses of Congress and the White House.

Kids

Before I get back to my usual ranting, I have a follow-up for yesterday's post. It occurred to me that that explanation of the correlation between spending money and happiness goes a long way towards explaining why people who have children generally find the experience so enriching, though in monetary terms the situation can only be seen as impoverishing.

Being able to provide for my children's needs -- and a sufficient part of their wants -- is one of the most rewarding things in my life, and I am sure that not being able to do so would be equally devastating.

He's baaaack... and happy

In my first day in the office after three weeks on the road (thanks to Eva for the mobile Internet access in the UK), I stumbled across the following in an article at the Boston Globe:

... when it comes to spending money, we tend to value goods over experiences, ourselves over others, things over people. When it comes to happiness, none of these decisions are right: The spending that make us happy, it turns out, is often spending where the money vanishes and leaves something ineffable in its place.

Yesterday, I took my usual jog along a nearby stream, around a pond, and out to the margins of the Rieselfeld neighborhood overlooking the wild natural edge of Freiburg, where development has been banned. As I followed the path through the rows of trees in the park, past the rabbits in the bushes, I could not help but think of the beauty of the English Gardens I saw on my three-week trip to England, especially Bowood and Stourhead. Though Freiburg's parks pale in comparison to these unique English gardens, somehow those English landscapes were so beautiful as to project themselves onto my mundane jogging route.

The model new housing development in Rieselfeld attracts urban planners from around the globe, and I often act as an interpreter on such visits. My colleague Stephen brought me to Prince Charles' development, called Poundbury, near Dorchester. Both developments are intended to be special in some way, and both have raised some eyebrows. But I jogged through Rieselfeld with different eyes yesterday.

In the wake of global economic turmoil, I stood in a banking high-rise in the middle of London's Canary Wharf and talked to my friend Andrew about his fears he had this year of losing his job, which he really likes. It was interesting for me to stand in one of the centers of the banking world that has caused so many people so much grief over the past year and see things through the eyes of a guy I met 10 years ago under much different conditions. The world he works in is an attractive one, indeed. Too bad it is run by people who no longer live in a society with the rest of us. But I could certainly see that world from his perspective, and it looked enviable.

I blew a lot of cash on this trip -- probably more than on any trip before, with the exception of my trip to New Orleans four months after Katrina, when the city only had 20 percent of its population and I left 20 dollar tips in an effort to pump some modest funding back into my hometown. So when I read that article at the Boston Globe, I realized that I had done the right thing spending so much money on spending time with other people in England. Aside from some T-shirts, I have little to show from my trip, but it somehow changed a part of me. Maybe it was all the smiles and common experiences along the way. And hey, even 1000 kilometers from home I still had six people singing happy birthday to me!