Chicago Booth in the News, Winter 2011, Vol. 2
(Covering January 4 to January 31, 2011)
Here are highlights of the latest Chicago Booth news coverage. The digest below represents only a portion of recent coverage.
Section 1: News coverage of Chicago Booth.
- FINANCIAL TIMES. Chicago Booth ranked first in placement success in the newspaper’s 2011 ranking of full-time MBA programs published January 31. Last
year Booth also ranked first in placement success. In this year’s ranking Booth was first in economics, second in finance and fifth in accounting. In the
overall ranking, Booth was sixth among U.S. schools, the same as last year. When non-U.S. schools are added, Booth ranked 12th compared with 9th last year.
The ranking was based on a survey of graduates from 2007.
- FORTUNE. Chicago Booth was featured in an article headlined “MBA hiring: Back with a vengeance,” published January 14. On-campus interview slots at
Booth this past fall were up 22 percent and job postings for MBAs and alums have risen nearly 30 percent, said Julie Morton, associate dean of career
services. “Students feel supported and confident, but not cocky, that things are going to work out for them,” she said.
- CHICAGO TRIBUNE. “New Booth dean Kumar to employ broad view,” was the headline of an article published January 27. His goal is “to enhance and broaden
the impact and reputation of the school. We have a deservedly good reputation for taking rigor seriously … So we want to broaden, but without giving up
this fundamental value. There’s no trade-off here.” The story ran on the front page of the business section and included a large photo of Dean Kumar. It
was based on his first interview since becoming dean.
- BLOOMBERG BUSINESSWEEK. A live, online chat about admissions to Chicago Booth was held on January 20 featuring Kurt Ahlm, senior director of
admissions, and Lauren Polo, MBA ’11. They fielded questions from prospective students on “strategies for landing a spot in the No. 1-ranked program,”
Businessweek wrote. Here is an edited transcript.
- CHICAGO SUN-TIMES. Chicago Booth’s strength in entrepreneurship was featured in an article published January 25. “Now students are coming to Chicago
Booth expressly for entrepreneurship,” Professor Steven Kaplan said. The article noted that three recent winners of Booth’s New Venture Challenge raised
“significant venture capital.” The companies are Bump Technologies, Watermelon Express and GrubHub.com. “It shows you the cool stuff coming out of
Chicago,” Professor Kaplan said.
- LE MONDE (Paris). Chicago Booth was featured in an article about the benefits of earning an MBA degree from a leading U.S. school. “Specialist degrees
offered by some business schools provide content knowledge that is most valuable at the start of one’s career,” Deputy Dean Kole said. “The MBA (offered by
Booth) offers that knowledge plus the broader understanding of organizations and how to lead,” she said. The typical Booth graduate in 2010 accepted a job
with a median salary of $102,000, the article noted. The story appeared in the newspaper’s January Master’s and MBA guide.
- FINANCIAL TIMES. Chicago Booth was featured in an article about changes in the admissions process at business schools, including the use of PowerPoint
slides, DVDs and other non-traditional formats. Since Booth introduced its “third essay” in 2008, Kurt Ahlm, senior director of admissions, says he’s seen
a variety of responses ranging from colorful, finely designed charts and data to one PowerPoint slide with just five bullet points. “The point is: there’s
not one approach. When students do this well, they think through what they’re trying to communicate,” he said in the article published January
- CHICAGO TRIBUNE. Chicago Booth was featured in an article about U.S. business schools that have international campuses. “With its storied reputation
for turning out Nobel Prize winners, it’s no surprise that the University of Chicago Booth School of Business has been offering executive MBA degrees in
Europe since 1994,” the article said. “Today, every executive MBA student rotates through all three campuses – London, Singapore and Chicago – as part of
their 21-month program.” The intercontinental exchange “gives students an opportunity to work in an academic setting with people from all over the world,”
said Patty Keegan, associate dean of the Executive MBA Program in North America. The article was published January 20.
Section 2: News coverage quoting Chicago Booth faculty.
- FINANCIAL TIMES (London). Professor Anil Kashyap wrote an op-ed headlined “Only tough reforms can save the land of the rising debt,” published January
21. “If Japan does not switch course voluntarily, it may soon find that financial markets will force changes upon it,” he wrote.
- THE NEW YORK TIMES. Professor Richard Thaler wrote the Economic View column January 23 headlined “Adding Clarity to Heath Care Reform.” The column
included three suggestions on how to improve the law even as lawsuits swirl around it. “There is an opportunity to improve health care and reduce
uncertainty, a Republican mantra,” Professor Thaler wrote.
- THE WALL STREET JOURNAL. Professor Anil Kashyap wrote an op-ed titled “A Growth Solution for Japan’s Debt Mess,” published January 26. Fiscal policy is
about more than taxes and spending – economy-boosting reform plays a role, too, he wrote. “The main question is whether the political will exists to
abandon policies that appease voters in the short run and focus on reforms that restore growth in the long run.”
- BLOOMBERG TELEVISION. Professor Raghuram Rajan discussed the U.S. and global economy during a joint interview with Kenneth Rogoff, a professor at
Harvard, at the World Economic Forum annual meeting in Davos, Switzerland. “The recovery (in the U.S.) is in place,” Professor Rajan said. “The real
question is when do we start removing the stimulus.” The interview took place January 28.
- THE ECONOMIST. Professor Raghuram Rajan’s argument that increased inequality of income – more precisely, the political response to it – helped to cause
the financial crisis was featured in the Economics Focus column January 20. “Mr. Rajan thinks it was no coincidence that America in the early 2000s saw a
boom in lending to the poor, including those folks that banks used to sniff at,” the article said. Research by Associate Professor Amir Sufi was also
featured in the column.
- THE ECONOMIST. Professor Raghuram Rajan wrote a response to criticism of his views on income inequality (see item above), published January 26 in the
Free Exchange section of the magazine’s website.
- THE WALL STREET JOURNAL. Professors John Cochrane and Douglas Diamond were quoted in an article headlined “More Bank Reforms Needed, Economist Say.”
New rules in the U.S. aggravate the problems by providing authorities with too much discretion in deciding whether to save big banks that get in trouble,
Professor Cochrane said in the January 9 article. “The incentive for the banks is to be as big, as systemically dangerous as possible” so the government
will have no choice but to bail them out, he said. Professor Diamond said that while regulators are requiring banks to keep more cash on hand to cover
their debts, they have done little to prevent the kind of short-term borrowing that can lead to trouble. Professors Cochrane and Diamond made their
comments at the annual meeting of the American Economic Association.
- THE GUARDIAN (London). Professor Raghuram Rajan published an op-ed headlined “The U.S. unemployment challenge,” January 11. “The history of recent
recessions suggests that we should not be surprised that the job recovery is taking time,” he writes. “There is, however, an aspect of the problem that is
different this time: layoffs in construction. Therein lies an additional explanation for tepid job growth.”
- THE NEW YORK TIMES. Research by Professor Ann McGill and Sara Kim, a Booth Ph.D. student, was featured in an article headlined “Feeling Powerful and
Taking Risks,” published January 2. In the study, one group of subjects was asked to recall a time when they felt powerful, and the other a time when they
felt powerless. Then the subjects looked at a picture of a slot machine, which had been rigged to look either human or nonhuman, and rated the riskiness of
the game and their willingness to play. The people who had been led to feel powerful were attracted by the humanoid machine and thought it lower in risk
than the nonhumanoid machine, while the powerless people found the humanoid machine unattractive and risky.
- THE NEW YORK TIMES. Professor John Cochrane was quoted in an article headlined “Fed’s Crisis Investments Are Showing Big Returns,” published January
10. Interest income from the Fed’s investment portfolio has produced record profits for the Fed for two consecutive years, the article said. But over time,
when economic conditions improve, the portfolio could become a risk, because the investments could lose value when interest rates eventually rise. “From
the taxpayers’ view, I think it is a mistake to make much of this number either way,” Professor Cochrane said. “The Fed is acting like a huge hedge fund on
our behalf. It is borrowing at very low short-term rates and investing in long-term government bonds, mortgages and other risky loans. It made a profit on
those investments last year, but it is bearing a lot of risk.”
- THE NEW YORK TIMES. Research by Assistant Professor Oleg Urminsky on how we choose when trading off consumption or happiness in the immediate future
with more consumption or happiness delayed to the more distant future was published January 1. Part of the research involved offering subjects a $120 gift
card in a week or a $240 gift card in a year. Whether it’s a decision about career, health or spending time and money, “maximizing current welfare and
maximizing lifetime welfare are often in conflict,” Professor Urminsky wrote. The Times called the research “provocative.”
- THE WALL STREET JOURNAL. Research by Assistant Professor Michael Minnis was featured in an article headlined “Audits Add Shine to Firms; Study Finds
Certified Financial Statements Help Businesses’ Loan Prospects,” published January 13. “There appears to be a very real cost benefit to getting an audit,
beyond the obvious value of having your financial statements in order,” Professor Minnis said.
- FINANCIAL TIMES. Professor Raghuram Rajan published a short commentary about one of his favorite business books December 29. “One of the books that has
influenced my thinking on business is Religion and the Rise of Capitalism (1926) by R. H. Tawney, the British economic historian and social critic,”
Professor Rajan wrote. “In this book, perhaps his most famous, he traces the church’s attitude towards profits, and how that changed over time – how we
moved from an environment where even the morality of a small amount of profit was questioned to one where the unbridled pursuit of profits, if legally
obtained, is celebrated.”
- CNBC TELEVISION. Professor Randall Kroszner discussed changes in the make-up of the Federal Open Market Committee and how that might impact U.S.
monetary policy during an interview broadcast January 4. “It’s perfectly fine to have some dissent (on the Fed),” he said. “I even think it’s a positive to
have some dissent.” Professor Kroszner was a governor of the Federal Reserve System from 2006 to 2009.
- THE NEW YORK TIMES. Professor Anil Kashyap was quoted in an article about the findings issued by the Financial Crisis Inquiry Commission. “The
commissioners’ failure to agree on most of the causes and narrow their differences to a handful of issues does the country a great disservice, by
perpetuating the idea that reasonable people cannot understand what happened, Professor Kashyap said, adding that most economists are in basic agreement on
the factors that caused the crisis. The article was published January 29.
- BBC NEWS. Professor Raghuram Rajan was featured in a story filed from the World Economic Forum in Davos, Switzerland, where he appeared on a panel
consisting of “five of the world’s top economists.” He discussed why economic forecasts are so hard to get right. When he was chief economist at the
International Monetary Fund “we always failed to predict the (economic) turning point,” Professor Rajan said. “We were always wrong on Africa,” he said.
His team would issue a forecast for the continent, then conflict would break out somewhere, making the local economy plummet 20 percent, wrecking the
prediction, he said. The story was posted on the BBC’s website January 26.
- BUSINESS STANDARD (India). Professor Raghuram Rajan told an audience at the World Economic Forum in Davos, Switzerland, that India should not follow
the U.S. “blindly” on the environment, according to an article published January 28. “Environment protection is important, but the question is whether you
can stretch it beyond a point. At this stage of development, India needs factories as well,” Professor Rajan said.
- CHICAGO TRIBUNE. Clinical Professor James Schrager was quoted in an article about Sara Lee’s decision to split into two companies. The split looks like
“the first step in a plan to make the segments much more marketable to outside investors or other companies,” he said. The restructuring also could be a
way for each half of the business to improve its performance as a more focused entity. The article was published January 29.
- THE NEW YORK TIMES. Professor Raghuram Rajan was quoted in an article headlined “Can India Leapfrog China?” published January 26. Despite a 1.1
billion-strong population, India is facing talent shortages – and not just at the very top, the article said. “We’re running out of electricians and
plumbers because our education system is not keeping pace,” Professor Rajan told a session at the World Economic Forum in Davos.
- THE WALL STREET JOURNAL. Professor Randall Kroszner was quoted in an article headlined “More Hiring Expected as Gloom Starts to Lift,” published
January 24. U.S. companies are optimistic about the economy and plan to hire more workers in coming months, a quarterly survey by the National Association
for Business Economics found. “The economy is potentially at a turning point in job creation,” Professor Kroszner said.
- XINHUA NEWS (China). A feature article about Professor Luigi Zingales headlined “U.S. professor says U.S.-China cooperation to yield more integration,”
was published January 11. “There is a lot of gain from trade between China and the United States,” Professor Zingales said. He urged China to invest in
American real assets and companies, rather than to buy government paper. “It will have benefits for both countries. China will get high return on its
investment, and for the U.S., it will reduce the cost of capital and force the government to be more disciplined and borrow less.”
- ASSOCIATED PRESS. Professor Steven Kaplan was quoted in an article headlined “In management shuffle, Google tries to hold off threat – and get back
that startup feel,” published January 21. While the free-wheeling attitude shown by Google’s top executives typically works well at small companies, it
could cause problems in a company as large as Google, he said. “The risk is that if you take away the process, that in some sense you go back to a kind of
- BLOOMBERG TELEVISION. Professor Randall Kroszner talked about the Federal Reserve Board’s quantitative easing program during a live interview January
4. “What the Fed was doing with QE2 was worrying about the potential for downside risk, in particular the potential for deflation,” he said. “They bought
some insurance against that by buying more assets. One of the things that is going to do is to start to boost up inflation expectations a little bit.
That’s what they (the Fed) hope.”
- ABC TELEVISION. Assistant Professor Emily Oster appeared on Good Morning America in a story about the Mega Millions lottery jackpot reaching $330
million. Although the odds of winning the top prize are about 1 in 176 million, “It’s a level of fantasy we all engage in,” Professor Oster said. “Somebody
will win, it could be you.” The story was broadcast January 4 and an updated version was posted on the ABC News website.
- THE NEW YORK TIMES. Professor Raghuram Rajan was quoted in an article about the revolving door between Washington and Wall Street. One reason for
popular suspicion of the ties between policy makers and financiers was the 2008 bank rescue, he said. “How do you explain a bank bailout when you have
foreclosures on Main Street,” Professor Rajan said. “When you try to explain the intellectual rationale, you sound like a stooge for the bankers.” The
article was published January 14.
- U.S. NEWS & WORLD REPORT. Research by Professor Nicholas Epley was featured in an article headlined “Close Relationships Sometimes Mask Poor
Communication: People may think loved ones understand them better than they actually do,” published January 24. “Our problem in communicating with friends
and spouses is that we have an illusion of insight,” he said. “Getting close to someone appears to create the illusion of understanding more than actual
- THE WALL STREET JOURNAL. Professor Randall Kroszner was quoted in an article about the 1841 depression in the U.S. when eight states defaulted on
debts. Could states default today without causing another 1841, he was asked. It’s a long shot, Professor Kroszner said. “Only if there were a clear legal
framework, and a clear way in which people would be treated, and not interminable delays through the courts. States should be very averse to defaulting.”
The article was published January 4.
- THE NEW YORK TIMES. Professor Christian Leuz was quoted in an article about how Goldman Sachs’ purchase of Facebook shares looks like a way to
circumvent a 1964 law that limits the number of shareholders in a private company. “We’ve lowered the bar for certain types of investors that we felt need
less protection,” Professor Leuz said in the January 5 article, referring to hedge fund and private equity investments. “But maybe what we’ve learned in
recent years after the financial crisis is that sophisticated doesn’t always mean high-net-worth.”
- CNBC TELEVISION. Research on Microsoft by Clinical Professor James Schrager was featured in a report broadcast January 27. The company should be broken
up because it’s too unfocused, he said. It appears to have no strategy, is trying to do too many different things and failing at most, and it should focus
on the things it does best: Office and Windows, according to Professor Schrager. Winners are companies that focus, like McDonald’s, he said.
Watch the video
- REUTERS. Professor Raghuram Rajan was quoted in an article headlined “Economists Foretell of U.S. Decline, China’s Ascension,” published January 10.
Even though Asia’s emerging markets will continue to strengthen, he still envisions an ongoing U.S. leadership role in the world. Nothing proceeds in a
straight line, he said, and there are many pitfalls along the way even for dynamic Asian economies. “I would say the age of American dominance may be
nearing an end. But America as the biggest mover will be in place for a long time.”
- CHICAGO TRIBUNE. Clinical Professor James Schrager was quoted in an article about Ford Motor Company’s recent success. CEO Alan Mulally’s plan to save
Ford was well done, but it hasn’t been tested yet by an unforeseen event that throws off the strategy, such as a huge gas price increase, Professor
Schrager said. “There are a lot of things that happen outside of Ford’s control that determine if they go from boom to bust,” he said. “What I haven’t seen
yet is if they know how to deal with these large exogenous changes that will happen to them from time to time.” The article was published January
- CHICAGO TRIBUNE. Professor James Schrager was quoted in an article about the recent break up of Fortune Brands, Motorola and ITT, and the potential
sale or split up of Sara Lee Corp. Managers must demonstrate an ability to have an “unfair advantage” in their brand categories, Professor Schrager said in
the January 12 article. “The managers that can make those brands sing get to keep them,” he said. The ones that can’t eventually have to get rid of them
or, in (Sara Lee’s) sad case, die by the sword.”
- FOX SMALL BUSINESS.COM. Clinical Associate Professor Ira Weiss was quoted in an article offering advice to entrepreneurs seeking capital. “Create an
advisory board and use it for contacts,” he said. “Try to get people interested in what you are doing and ask them for guidance. Pitch your idea to
industry experts. Favor business models that generate cash sooner. Get external validation for your idea. The best way is through creating a product or
service and securing customers that can be references. Finally, bootstrap, bootstrap, bootstrap.” The article was published January 4. Professor Weiss is
faculty director of the Hyde Park Angels, an angel investing group.
- BLOOMBERG NEWS. Professor Steven Kaplan was quoted in an article about Goldman Sachs’ $450 million investment in Facebook Inc., a company that Goldman
discouraged its employees from accessing while at work because of its social-networking focus. The bank’s investment in a company whose product it
disfavors is “amusing,” though it makes sense, Professor Kaplan said. The article was published January 4.
- THE TELEGRAPH (London). Research by Professor Nicholas Epley was featured in an article headlined “Couples Sometimes Communicate No Better Than
Strangers,” published January 21. “Our problem in communications with friends and spouses is that we have in illusion of insight,” he said. “Getting close
to someone appears to create the illusion of understanding more than actual understanding.”
- DESERET NEWS (Salt Lake City, Utah). The new book by Professor Tobias Moskowitz was featured in an article headlined “New book combines sports,
economics in fascinating way,” published January 22. “’Scorecasting’ is a must-read for all aficionados of sports or economics because of the refreshingly
unique way it analyzes the former through the lens of the latter,” the article said. Professor Moskowitz co-wrote the book with Sports Illustrated reporter
- POST-GAZETTE (Pittsburgh). “The most important and fascinating sports book in years has been written by an odd couple: Tobias J. Moskowitz is a
professor of finance at the University of Chicago while L. Jon Wertheim, a distinguished tennis writer, is a professor at Princeton University,” a January
21 article said. “’Scorecasting’ is the sports equivalent of ‘Freakonomics,’” the article said.Read more
- THE NEW YORK TIMES. “What is unique about ‘Scorecasting’ (the new book by Professor Tobias Moskowitz) is that is has the unusual mix of hard-nosed data
analysis, unconventional wisdom and breezy storytelling …,” according to post on the Freakonomics blog written by Steven Levitt, co-author of Freakonomics
and a professor in the Department of Economics at the University of Chicago. The item was posted January 25.
- WGN-TV (Chicago). Professor Tobias Moskowitz discussed his new book “Scorecasting” during a five minute interview broadcast January 24. Read more
- NPR WEEKEND EDITION. Professor Tobias Moskowitz and “Scorecasting” were featured January 29 during a 7-minute interview. Read more
- BLOOMBERG NEWS. Professor Steven Kaplan was quoted in an article headlined “Obama Keeps Corps of Corporate Friends Close Amid Criticism From Business.”
Even though President Obama’s relationship with U.S. business has been strained at times, he has kept a coterie of business leaders in his orbit, the
article said. “You’d rather be at the table than not at the table,” Professor Kaplan said. “You figure this is a way to do something useful for your
country.” The article was published January 24.
- AMERICAN BANKER. Professor Luigi Zingales’ proposal to use credit-default swaps to solve the “too big to fail” problem in the banking industry was
featured in an article published January 20. This daily newspaper called the plan “an intriguing idea.” House Budget Committee Chairman Paul Ryan “is a big
fan of the proposal,” Professor Zingales said. “I’ve met with him and spoken with other Republicans. They want to legislate out ‘too big to fail.’” The
article was published January 20.
- BLOOMBERG RADIO. Professor Randall Kroszner discussed the Federal Reserve Board’s decision to continue buying government bonds to boost the recovery
during an interview January 26. “We’re just not seeing a lot of job growth yet,” he said.
- LA TERCERA (Santiago, Chile). Professor Richard Thaler was featured in a Q&A interview published January 16.
- CITY JOURNAL. Professor Luigi Zingales wrote an article headlined “How to Improve the Financial-Reform Law; A brief proposal to protect the system –
without stifling innovation,” published in the Winter issue of this magazine of the Manhattan Institute
Section 3: Chicago Booth students and alumni in the news.
- FINANCIAL TIMES. Lauri Joffe Turjeman, MBA’ 11 was quoted in an article headlined “MBA employment crisis eases but anxiety remains,” published January
31. She thought hard about giving up her legal career in Israel but decided to enroll at Booth and move into business, the article said. “I did have
concerns. That’s why it was critical for me to go to a highly ranked school because I felt like the economy was going to be rougher on the lower-ranked
schools.” She now has three offers in hand after the end of the on-campus recruiting cycle, all of which meet her salary expectations, according to the
- ASSOCIATED PRESS. Charles Plosser, Ph.D. ’76 has become a voting member of the Federal Open Market Committee, the Federal Reserve’s main policymaking
group, according to an article published January 24. Plosser is president of the Federal Reserve Bank of Philadelphia.
- THE WALL STREET JOURNAL. Antoine Farris, MBA ’06 was featured in an article headlined “The Jungle: New Model for Work-Life Balance on Wall Street.”
After working for a bulge-bracket bank, Farris now works for Accordion Partners where employees can choose their assignments, and, consequently, set their
own work hours, according to the article.
- BLOOMBERG BUSINESSWEEK. Mary Phillips, MBA ’12 was quoted in an article about the job market for new MBAs. “From what I’ve been hearing, for people who
are interested in sales and trading at an investment bank, it’s a pretty tough area right now to get into,” she said. A similar pattern was spotted at
Wharton, according to the article.
- BELLEVILLE (IL) NEWS-DEMOCRAT. Michael Girsch, MBA ’03 was promoted to assistant general manager of the St. Louis Cardinals, according to an article
published January 7. Previously he was director of baseball operations for the team.
- CHICAGO TRIBUNE. FeeFighters, a company launched at Booth by Sean Harper ’09 and Joshua Krall ’09, raised $1.6 million in a new round of funding,
according to an article published January 12. FeeFighters’ service lowers credit card processing fees by an average of 40 percent for small businesses,