Booth in the News; Winter 2012, Vol. 3
(Covering January 19 to February 3, 2012)
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.
- THE WALL STREET JOURNAL. The latest Chicago Booth/Kellogg School Financial Trust Index made news January 26 in an article headlined “Economists vs. Americans.” This time “the Financial Trust Index took its responses from average Americas to a series of economic assertions and put them up against the responses from an expert panel of economists,” the article noted. “The results are striking.”
- FINANCIAL TIMES. The art collection on display at Harper Center was featured in an article headlined “Art for art’s sake?” published January 27. “Our interest is to open students’ minds to the idea that you can make a statement in a way that is not always literal and not always obvious,” said Professor Canice Prendergast, who is closely involved in the collection’s development.
- FINANCIAL TIMES. Booth ranked third in placement success in an annual ranking of the world’s top 100 full-time M.B.A. programs published January 30. In the overall rankings Booth was 6th among U.S. schools and 12th when international schools were included. Both are the same as our rankings last year. The top schools this year are 1) Stanford, 2) Harvard, 3) Wharton, 4) London Business School and 5) Columbia.
- THE ECONOMIST. The dramatic growth of entrepreneurship at Booth was featured in an MBA Diary article written by Richard Taveira, M.B.A. ’13. It’s no longer just an academic exercise, he wrote. “In the past 18 months, some 14 start-ups founded by Booth students have received over $135 million in funding by venture capitalists.” The article was published January 20.
- FINANCIAL TIMES. Booth was one of the schools featured in an article on business school students who bring a spouse or family with them. Booth’s Partners Club and Parents of Little Ones (POLO) were included in the article, published January 30. Jessica Pounds, director of diversity affairs and student programs, explained that Booth provides a variety of support for students with families.
- THE WALL STREET JOURNAL. An article devoted entirely to Booth’s Economic Experts Panel headlined “No Support for Gold Standard Among Top Economists,” was published January 23. “Love of the gold standard implies macroeconomic illiteracy,” said Professor Anil Kashyap. “Why tie to gold? Why not 1982 Bordeaux?” asked Professor Richard Thaler. The Economics Experts Panel is a service of Booth’s Initiative on Global Markets.
Section 2: News coverage quoting Chicago Booth faculty.
- BLOOMBERG NEWS. Professor Richard Thaler published an op-ed titled “Corporate Citizens Can Do Well by Doing Good,” January
25. “Yes, corporate officers have a duty to their shareholders, but they may also want to sleep well at night,” he wrote. “Strategies that
enrich shareholders at the expense of customers, employees, neighbors or the environment require scrutiny. The bottom line isn’t the only line to
- TIME MAGAZINE. Professor Raghuram Rajan published an op-ed titled “Too Big to Save? Bailouts hurt capitalism. How we
can keep from needing them in the first place,” January 19. “When everyone expects losses for the very big to be socialized, not only does capitalism
lose its key virtue of allocating resources well and incentivizing their proper use; it also loses public legitimacy,” he wrote. “Ordinary
citizens find it difficult to understand why they should pay their debts, especially when they are so much closer to subsistence than rich bankers
- BLOOMBERG NEWS. Professor Luigi Zingales published an op-ed titled “ECB Loosening Could Ensure Italy’s Fiscal Rigor,” January
18. “Now is the time for the European Central Bank to loosen its monetary policy,” he wrote. “I have never been a fan of loose monetary policy
… Yet, I do believe that a central bank should intervene when the fear of a sovereign default risks becoming self-fulfilling, as is the case now in
- THE AMERICAN. Professor Steven Kaplan published two commentaries, “How Many Jobs Did Romney Create at Bain?” and “How to Think
About Private Equity,” in this magazine from the American Enterprise Institute. “The companies Bain Capital funded under Romney have created tens of
thousands of jobs using any measure,” Professor Kaplan wrote in the articles published January 18 and 19.
Read first article
- TODAY (Singapore). Professor Raghuram Rajan published an op-ed titled “A crisis in two narratives,” January 31. “The
advanced countries have a choice,” he wrote. “They can act as if all is well, except that their consumers are in a funk and that ‘animal spirits’
must be revived through stimulus. Or they can treat the crisis as a wake-up call to fix what debt has papered over in the last few decades.”
- BLOOMBERG NEWS. Clinical Professor Michael Gibbs published an op-ed about the ingredients for a successful corporate
merger. “The acquiring company should have an integration plan ready before the deal is announced, and then implement quickly and forcefully,” he
wrote. “The merger should focus on the key talent in both organizations: identifying who they are and why they are valuable, and then finding ways to
keep them and get them to collaborate with each other.” The op-ed was published February 1.
- THE WALL STREET JOURNAL. An entire article devoted to research by Associate Professor Amit Seru headlined “State Bank Regulators
More Lenient Than Federal Counterparts,” was published January 23. The study found that even with a very standardized set of rules, two different
regulatory institutions consistently come up with very different conclusions about the health of an individual bank, even when they’re looking at the same
bank within a very short period of time, the article said.
AMERICAN BANKER ran a front page article about Professor Seru’s research February 1.
* THE WALL STREET JOURNAL. Professor Steven Kaplan was one of the experts quoted in an article headlined “Facebook’s Investors
Poised For Record Jackpot,” January 27. Referring to the expected public offering by the company, Professor Kaplan said “There’s a great chance
of Facebook being the single-best venture investment ever” at the time of its IPO.
- FOX BUSINESS. Professor Steven Kaplan was quoted in an article headlined “Facebook IPO Will Leave Zuckerberg Firmly in the
Driver’s Seat,” published February 2. “The downside of doing this is that the value of Facebook may be slightly lower than it would be if
(Zuckerberg) were not retaining control,” Professor Kaplan said.
- THE WALL STREET JOURNAL. Research by Professor Steven Davis formed the basis of an article headlined “New Study Tallies Private
Equity’s Jobs Role,” published January 21. The study portrays companies bought by private-equity firms as major creators and destroyers of jobs, at
rates far faster than similar firms that aren’t acquired, the article said. “It is partly in the nature of private equity that you get more extremes
on both sides – more destruction of old, more creation of new,” Professor Davis said.
- BARRON’S. Professor Raghuram Rajan was quoted in an article about the somber mood of corporate executives as the euro-zone debt
crisis “continues to support an environment of uncertainly,” the newspaper said. “People keep saying (that) the difficulty with the euro area is,
there is no fiscal integration,” Professor Rajan said. “There is no political or cultural integration, either. That has to come first, to some
extent, for people to feel that they are willing to give money to each other. Greece to Germany is not like Alabama to California. They are
different.” The article was published January 30.
- THE WALL STREET JOURNAL. Professor Steven Davis was quoted in an article about forecasts for the fastest-growing jobs this
decade. Home health aides and registered nursing are expected to experience big growth, according to the Bureau of Labor Statistics,
while manufacturing should see big declines. The expected drop in manufacturing is not surprising, Professor Davis said.
Manufacturing as a share of private-sector employment has been declining for decades, he said, because of outsourcing and, more importantly, "the rapid
pace of labor-saving technological progress,” which is affecting employment in the sector even in developing countries. The article was published
- THE WALL STREET JOURNAL. Professor Haresh Sapra was quoted in an article headlined “Experts see tough road for Kodak to reinvent
self,” published January 19 after the company filed for bankruptcy. Only a much leaner, more focused Kodak can survive, Professor Sapra said.
“They probably should go back to basics and focus on one or two of those business lines that are self-sustaining.” This article was distributed
by Associated Press.
- THE ECONOMIST. Research by Professor Steven Kaplan was featured in an article headlined “Private equity under scrutiny; Bain or
blessing?” in the edition dated January 28th. Professor Kaplan and his co-authors found that it is “very likely” that private equity
outperforms the S&P 500 (after fees), the article said.
* THE GUARDIAN (London). Separate research by Professors Steven Kaplan, Kevin Murphy and Luigi Zingales was featured in an article
headlined “Who came up with the model for excessive pay? No, it wasn’t the bankers – it was academics,” published January 30. All
the focus has been on bankers’ bonuses, yet no one has looked at the economists who argued for rewarding bosses by giving them a bigger financial stake in
their companies, the article said.
- THE NEW YORK TIMES. Separate research by Professors Steven Davis and Steven Kaplan was cited in an article headlined “Amid
Attacks on Private Equity, Efforts to Study Its Value,” published January 24. Professor Kaplan’s research estimated that private
equity-owned firms had a default rate of 1.2 percent a year from 1980 to 2002, compared with Moody’s Investors Service’s reported default rate of 1.6
percent for all corporate bond issuers in the U.S. in the same time period, the article said. Professor Davis found that the net job loss for
the average private equity acquisition turns out to be only about 1 percent greater than at other companies.
- THE GUARDIAN. Research by Assistant Professor Wilhelm Hofmann was featured in an article headlined “Twitter is harder to resist
than cigarettes and alcohol, study finds.” In a large experience-sampling study, Professor Hofmann compared enactment rates for a large number of
everyday desires that people indicated they had attempted to resist, including desires such as for high-caloric food, alcohol, cigarettes, rest, and media
usage. Problematic desires for media usage such as surfing on Facebook or watching TV were found to be comparatively difficult to resist. "With cigarettes
and alcohol there are more costs – long-term as well as monetary – and the opportunity may not always be the right one. So, even though giving in to media
desires is certainly less consequential, the frequent use may still 'steal' a lot of people's time," Hofmann said. Similar coverage appeared in
FORBES, BUSINESS-WEEKLY, KBPS, THE DAILY TELEGRAPH, and DIE ZEIT.
- THE WALL STREET JOURNAL. Professor Raghuram Rajan’s views on new transparency at the Federal Reserve were featured in an article
headlined “FOMC Long-Range Rate Forecast a Risk to Markets,” published January 25. The new transparency on how the Fed sets monetary
policy could backfire if it leads financial markets to build up “significant one-way bets,” Professor Rajan said. “I wouldn’t completely
dismiss the value of keeping the markets guessing a little bit,” he said.
- THE WALL STREET JOURNAL. Research by Professor Steven Kaplan was cited in an article headlined ‘Bain Capital Saved America,”
published January 19. “When large-scale hostile takeovers appeared in the 1980s, many voiced the opinion that they were driven by investor greed; the
robber barons of Wall Street had returned to raid innocent corporations,” he wrote in his research. “Today, it is widely accepted that the takeovers
of the 1980s had a beneficial effect on the corporate sector and that efficiency gains, rather than redistributions from stakeholders to shareholders,
explain why they appeared.”
- THE ECONOMIST. Research by Professor Steven Kaplan was cited in an article headlined “Who exactly are the 1%,” published January
21. He found that investment bankers, corporate lawyers, and hedge-fund and private-equity managers have displaced corporate executives at the
top of the income ladder.
- NATIONAL PUBLIC RADIO. Professor Steven Davis was a guest on “Talk of Nation” January 19 when the program examined how private
equity firms work. He discussed his research which found that between 1980 and 2005, there was more job loss and more creation of new jobs at
companies acquired by private equity firms. “The net effect on employment was actually fairly modest,” Professor Davis said.
Listen to the broadcast
- TIME Magazine. A video of Professor Raghuram Rajan’s appearance at the World Economic Forum in Davos, Switzerland, was
posted on the magazine’s website January 25. Professor Rajan discussed the future of capitalism on a panel which included David Rubenstein,
co-founder of the Carlyle Group, and Brian Moynihan, CEO of Bank of America.
- THE ATLANTIC. Professor Raghuram Rajan said “The West has about ten years to build new (economic) models or else high-skill
service jobs will migrate away,” during a presentation at the World Economic Forum in Davos. “As consumer demand moves to emerging markets, finance,
marketing and innovation will move there as well,” he said in the session covered in this article published January 26. The article was titled “Davos
and the Future of Capitalism.”
- THE WASHINGTON POST. Professor Austan Goolsbee was quoted in an article headlined “Economy will be major factor in presidential
election,” published January 24. Commenting on President Obama’s proposal to end all tax deductions, including those for mortgages and health
care, for people who earn more than $1 million a year, Professor Goolsbee said “The highest-income people had their taxes cut by trillions over the last 10
years, and it didn’t trickle down into faster growth or more employment. So the president has been arguing that it didn’t work the first time, so we
shouldn’t do that again.”
- THE NEW YORKER. Professor Steven Kaplan was called “arguably the leading researcher in the (private-equity) field,” in an
article headlined “What Debt Did for Romney,” published January 27.
- BBC WORLD BUSINESS REPORT. Professor Randall Kroszner discussed the Federal Reserve’s new communications strategy during an
interview broadcast internationally several times on January 25.
- CBS NEWS.COM. Research by Professor Steven Davis was featured in an article headlined “What exactly is private-equity?” posted
January 23. He found that although private-equity investments do often lead to big layoffs, they also often lead to a lot of new jobs.
The losses tend to be much worse at companies in the services and retail industries.
- AUSTRALIAN BROADCASTING CORPORATION. Associate Professor Juhani Linnainmaa discussed his research linking IQ levels to stock ownership
during an interview broadcast January 20. He found that people with higher IQs are more likely to own shares and also likely to make more money than
those who score lower on intelligence tests.
Listen to broadcast
BLOOMBERG BUSINESS WEEK also published an article about Professor Linnainmaa’s research January 19.
- BLOOMBERG TELEVISION. Professor Randall Kroszner discussed the U.S. employment outlook during a live interview February
3. We will continue to see “reasonably good” job growth, he said, but not enough to generate a large amount of income growth.
- CRAIN’S CHICAGO BUSINESS. Clinical Professor James Schrager was quoted in a column headlined “Northern Trust strategy
doesn’t need fixing,” published January 30. “Companies that have a very solid strategy have to be very cautious about changing it based on
conditions that come and go,” Professor Schrager said.
- CNBC. Professor Randall Kroszner told the Kudlow Report he wasn’t surprised by the Federal Reserve announcement that it expects
to keep interest rates low until late 2014. “From the statements FOMC members have been making, it’s pretty clear if you asked them when to
start hiking rates the majority would say 2014 or farther out,” he said. Professor Kroszner was a Fed governor from 2006 to 2009. The interview
was broadcast January 25.
- BLOOMBERG TV. Professor Randall Kroszner talked about the inflation target announced by the Federal Reserve during an interview
broadcast January 26. It’s valuable to set a long-term inflation goal of 2 percent to “anchor inflation,” he said.
- LA STAMPA (Italy). Professor Raghuram Rajan discussed global economic conditions in an article published January 21.
Read article in Italian
A video interview with Professor Rajan conducted, in English, by the reporter from La Stampa.
Watch video in English
- WBBM RADIO (Chicago). Professor Erik Hurst discussed housing prices during an interview broadcast January 31. Home prices
have hit bottom, but won’t be going way up in years to come, he said. The $500,000 house you buy in Chicago this year should be worth about $500,000
next year and the year after that, Professor Hurst said.
Listen to broadcast
- GEWINN (Austria). A Q&A interview with Professor Lubos Pastor was published in the January issue of this money magazine
focusing on finance and investments.
- INDUSTRY WEEK. Professor Chad Syverson was quoted in an article headlined “Midsize Firms Choose Technology over Hiring,”
published January 24. “Higher productivity can increase employment but only if it enables the company to expand output,” he said, adding that
rising productivity combined with flat output is a “recipe for fewer jobs.”
Section 3: Chicago Booth students and alumni in the news.
- FOX BUSINESS. Christina Liu, MBA ’80, PhD ’86, was appointed Finance Minister of Taiwan, according to a January 31
article. Since 1995, she has had several advisory roles in the government and was appointed head of the economic planning council in May
- THE WALL STREET JOURNAL. Verna Grayce Chao, MBA ‘05 was featured in a front page article about student visits with Warren
Buffett. She was part of Booth’s Buffett Group which met with the famous investor and had a humorous photo taken with him.
She is now a director of marketing in Dell Inc.’s health-care and life-sciences business and has the photo in an album at home, according to the article
published February 3.
- FINANCIAL TIMES. Matthew Gore, MBA ’12, was featured in an article headlined “Military objectives: Veterans often make ideal MBA
candidates – and schools are catching on,” published January 30. Gore is co-chair of Booth’s Armed Forces Group.
- WINE SPECTATOR. Booth’s Wine Team won first place at the semi-finals of the Left Bank Bordeaux Cup at the French Consulate
in New York, according to an article published January 26. The team will fly to France in June to compete in the finals. Team
members are Matt Lowe, MBA ’12, Alison Fortune MBA ’13, Pooneet Kant, MBA ’13, and Venu Neerudu, a student in the part-time MBA program.
- CRAIN’S CHICAGO BUSINESS. A Q&A interview with Ashish Rangnekar, MBA ’11, was published January 31. He is
co-founder of BenchPrep, a Chicago-based company that creates interactive, electronic versions of textbooks. The company won Booth’s New
Venture Challenge in 2010.
- CRAIN’S CHICAGO BUSINESS. C.J. Przybyl, MBA ’11, was featured in an article about the lifestyles of young entrepreneurs.
He is CFO of Body Shop Bids, which just raised $1 million from local venture capitalists. The article was published January 23.
- GOLF DIGEST. Swingbyte, a company founded by current Evening MBA students Brian Payne, Alex Pedenko and Nathan
Wojtkiewicz, was profiled in two articles published in January. Swingbyte is a small device that weighs less than an ounce and attaches to any
golf club. Once the user hits a shot, the Swingbyte transmits instantaneously digitized feedback, via a Bluetooth connection, to a smart phone or
tablet. It was named one of the 12 coolest items at the recent PGA Merchandise Show. Swingbyte tied for third place in
Booth’s New Venture Challenge in 2011.
Read second article
- G.I. JOBS. Matthew Gore, M.B.A. ’12, was featured in an article looking at why top business schools aggressively recruit
military veterans. He is a former nuclear propulsion officer in the U.S. Navy. “In the military, you really become accustomed
to learning on your feet, getting up to speed very quickly in an area and having to make decisions,” Gore said in the February article. “That is a
very valuable skill that I didn’t think about consciously but have found very useful” in business schools.
- THE WALL STREET JOURNAL. Igor Rozenblit, MBA ’02, was quoted in an article headlined “SEC Puts Private Equity Under the
Enforcement Microscope,” published January 25. He is a member of the Securities and Exchange Commission’s asset management unit, which was created in
2010 within the agency’s enforcement division. Questions have come up “almost every time” Rozenblit has conducted an examination of a private equity
firm, the article said.