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In increasingly competitive economic times, you could be the “salt of the earth,” but if you’re not driving revenue, you will be cut, Raymond McGuire, co-head of global investment banking for Citi institutional clients group, said in a keynote speech at the DuSable Conference November 8 at Gleacher Center.
In a separate keynote, Rowland Martin, journalist and political analyst for CNN, shared lessons from Barack Obama’s campaign strategies. Read Roland Martin story
To ensure a place away from the chopping block, hone your technical skills, McGuire said. He said “there’s no better place to learn them” than at Chicago Booth.
Despite possession of sterling B-school credentials, however, African Americans face pressure to outperform so they can stay on the main road and not be put on “the service road,” he said. “When you’re tagged for the slow lane, it is almost a miracle to get back onto the main road,” McGuire said.
One way to stay ahead of the curve is to stay globally informed, McGuire said. For evidence of relevance, simply look at the number of sovereign wealth funds recapitalizing the U.S. economy, he said. “Without the sovereign wealth funds, we wouldn’t have a U.S. financial institution system,” he said, noting that sovereign wealth funds amount to about $3 trillion, as opposed to hedge funds, which had stood at about $1 trillion.
Japan has the second largest economy in the world, he pointed out. The yen/dollar trade has had an impact on the flow of capital for about the past three years, McGuire said.
China alone is growing at a rate of at least 9 percent to 10 percent a year, and a cut in that growth rate of one or two points would have a massive impact on the global economy, he said.
Speaking of economic recovery closer to home, McGuire challenged audience members on their knowledge of TARP, which stands for Troubled Asset Relief Program. TARP gave $700 billion to the U.S. Treasury secretary to buy distressed assets from financial institutions. “Not knowing what TARP is, that is one certain way of how you will not survive the cuts. You can be certain about that,” McGuire said.
He said speed of economic recovery in the United States hinges in part on how the government reacts to trouble in the auto industry because of the number of jobs that could be affected. “If auto goes, you’ve got a problem. But maybe we should let it go,” he said. While under-regulation has been credited with contributing to the credit crisis, the potential impact of overregulation hasn’t been calculated, McGuire said.
On the other hand, health care and pension benefits have already been lost as well as income and Social Security is at risk for parents and grandparents on the automobile assembly lines, he said.
Ramal Moreland, a student in the Evening MBA Program, agreed that “it’s our responsibility to see to it that we find ways to meet and exceed our competition globally.” He said the global student base at Chicago Booth gives students “an understanding of what our peers have done in the past, what they are doing, and what they expect to do in the future, and how it affects us. That’s one of the assets of diversity.”
—Mary Sue Penn
Read coverage of other speakers at this event.