Norman Macrae -The Economist pro-youth economist -bravo sir fazle abed & jack ma
tom standage The Economist mobile development 1 hour lecture
go to minute 6.30 to impact of doubling every 18 months
8.25 history how morse code started binary telegraphing
23.15 intel strategy and culture - don't let moores law end on your watch
When Michael M. Crow, the president of Arizona State University, introduced Craig R. Barrett, the former CEO and president of Intel, he called Barrett “a singularly important actor in one of the most profound technologies in human history.” But when Barrett entered Stanford University in 1957 as a student of metallurgical engineering (not even knowing how to spell the word “metallurgical”), the changes of the next half-century with which he would be intimately involved were impossible to imagine. The world was only on the cusp of technologies like the modern transistor and integrated circuits that made our current digital age possible; advanced computing hadn’t yet been realized. In a wide-ranging conversation with Crow, in front of a full house—with additional audience members watching in a nearby overflow room—at the Phoenix Art Museum, Barrett discussed the past 50 years of technological change and offered some broad thoughts on his hopes for the future.
note - need to do a map on whether laureate (and its claim to be largest business educator) is a win-win for youth - seems to be talking abut increasing the monopolies of accreditation
data includes- intimate relationships with courser and ifc
edx (Robert Lue harvard) claims mooc is just the beginning -see video below minute 6 to 54.45
see minute 14.00 of this video -eg it doesn't have to be massive but might link in various opposing segments in advancing a converging field; open can be one segment of experience but course might be privately adapted for specific segments; doesnt not have to be a course (historically predicated structures based on how many bodies can you fit in a room for how long)
16.56 edx sees OLA as the core module -Online Learning Activities - courses become sequences of OLAs - many faculty members are not doing whole courses but small sequence of OLA- what we are trying to od is modularity can you design an Ola with a front end and an back end that enables it to thread very effectively
29.54 -a revolution in collaboration - with colleges at all stages of education, with publishers , with cities eg Bostonx Harvard & MIT Partner with the City of Boston to Offer Online Courses & Job Training to All Residents , with media ,,, search bostonX
are we teaching future literacy?
john mackey 12.20 http://fora.tv/2013/04/05/Conscious_Capitalism_Heroes_of_the_Busine...
Don't look at this video unless you have an hour to take notes- its live from moodelmoot - an annual onlone conference of educators- if you'd been online live you would also have gots dozens of bookmarks instant messenger to you - in this presentation you will have to stop the video and write those you need down
so why I have included a video that's not designed for efficient replay- it seems to offer a benchmark on how ipads could be used in primary and secondary education as at aug 2013 - overwhelmingly all sorts of features and apps are ready for trial but not in massive use yet- which will ever be : ipads seem expensive to equip a class with - yet at the same time you get glimpses from this presentation on the unstoppable joys that online education will bring - and how perhaps teachers networks will have to use this technology if the us common core movement is to accelerate. I also admire the share gusto of the student researcher!
I should also say that Nellie Deutsch's you tube space http://www.youtube.com/user/nelliemuller?feature=watch seems to be an extraordinary personal explanation of online in schools. I need to go back to it and pick a video
This video from the Soros linkedin network of economists rethinking economics from the ground up summarises the mess that big banking compounded during the 2000s and still traps peoples and communities in
Transcript of this video is here
Co-edit questions on his transcript at this micro-wiki
Relevant articles on banking meltdown from Norman Macrae archives:
Norman's 1972 survey in The Economist on what needed to be changed if global...not to meltdown in 2010s
Norman's survey on first 100 Hobarts concludes economists believe biggest mess of al is monopoly of government run currencies
Martin Wolf Testimony to Washington DC Press Club 2009 on diabolical sector that keeps collapsing and ruining generations' futures
Transcript of Video on Whither Banking Systems
Marshall Auerback interview Simon Johnson (Professor of Entrepreneurship at MIT)
on behalf of www.ineteconomics.org
TOO BIG TO FAIL & THE STATE OF FINANCE TODAY
MA In mid 1990s I was working for the IFC and when things got really bombed out I suggested they set up a Vc fund to try and capture some of the tremendous values that were left in Asian after the wreckage in 1998. The general response was" we don't want to go near the place as its rife with crony capitalism, and I couldnt help but think about that in the light of what has happened recently in the US- and you being formerly with the IMF must have a similar sense of deja vu with this problem
SJ Yes absolutely -that's a good comparison - many of the problems that because manifest in Asia in 1997/98 are actually the same problems we have today in US - a relatively small elite has become too powerful and powerful in ways that distort the financial sector and cause a great deal of risk and damage to the rest of the economy
MA Its interesting to compare the 1920s situation. -I think profits of finance, insurance and property accounted for about 40% of total profits in 2006- we had same thing in 1920s. The difference being that at the great depression we had a robust regulatory response- i think you have pointed out that it has been lacking this time
SJ That's right. The response has been nothing like what happened in 1930s.. The financial sector was a big driver of what happened in 1920s - it was still much smaller part of GDP back then about 2% which reached close to 8% - so we now have a sector whose size can do even more damage going forward than in the 1930s
MA There seems to be a real problem of political capture this time around. We have let a good crisis go to waste
SJ Well I think the crisis wasnt wasted from the point of view of the bankers -they did very well out of a nicely run scam or scheme on their behalf. It was wasted by the rest of us - its true we have not reined in their powe
MA And do you get a sense now that 5 years on public repulsion hasnt abated - do you get a sense that political and economic climate is changing and more favorable to the kinds of things you advocate in your book
SJ Yes the climate is changing in large part because the banks have been proven repeatedly to be incompetent or unwilling to manage their risks appropriately. Its not just JP Morgan Chase and so-called London Whale, its also HSBC and standard chartered with the money laundering, its repeated problems around citigroup, its many of the things we learn happened around Bank of America and Countrywide which they bought ,,,, and every time that there are revelations , people begin to understand more clearly how the financial sector has really come to operate
MA Unfortunately it still seems to be the case of too big to fail is too big to jail
SJ The attorney general of the US said in recent testimony at congress that his department of justice cannot bring criminal charges against the largest financial institutions in the country - so equality before the ;law is no longer with us
MA Who do you think was driving that? - was that a decision of the Geihtner Treasury or a decision taken at the OJ
SJ Well that's a fascinating question- both sides are pointing at each other. I think that Lannie Brewer who is head of the criminal division working with Eric Halder the Attorney General largely decided for themselves The interesting question there is on what basis did they decide, with whom did they consult, what are the metrics they used, are the rules written down, is this something they make up in the shower every morning
MA Do you gave any personal thoughts on that
SJ I think they are making up the whole thing on the fly.. How they decide these people are too big to jail and these people we can go after seems to be a bit capricious., and not subject to the accountability that you hope for with the US justice system. The Treasury Department under Geithner was without question sympathetic to view that you should leave the big banks alone. We will see how the Treasury Department is after Mr Geithner
MA Let;s shift the focus to Europe - its not 13 bankers there , in many ways its 13 Finance ministers.! We do seem to have the same problem. In many ways Cyprus highlighted the dangers you pointed out because we had uninsured depositors taking haircuts. For me what's been interest is that the political response has been : isnt it terrible that some depositors have had to take haircuts?. There has been less focus on activities that led to this problem that put the deposits at risk - we find out now that deposits are not a risk free asset you ;put at your local bank but have become a branch on the creditors tree. So I think the question : are the range of activities that are being allowed by bankers consistent with the mandate to safeguard deposits
SJ Thats a good question. I would expand t and ask - whether we have enough equity capital in any of our banking system. The Cypriot banks if you look at the liability side they had mostly deposits. They had very little equity, subordinated debt or other kinds of bond issues. It was all deposits. Now they made investments they claimed werent too risky - but buying Greek government debt turns out to be very risky. And when they have those losses that are big relative to the GDP because the banks are big relative to the economy. How are you going to absorb the losses - who's going to pay - taxpayer? pensioners. depositors- there are no good choices in that moment. And that's why I think bank regulation - thinking about bank size, banks size relative to the economy becomes increasingly a relevant question
MA And that's why I think Cyprus is an interesting situation. While a lot of people say its an outlier with banking assets 800% of GDP but if you look at EU as a whole its banking sector relative to its GDP is still multiples of the US , if we've got too big banks to fail they have absolutely gargantuan banks -even in Germany I understand the ratio is about 400% of banking assets to GDP
SJ Well you are right that Europeans have a more banking dominated finance model than the US their largest banks are relative to their individual economy. If you divide by eurozone as a whole they are about 2-3 times bigger not 8 times bigger. But in individual countries there are even greater imbalances. they also bought massively into Basel 2 way of thinking about measuring risks and allowing banks to determine for themselves what's a safe asset and what's a dangerous asset. This is a very difficult combination for them they have a lot of mismanagement of risk in balance sheets that are big relative to their economies, and the Sovereign Dept crisis is not yet over
MA And its not over- and that's an additonal complicating factor because in US, Canada , UK when you have a deposit guarantee its more credible because its backed by treasury or federal government. So you can make the kind of deposit guarantees that people can credibly believe. Whereas in a country like Ireland where they first made a blanket guarantee, people started doing the number - their banking assets are 500% the GDP how can they possibly do that?
SJ That's right. Of the course the FDIC to be clear does ultimately draw on its ability to levy the financial sector but if that levy is not available if the whole sector is under stress they do have access to credit from the treasury
MA Precisely because they had that credit line they didn't have to draw on it. Europe hasnt anything comparable but it seems ECB is slowly moving in that direction, with a eurowide FDIC but with opposition from Germany
SJ Well I think the Europeans havent made much progress in terms of unifying the banking system and providing sensible deposit insurance - which isnt just about insurance but its also about having rules for who gets paid what amount when a bank fails. So what happens in Cyprus was quite different from what people had expected based on what they had seen in eg Greece and Spain. So do the Euripeans now have clear rules or are they just making it up as they go along. That's a big question in terms of generating uncertainty for themselves and the world
MA You mentioned earlier the need for higher capital buffers, I wonder though whether liability side of banks is best way to regulate them. By that I mean : you increase capital buffers as a response to a pre-existing problem but actually shouldn't you be looking at the activity that generates the problem in the first place - in other words what the bankers themselves can do
SJ Well I am not sure these ways of approaching the problem are substitutes, I think they are complements. The key point in terms of the liability side is the extent to which the banks fund themselves with equity rather than debt.. They should have enough equity to fund the kinds of risk you can expect over the cycle - and that's not 3 to 5% but 30% to 40%.of total assets. That's where we need to push the financial sector. Now that may not be sufficient but it is necessary.
MA They dont want to do that as it would help their profitability very much, and they use those profits to lobby as many members of congress as possible ... and what's really happening in the US is about 5 banks have 50% of the entire deposit base of the us and they are creating a situation which is penalising the unsystematically dangerous banks - the 6000 community banks and retail banks who fund themselves by their deposit basis but who are losing deposits and therefore seeing their costs of wholesale funding go up because a depositor rationally says I will put my money with jp morgan because they are too big to fail
SJ Absolutely this is unfair competition, uneven playing filed
MA Final question we are called the institute of new economic thinking, any ideas on what we should be embracing to be consistent with our mandate?
SJ Well with regard to issue I work on inet has been incredibly supportive in developing a network of people who are thinking about the financial sector in a different way from convention. Now there's an interesting question as to whether this is a new way of thinking or going back to old sensible first principles - still it is new relative to the orthodoxy that prevailed in the run up to the crisis of 2007/8. So this is an incredibly imporatant issue: legitimatising this agenda, bringing people together , providing a framework in which technical people can confront these realities - banks are just out of control and here are some sensible ways to reign them in
why not design 25 frontier corporations each aiming at 10% of billion person population's greatest needs - paul polak is starting 4 such - see his book The Business Solution to Poverty - see also discussion here value combination of 8 radical design criteria
There are eight keys to applying zero-based design to the conceptualization and implementation of a business that will market essential products or services to people living on $2 a day or less and be profitable enough to attract the capital necessary to reach global scale. By employing these principles in an integrated, bottom-up design process, you can fashion an enterprise that will truly help millions of severely poor people move out of poverty:
These eight ideas form the basis of the zero-based design approach. In next week’s final post, I’ll describe two additional concepts that are essential to achieve the scale and adaptability necessary to combat global poverty.
To understand what we mean by this term, consider the analogy we’ve based it on: zero-based budgeting. Typically, next year’s budget is simply this year’s with a few adjustments. Sometimes the process is straightforward: just increase or decrease last year’s numbers by two percent or 10 percent, and—voilà!—you’ve got next year’s budget.
By contrast, in zero-based budgeting, you start from scratch. Zero. With every line item blank, you dig as deeply as you need to dig to learn what’s really necessary and feasible.
Practically all designers set out on any assignment with a set of assumptions in mind—either a template they’ve successfully used in the past to solve a similar problem, or an existing product or service they plan to modify, or, at the very least, a conviction they’ve run across similar challenges in the past and can rely on their own experience in addressing them. In zero-based design, none of these assumptions is acceptable.
You begin the zero-based design process from a position of assumed ignorance. Because you possess experience in, say, building homes, you might set out to establish a new business that provides healthy and comfortable housing for $2-a-day people who now live in the most rudimentary shelters.
However, instead of thinking of ways to adapt an existing home design to local conditions, you need to assume that nothing you’ve previously done will be suitable. You set out instead to determine what poor people themselves believe will best meet their needs. The process entails asking a lot of questions—questions at every stage of inquiry.
paul polak at youtube http://www.youtube.com/user/PaulPolak90Percent/videos
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