Doug Criscitello, Executive Director of MIT’s Center for Finance and Policy
From MIT Golub Center for Finance and Policy
As the keynote speaker at a recent conference of the International Consortium on Government Financial Management held in Washington DC, I had the opportunity to discuss with representatives from over 40 countries one of the primary challenges facing governments around the world – citizen engagement.
My remarks emphasized that recent populist movements should be a wake up call to everyone involved in government – including those in the budgeting and finance communities – on the need to turn citizen cynicism into engagement and buy-in.
The growing availability of technology and data should be enabling a highly informed citizenry (i.e., voters) armed with actionable information. Moving beyond tired factory-like mindsets where government financial staff spend their days grinding out reports, preparing audit remediation plans and manually executing budgets, a modern approach enables technology to drive iterative, customer-focused engagement and creates and marshals electronic resources.
The DC. Court of Appeals began hearing arguments recenlty in an historic session taken “en banc” – with a roster of 10 judges hearing a case that challenges President Obama’s Clean Power plan. Specifically, some industry associations are challenging new targets for coal plants that would require a 32 percent reduction in carbon emission by 2030. More generally, the case highlights challenges to Obama’s use of his executive powers to regulate the electricity industry in a way that will help the US meet international targets for reduction in carbon emissions.
While it may take weeks or even months for the court to rule, the case highlights the extreme importance of keeping U.S. plans to reduce emissions on track in order to spur continued global cooperation on global warming. With the U.S. election continuing to create its own heat, there are many interlocking and swiftly moving pieces on the global climate change front.
The world needs continued leadership from the U.S. and a ruling by the court that Obama had overreached would impact progress globally.
How important is having a “big idea” for startups? Ideas can generate a lot of buzz and capture attention from investors and potential customers, but long-term success really depends on the capabilities of the team.
It’s often said that investors typically look for an “A” team with a “B” idea rather than a “B” team with an “A” idea. The reason is that once you start developing an idea, things change, models need to pivot, and teams must be able to adapt. This makes a lot of sense because if all you have is an A idea and hit an obstacle, the venture fails. However, an A team can iterate until it finds success.
With Europe in disarray after Brexit, US lawmakers should fix the nation’s broken system for taxing foreign profits of US corporations.
In theory, foreign profits of US corporations are subject to a US tax of 35 percent. But in practice, these profits are not taxed at all by the United States — unless they are brought back to the states. Because of this rule, US multinationals have kept abroad over $2.5 trillion of their foreign profits.
This huge sum could be a growth engine for the American economy. The money could be used to build factories, modernize infrastructure, or pay dividends in the United States. Instead, it is deposited in bank accounts or invested in foreign countries.
We clearly need to reform this system, but responses in the past have not had much success.
Most Republicans argue for a territorial tax system in which foreign profits would be taxed only where they are earned. But this unfortunately won’t work. US multinationals have become very adept at shifting their earnings to tax havens, such as Bermuda, and other low-tax jurisdictions, such as Singapore.
Brick-and-mortar retailers have been on a bit of a roller coaster ride this holiday season as early expectations of strong consumer spending were weighed down by the uncertainty prompted by the election.
That’s on top of the usual jitters about the slow demise of Black Friday and more consumer cash gravitating to online retail.
That has made projections about this year’s holiday shopping season more of a guessing game than usual, but one aspect has now become clear: The rush by retailers to deeply discount merchandise will likely not prove to be beneficial to these retailers in the long term.
My research in “business to business” marketing suggests that instead of enacting ever-steeper price cuts that erode margins, both major retailers like Macy’s and small mom-and-pop stores would be much better off leveraging their physical presence as a source of strength rather than weakness by focusing on the personal touch that only they can provide.