Nobody gains from financial crises — except far-right extremists – Emil Verner

Assistant Professor of Finance, MIT Sloan School of Management, Emil Verner

From The Hill 

After a severe financial crisis, it’s common to see a surge in political polarization and in the popularity of populist parties, especially on the far right.

We’ve seen this decade after decade, and it’s clearly the case now around the world. Just look at the Law and Justice Party in Poland, Podemos in Spain and Jobbik in Hungary. The U.S. has certainly seen its share of political polarization, too.

This shift matters, as the emergence of far-right parties increases policy uncertainty and can threaten economic growth and democratic institutions. Those parties often bundle together radical economic platforms with xenophobic policies and racist rhetoric.

As a result, it’s important to understand whether (and how much) financial crises lead to increased support for extremist parties and why there is a connection.

In a recent study, my colleague and I analyzed these questions in the context of Hungary after the 2008 financial crisis. That country experienced a particularly severe household debt crisis starting in 2008 and a sharp increase in support for the far right.

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Turning the tide – Otto Scharmer

MIT Sloan Sr. Lecturer Otto Scharmer

MIT Sloan Senior Lecturer Otto Scharmer

From Medium

Something has shifted over the past few weeks and months. Not just since the recent US midterm elections or the climate deal in Katowice last week. There’s some real change in the air. In fact, it’s been there for a while. But we might not have noticed it…

…due to that other series of events. Brexit. Trump. Bolsonaro. Orban. Salvini. Erdogan. Duterte. The list goes on. It’s like standing in the boxing ring, encountering punches left and right. We’re still absorbing one blow as the next is already being launched. That’s how the past two-plus years have felt to me — and I assume to many. But now, as 2018 draws to a close, for the first time in a while I feel that we’re getting back on our feet; we’re beginning to shift our mode of operating from reactive to generative.

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Give federal workers a voice to break the impasse – Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From The Hill 

One of the most dismaying aspects of President Trump’s speech on Saturday was that he showed total disregard for the federal workers and contractors who are not getting paid even though some of them are required to work, others are not able to go to work and some are neither working nor will ever get paid for the time lost.

It is time for all federal workers and contractors, and indeed for the American public they serve, to stand up and say enough is enough: Stop holding these workers hostage to a political impasse that good faith negotiations could easily resolve.

Federal employees may need to raise their own voices to make this happen. They should demand an immediate end to the shutdown and perhaps tak a play from the Google employees’ playbook and call for a day of action if the shutdown continues.

Moreover, like the Google employees, federal workers should demand a seat at the table in negotiations over how to best solve our border security and immigration problems once and for all.

This would be consistent with a basic principle of employment relations we study and teach and that wise managers and labor leaders know and practice: Those closest to the problem know the most about what additional supports they need to do their jobs well.

So here is an outline of a proposal I would urge the federal workforce to make.

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A simple fix for gerrymandering – Arnold Barnett

Arnold Barnett, George Eastman Professor of Science and Statistics, MIT Sloan School of Management

From The Hill 

It is widely believed that the partisan gerrymandering of election districts is unfair, but revising district boundaries to alleviate the problem is easier said than done.

Proposed methods for doing so involve such abstruse concepts as “efficiency gaps.” Perhaps his characterization was too harsh, but Supreme Court Chief Justice John Roberts probably spoke for many when he derided such approaches as “sociological gobbledygook.”

To prevent gerrymandering by politicians, the citizens of Colorado, Michigan and Missouri have just voted to have their election districts determined by experts. But this approach has not been conspicuously successful in California, which pioneered it.

There, the vote tallies for each political party diverge from their seat shares in both Congress and the state assembly as lopsidedly as in other states.

Yet, one can imagine a way to dispel the pernicious effects of gerrymandering without the need to modify any election districts. It can be described using data about the 2012 Wisconsin election for the state assembly, which was at the heart of a gerrymandering case that the Supreme Court considered this past term.

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Blockchain’s potential for environmental applications – Irving Wladawsky-Berger

MIT Sloan Visiting Lecturer Irving Wladawsky-Berger

MIT Sloan Visiting Lecturer Irving Wladawsky-Berger

From The Wall Street Journal

The World Economic Forum in mid-September released a report examining how blockchain technologies could be harnessed to address serious environmental issues, better manage our shared global environment and help drive sustainable growth and value creation. The report outlined some of the world’s most-pressing environmental challenges and highlighted eight blockchain-based game changers that could lead to transformative solutions to these pressing problems.

“The majority of the world’s current environmental problems can be traced back to industrialization, particularly since the ‘great acceleration’ in global economic activity since the 1950s,” notes the report. “While this delivered impressive gains in human progress and prosperity, it has also led to unintended consequences… research from many Earth-system scientists suggests that life on land could now be entering a period of unprecedented environmental systems change.”

True, blockchain is still in its early stages of development and deployment. Its capabilities have been often oversold, as is the case with just about all promising technologies. But, as the WEF report argues, if blockchain one days lives up to its promise, it could “transform how society operates, becoming one of the most significant innovations since the creation of the internet. The opportunity to harness this innovation to help tackle environmental challenges is equally significant.”

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