Trump and transforming capitalism: making our movement see itself – Otto Scharmer

MIT Sloan Sr. Lecturer Otto Scharmer

MIT Sloan Senior Lecturer Otto Scharmer

From Huffington Post

“Trump is America’s wake-up call” I heard a visitor to the United States say the other day. True. Trump’s first year has been a wake-up call heard around the world. But are we really waking up? And who is “we”? And what, if anything, is the new awareness that we are supposed to wake up to?

This column inquires into these questions, and announces a major initiative that blends the news and social media power of HuffPost with the online-to-offline movement-building capacities of MITx u.lab.

Over the past few months, having attended events and grassroots gatherings in various parts of the world, I’m encouraged that such a waking-up and movement building process is well underway. I’ve seen firsthand a new landscape of initiatives focused on transforming the foundations of our economies and our social structures that is emerging. At the same time, social media movements such as #MeToo have shown how quickly latent and necessary changes can be catalyzed in our current moment. While there is still much more structural and systemic work to be done, it’s increasingly clear that as our old economic structures and civilizational forms hit the wall of our planetary limits, a new world is taking shape that focuses on bridging the three major divides of our time: the ecological divide, the social-economic divide, and the spiritual divide.

This awakening process is not only happening in grassroots movements. It’s equally observable among many, particularly younger, leaders working inside our traditional institutions. Everyone knows that we live in a moment of profound disruption. An old order is about to end. And something new is about to be born.

Last week, I was running a session at the European Central Bank in Frankfurt. During the discussion, one of the senior management attendees said: “The problem you describe is not totally new. The destructive dynamics of prejudice, ignorance, hate, and fear have been around for a long time.” And then he asked, “But why is it so much worse today? What is actually different now?”

What a great question. It prompted me to deepen my own sense making.

Read More »

Financial regulation calls for 20/20 vision – Antonio Weiss and Simon Johnson

MIT Sloan Professor Simon Johnson

Harvard Kennedy School Senior Fellow Antonio Weiss

From Bloomberg

One of the central pillars of financial reform, the Financial Stability Oversight Council (FSOC), is under political attack and at risk of coming undone.

In the past, the balkanized U.S. financial regulatory system has consistently failed to address risks that took root in its jurisdictional gaps. The FSOC was created to solve that problem, bringing regulators together to make sure they have the tools to protect the economy from financial crises. It is already making an important difference.

Unfortunately, earlier this month the House Financial Services Committee passed the Financial Choice Act (CHOICE Act), which threatens to reverse that progress. It would, for example, all but eliminate the FSOC’s ability to prevent the regrowth of an unsupervised shadow banking sector that might once again threaten our financial stability and economic resiliency. At the same time, the administration of President Donald Trump has signaled that it may use the council to pursue deregulation, rather than its core mandate of financial stability, and to reverse or limit its ability to designate systemically important non-banks for enhanced supervision. Meanwhile, MetLife Inc., the largest U.S. life insurer, recently asked the courts to delay ruling on an appeal filed by the Obama administration seeking to reinstate the firm’s designation as a systemically important institution requiring prudential oversight by the Federal Reserve.  The Trump administration has agreed to put the appeal on hold.

Read More »

Taking steps to reduce foreign social-media meddling in our elections – Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

From Huffington Post

One could almost pity the executives from Facebook, Google and Twitter as they were grilled on Capitol Hill earlier this week by senators upset about Russian meddling in last year’s presidential election, via the posting of cleverly worded propaganda ads and messages on social-media sites.

After all, how do you detect – let alone stop – a small group of determined foreign nationals manipulating and taking advantage of what’s supposed to be open, free-flowing Internet platforms idealistically designed to allow billions of people across the globe to voice their thoughts on everything from world politics to the type off pigeons in Trafalgar Square?

Of course, the Facebook, Google and Twitter executives at the Senate hearing earlier this week bowed their heads, expressed remorse and vowed to do better in combating the threat of foreign interference in our democratic elections.

But the question is: Can they do better? Is it possible? Remember: Facebook alone acknowledges that it received only about $100,000 in paid ads by those it later learned were tied to various Russian groups, but those ads were still seen by about 10 million people, according to media reports.

Read More »

Under Trump, Wall Street’s Future Is Bright. Yours and Mine? Not So Much – Simon Johnson

MIT Sloan Professor Simon Johnson

From NBC News

After much speculation, President Trump has announced his pick to lead the Federal Reserve System: Jerome “Jay” Powell. How should we think about this appointment in the context of the overall Trump administration thinking on financial regulation?

Trump slammed Wall Street throughout his campaign, asserting big banks had “gotten away with murder.” The Republican National Convention platform even mentioned a new Glass-Steagall (the Great Depression-era restriction on banks’ activities). Still, many questioned whether the Trump administration, including Powell, was committed to implementing policies tough on global megabanks.

The answer is no.

There are actually two Trump administrations. One, which attempts to deal with issues that require legislation, like health care, is having trouble making progress. But the second, which can change the rules of regulation, is moving full-steam ahead. We can already see the ground being cleared for a major round of financial deregulation.

There are three important signs of intent when it comes to finance. First, the top people on economic policy in the White House and at Treasury have all worked on Wall Street — and mostly at one big bank, Goldman Sachs. Gary Cohn, the former Goldman Sachs president, is chairman of Trump’s National Economic Council, and he has brought in a team that apparently is running the show in terms of policy. Cohn has made his intentions clear: He wants to rollback regulation.

Read More »

The People vs. Donald Trump – Simon Johnson

MIT Sloan Professor Simon Johnson

From Project Syndicate

In American politics, the next election is all that matters. Despite the Republicans’ big win in November 2016, US President Donald Trump’s ability to pass legislation still depends on what congressional Republicans expect to see happen in the November 2018 midterm election. Owing to a major shift in public sentiment in the past few months, many Democrats are now convinced that they will win seats, and potentially reclaim control of the House of Representatives.

One can already see grassroots activism gaining momentum in congressional districts that would not have seemed competitive just five months ago. For example, in California’s 45th district (in the traditionally conservative Orange County), University of California, Irvine, law professor Dave Min is taking on the incumbent Republican, Mimi Walters. This past November, Walters was reelected with 58.6% of the vote, but her district favored Hillary Clinton over Donald Trump by two percentage points.

This kind of House seat can easily flip to the Democrats in 2018, if a candidate like Min can persuade voters that Walters is out of touch – and too close to Trump. So Min has highlighted Walters’ support for Trump’s attempt to “repeal and replace” the Affordable Care Act (“Obamacare”), as well as her backing for his broader budget-cutting agenda. Moreover, her positions on many social issues seem quite distant from those of her constituency.

Read More »