Today is the first day of the most unique fall semester of my career as a professor. I will be back in a physical classroom for the first time in months, masked and ready to go. In one of my classes, over 90 percent of students have decided to attend in person. This speaks to me of the longing for human contact, and the fundamentally different experience of even the most humdrum college classroom when compared to a technology link.

Dr. Mike Shaub, in a Baltimore Orioles maskSocial media is atwitter with stories of reckless college students gathering in droves, and the anticipation is that it is only a matter of time before universities go online. Some prominent universities already have. But there is a certain recklessness, at least a modest amount of risk-seeking behavior, in all of us who are not hypochondriacs. Certain needs will prompt us to assume risk because of what we get in return. We may try to tightly control the extent of that risk. But five months into this COVID adventure, we all have a much better read on our propensity to assume risk.

And, to be honest, it is a lot higher across the spectrum than I would have guessed, and not just for college students. My desire for normalcy in the classroom and in my workplace drive me to assume risk. I feel pressure from peers in my church community to regather, even though it still seems like a bad idea to me. Most people who know me would see me as risk averse; I am, after all, an accountant. And yet later on today I will be face-to-face with new MS Accounting students in a professional seminar in a classroom down the hall.

Many who see college students as selfish would characterize professors going into the classroom as heroic. I think that is a bit of a caricature. Of course, there are a number of college students engaging in purely self-interested behavior because they believe the downside risk is minimal. This is nothing new, and it is the reason we have organizations like CARPOOL at Texas A&M to minimize the consequences of this type of behavior by offering rides home from bars to those who need them.

But professors have needs, too. And when I look in the mirror, I have to ask myself—why have I chosen face-to-face instruction rather than teaching online? Part of it is that I taught online in the spring and summer. To be honest, it would be a lot easier than the hybrid version I will start with this fall, where I try to attend to the needs of students in the classroom and those Zooming in. But I give up a lot sitting in front of a screen, physically detached from my students. My career has been about life-on-life investment, and as hard as I try to make the online experience seamless for my students, it is not the same. Am I being selfless, or is it just evident to me that the experience of being a professor without human contact is, for me, a lifeless one, and less worth doing?

I have often told my students, “If you can’t self-regulate, you WILL be regulated.” I certainly know people who will wear a mask only under force of rule, and complaining all the while. But it is pretty clear at this point that the only thing that can make this fall semester happen the way we want it to is for students and faculty to self-regulate at uncomfortable levels. Around here, we call that selfless service.

Can we do it? Who knows? I know that I will be washing my hands every time I walk by a bathroom, and soaking my paper cuts in hand sanitizer constantly. (Again, I’m an accountant.) I have the equivalent of a “No Shirt, No Shoes, No Service” sign on my office door. I have an assortment of masks for every occasion, from N-95 on down to casual dinner wear. The last thing I want to do is bring this scourge home to the World’s Most Beautiful Woman, and not just because I will be relegated to a distant room (or a tent outside) for two weeks. Protecting her is all that really matters.

It is hard to know how much I will resemble last year’s Dr. Shaub as I go back in the classroom. I feel like a bit of an imposter. But if it protects her, I am okay with that. Whoever I am, I am hopeful, and strangely happy, about this opportunity. I want to do the things I can to prolong it, and I want my students to have fun learning along the way.

But who am I to criticize them for being risk-seeking? My presence with them says that they are not alone. Here’s hoping we are all able to self-regulate sufficiently to prolong the joy that comes from the beauty that is the university classroom.


Explore my recent post “100” and the news story it prompted on KBTX.com.

 

Categories: Blogs, Bottom Line Ethics, Business, Family, Friends, Politics, Society, Texas A&M

In the midst of a pandemic that has made me more risk averse than I have ever been, I am witness to a standard of longevity that stands as a monument to tenacity and grace. This week, my Dad, who survived Iwo Jima among a series of Pacific battles that engaged the 4th Marine Division, will turn 100.

When I was growing up, my chain-smoking Dad was the last person I would have thought would live to a ripe old age. I am pretty confident that I never saw my Dad participate in athletic activity when I lived at home, unless you count yelling at Little League umpires. He never worked out between the ages of 30 and 70. He was not careful about what he ate or drank. He was just my Dad, and not anyone you would think of as an icon.

Today, he is one of the most popular people on the third floor of the Isle at Watercrest, still getting around with his walker and, whenever possible, refusing help. But for the last four months, this has been invisible to us, and we have relied on others to provide all of his care and comfort. We are the outsiders, banned from visiting because of the COVID threat to residents.

I would give anything to sit across the room from him in the reading chair that I bought when he moved here a year and a half ago. We would have a meandering conversation about life in Pennsylvania shooting rabbits with his father, or coming of age in Baltimore, or the war. None of the discussion would involve politics or the Astros, as it might have a decade or less ago.

We would look at pictures of Mom on the wall, gone three decades now, but very much alive in his heart still. Next year Linda and I will pass the number of years given to my parents together, but I can guarantee you that the fire still burns bright for my Dad, and it gives me hope that we can continue to kindle something that our kids and grandkids will use in the years ahead to warm their lives.

The pictures in his room also include frozen moments in time of my parents just after the war, and then with one, two, and three children. The last of these is my first birthday, on the porch in Baltimore in my Mom’s arms with me wearing a classic birthday hat, with my two older brothers looking mildly disinterested. I have not seen these pictures for four months because of COVID. But I see them clearly in my mind, and they connect me to my Dad in ways that are hard to describe.

One day, I suppose, similar pictures will hang above my recliner in a similar place, telling a story of days already long ago in which my life was formed and shaped. And my children and grandchildren will, I hope, visit long enough to have that unique mixture of sadness and sweetness that goes with encountering life at the stage where the battery is flashing.

But amidst the long, slow decline, we have this amazing moment. 100. How could it be that he could have gotten to this point, and that he still acts as if the road goes on forever? This man who has witnessed over 40 percent of the history of our nation, who was born just after World War I and the flu pandemic and while Woodrow Wilson was still president, soldiers on in the summer of COVID. And he does it without a single visitor, though we are chomping at the bit to be with him.

All the cultural battles being fought today are the culmination of history he has witnessed. When I was young, it felt like I could never make him happy. Now, he never complains, unless you try to help him. When I talk to him, one of his most common phrases is, “So be it.” It is a mix of resignation and contentment. After Mom died, he spent almost thirty years alone in the home I grew up in. I suppose he is as prepared as anyone I know to be alone in this pandemic, and I am pretty certain that he is content with the periodic visits throughout the day from his caregivers.

But, if I am being honest, I am not. I want to see my Dad, and hug his neck, and let him know face-to-face how much I love him. I almost never talk to him without him telling me how proud he is of me. How many men my age are hearing that? How many men of any age are hearing that?

I have the voice of my father telling me I am worthwhile for one more day. I do not take this day for granted.

I love you, Dad. Here’s to you. 100.

Categories: Blogs, Bottom Line Ethics, Business, Family, Friends, Religion, Society, Texas A&M

Updated 12/4/2019 11:24 AM with scholarship information at end.

There are times along the road of life that we are given to cynicism. In my world, that cynicism can come from following closely the stories of people in the business world, and in the accounting profession, who live on the edge ethically. They deflect criticism and offer a litany of excuses when they wrong others or take their money. They largely avoid punishments they deserve, and they move on to hurt others in similar ways. There are days when I wonder if there is any hope of changing the environment my students will go into in the business world.

And then you meet someone like Maegan Sanders. Raised in a family deeply rooted in its faith, in a close-knit community, the kind of small town that sends its best to Texas A&M. A gentle, effervescent soul who could dominate you intellectually, but refuses to make you feel small. Maegan is the kind of person you design exams around; the goal is not to challenge her, but to see if you can create an exam on which she will not make 100.

She has been a presence in these halls even before she was in these halls, the precious daughter of a colleague who shapes some of the very best of our Accounting students with the information technology skills that put them in high demand on the market. Her mom is one of the most influential members of our faculty, and I have spent the entirety of my 13+ years here officed in the same hallway, watching her children go in and out of her door as they became formative Aggies.

Maegan hit the ground running here, accelerating through Business Honors into our Professional Program in Accounting (PPA), and she was headed out the door next May to work for Ernst & Young in San Antonio, and to begin her new life with her beloved fiancé. Last Sunday her life was cut short in a moment on a too busy holiday highway.

The tragic accident that took Maegan and her brother, Wesley, from us is the type of event that could make us cynical as well. The unexplainable is often the root of doubt and despair. A decade ago we lost one of our very best in the Professional Program in a similar sudden and unexplainable way, and I am affected by that seeming injustice to this day.

But I also see in these tragedies the hope that springs from faith and from community, and from a life well-lived, whether for 22 or 92 years. I received word of the accident barely 48 hours ago, and yet I have seen an outpouring of love and commitment from the Aggie family and from the students in our program that humbles me. Within hours a 24/7 prayer vigil for the family was launched by PPA students that is continuing at this moment. Money for an urgent need was raised through a Venmo outreach—in 20 minutes. A scholarship is being established to remember Maegan and Wesley, and Aggies from all over are asking how they can be a part.

I try with everything in me to teach and to model a life worth living in the business world. And then someone like Maegan Sanders enters my classroom, already living the joint life of technical excellence, even brilliance, and unquestioned integrity. I wonder exactly how God puts together a person like that.

I can give you a clue. In my Accounting Ethics class, my students are required to develop principles to guide their professional lives. Maegan’s first and last principles came from the same source—her mom. “Always listen to your little voice.” That little voice was “built and sculpted by the way I was raised,” Maegan wrote. And the second principle that was her guiding force in the voice of her mother was this: “Just be nice. It’s as simple as that.”

Tonight I will attend the visitation, and tomorrow the funeral, for two precious lives taken too soon. I will wear something green for Wesley, and yellow for Maegan, as the family has requested. And as I sit there, I will listen to my little voice. It is the same little voice that told me to write this.

And then tomorrow, in the challenges that go with directing a program and caring for aging parents, I will try to remember to just be nice. Because, in the end, it’s as simple as that.

###

The Accounting department has created a scholarship endowment in memory of Maegan and Wesley Sanders. Income from the endowment will be used to provide an annual scholarship for an outstanding accounting major and to help create a lasting legacy for Maegan and Wesley. If you would like to contribute to this fund, please visit the Texas A&M Foundation page and choose The General Memorial Fund.  Under gift details, check the box in honor of someone special, select “In Memory” of “Maegan and Wesley Sanders” for the “Memorial Scholarship” and notify “The Sanders Family”. For information on where to send checks, please email ppa@tamu.edu. Thank you.

Categories: Blogs, Bottom Line Ethics, Business, Family, Friends, Religion, Texas A&M

On this August day, the University of Nebraska at Omaha flags fly at half-mast for a man whose heart was as beautiful as his mind. David Swanson could have done any number of things with that extraordinary intellect. What he chose to do was to quietly make life better for thousands of Nebraskans by investing himself in a critical role that impacted its university system. It is not the kind of thing that engenders a hero’s respect in most people’s eyes. But then Dave is not most people.

David SwansonI met David when I was a young professor at Nebraska, about the time he married Ronda. He was a bike-riding graduate student who thought on a different plane. As they grew into their marriage and encountered parenthood, our friendship blossomed. Linda and I were hopelessly overwhelmed with three, and then four, children, so we welcomed their curiosity and their practical help.

He loved the Twins. The first two times I typed that, it came out “loves” as if my fingers couldn’t type the past tense. He loved them stupidly, like a child, against all evidence, the way I love the Orioles. I still remember a camping trip our families took together, our boys tossing the baseball back and forth as proxies for us. My last memory of Lincoln before leaving for good is a whiffle ball game at his son’s first birthday party.

He loved the Huskers, too, even through a long period of gradual decline after three national championships. But even in frustrating times, he could always laugh at the irony of decisions that were being made. He had a lightness to his heart that did not, with rare exception, allow the blows of life to drive him to despair.

And so he served as a sort of flotation device for many, including me, a combination of humor and relentless rationality that kept us from sinking too deep. He was not just rational about science and math, but he understood the rational implications of the faith in Christ he so boldly proclaimed for all the years I knew him.

Right now I am emotional and dazed at this tragic and seemingly pointless loss. And then I start thinking of him talking to me in that uniquely nasal tone I could immediately identify if I heard it in a crowded room. He is finishing every other sentence with a rat-a-tat laugh that says, “What did you expect?” It is not a cynical question.

So much of our lives as believers is ironic. What would make Dave and me friends? How would we both marry above ourselves to women who, though born a decade apart, cannot seem to get enough of being together? Dave and I would have been stuck with each other even if we had not found so much to like in each other. But I cannot remember spending five minutes in David Swanson’s presence without laughing, even in the bad times.

You don’t lower a flag to half-mast for Ph.D. types who are computer gurus, but on the day I write this, they are lowering it for Dave. He would be laughing and saying, “Are you kidding me?” No, dear friend, we’re not. You have lived a life worthy of that. You have made a meaningful impact on so many, one life at a time, not just one professional accomplishment at a time. What you could do with your mind gave you access to our hearts. And your unselfish devotion to each of us, to your family, and to your Lord is the reason we feel not just regret, but pain, in losing you.

I know you are hearing even better commendations now. But I wanted you to hear it from me, too. Well done, beloved friend.

Related: Two funds set up to support Swanson family

Categories: Blogs, Bottom Line Ethics, Business, Family, Friends, Religion, Society, Texas A&M

My wife and I were walking up from the beach together, past a house that had a pickup truck whose bass speakers were sufficient to physically rattle the windows of our house across the street. I looked over at the truck, and an older man (and, by that, I mean younger than me) shouted at his daughter to turn the music down out of consideration for us. Her immediate reply to him before complying was, “They were young once!”

Indeed they were. Once they held hands and talked of a future together. He whispered in her ear and she giggled and pulled away, only to have him gently grab her arm and pull her back to him. He looked in those clear blue eyes and felt his heart fly away to places he never knew existed. He wooed her as a college student and married her right after. They spent restless nights sleeping in an unairconditioned house with a box fan whirring in a window and a baby in the next room. They spent a dozen years living in more than that many homes, stopping and starting a career in fits and spurts until a Ph.D. program spat out a professor equipped with an inquisitive mind, two more kids and that same blue-eyed girl. Those three kids grew to five, and the seasons flew by, hardly noticed. Life for them was a continuum, pulsing from one stage to another until all those kids were gone and the grandkids had long since begun arriving.

Only then did it begin to occur to them that they might be growing old. That they—that he—might be on the backside of his usefulness. He noticed that more of his questions were “why” and fewer of them were “how.” It was not that he just didn’t remember as much; he didn’t understand as much. Because as you get older, while still in the continuing desperate pursuit of those things you never comprehended, you realize that you are quickly being caught from behind by those things that you never knew to ask about, as well as those things you no longer understand. Those deep consternations reflect themselves not just in your specific discipline or expertise, but in music and art and culture and religion. They are accelerated by changes in technology, but they are not a result of it. All generations have faced this inevitable passage in their own ways.

I sit on the cusp of freedom and despair. My life today is the opportunity to finish strong, to fulfill many of my hopes and to see so many good things happen in the lives of those I love. It is the chance to pass the baton on to the next generation, which has already begun accelerating in the exchange lane. In fact, they are quite quickly matching my speed, which is necessary for a successful handoff.

But it is also a recognition that my contribution, my leg of the race, is reaching its end. I am still running hard, and I have to in order to keep up with them. But not for long.

There is a reason I am not running the anchor leg, and that is because I am not the fastest runner. But I have done my best on my leg. I am free to enjoy, in the not too distant future, the rest of the race from the infield. The despair comes in knowing that soon, all that will be left for me to do is cheer.

My Dad turns 99 this month. In his room hangs the picture of a confident 26-year-old, with his civilian arms wrapped around my Mom’s waist after having survived both the worst of the Pacific War and two years apart from her. The whole world lies before them—like us, a return to school, five kids, and a career of the mind. They were young once. Today, he wonders where she has gone.

The pickup truck just pulled back into the neighbor’s driveway, the speakers booming life, the future, possibilities. The guy on the porch across the street from that pickup truck watches, reflecting on what it is to have meaning and confidence without youth. He knows deep in his heart that he is one of the lucky ones, still stimulated by a meaningful job that includes the opportunity to teach, and to be influenced by, a remarkable group of college students who continue to make him feel young. And to still be carried away by those gorgeous blue eyes not just to unseen places, but to memories built together, full of whimsy and wonder.

They were young once. And, to be honest, perhaps more often than you think, they still are. The immeasurable gift of a lifetime together is hard to top, even by the highest highs of youth.

But I’d be lying if I said I didn’t want to go back and try.

Categories: Blogs, Bottom Line Ethics, Business, Family, Friends, Society, Texas A&M

Two seemingly unrelated stories in the news, one in the entertainment industry and one in the world of sports, have me thinking about how difficult it can be to summon the moral courage to do what everyone agrees, in retrospect, should be easy to do. The numerous charges of sexual misconduct against Hollywood producer Harvey Weinstein have dominated the headlines, particularly since entertainment and news are a bit hard to separate nowadays. And this week, former Baylor and Cleveland Browns wide receiver Josh Gordon revealed how he was able to pass drug tests while he was a college student and remain eligible to play.

Harvey Weinstein

While the scope and importance of these two stories may be fundamentally different, what they have in common is this—enablers are always necessary for someone to escape justice over a prolonged period of time. Weinstein was allegedly enabled by a long line of subordinates and friends, some of whom were likely on his payroll for that very purpose. Gordon claims that an assistant coach provided him with cleansing drinks and taught him how to drink them so that his system would be free of evidence he had been taking drugs whenever he was tested.

Many people would rather spend their lives around successful people than people of integrity. This is true not just because some of these people are dishonest, but because successful people can offer them things that people of integrity may not be capable of providing. These folks want to project that they are successful and that their success is merit based. This was true of numerous people engaged in the Galleon Group insider trading scheme headed by Raj Rajara

tnam, projecting skill in trading when they were really masters of getting people to divulge information illegally. Volkswagen engineers followed the orders from above to design defeat devices for their vehicles that would shut down emission controls and maximize gas mileage, except when the vehicles were being tested by emissions control experts. …Read more

Categories: Blogs, Bottom Line Ethics, Business, Texas A&M

Helen Sharkey is a felon. That sentence seems in every way to be wrong, even as I write it. Helen Sharkey is a mom of Tae Kwon Do twins, a loving wife, a faithful friend. She is a diminutive dynamo, energetically expressing truth, thoughtfully responding to questions. She is a star, a top accounting graduate of Southwestern University with a Big 4 pedigree who had a rising career in the energy industry. But, there it is again. Helen Sharkey is a felon.

In perhaps, the most eloquent expression of remorse that I have heard in many years, Ms. Sharkey told the story in my Ethics class of her fall from grace at Dynegy a decade ago. She spoke of the people who influenced her, of the pressures she felt, of the key turning points when failing to “listen to her gut” diverted her life in ways she could never have imagined. She became, with her decisions, what in retrospect is the one thing she never wanted to be: Googlable.

And that Googlability is what triggered the introspection necessary to allow her to speak about her experience to a broader audience. Since she got out of federal prison in late 2006, she has quietly raised her children with her husband and led a “normal” life out of the public spotlight. She has established the connections that have allowed her to flourish, perhaps influenced by a reticence to trust broadly that comes both from being “perp walked” and from watching others more involved in your crime never get indicted.

But her eyes were opened to the fact that in a fully searchable world, her sons were quickly coming to the age where she would have to explain that, in her own words, “Mommy is a felon.” This not only permitted introspection, it made that process urgent. Ms. Sharkey needed to understand her story so that she could explain it to two boys coming of age. And the result of walking through that process is a lucidity to her message that few people can match.

Being in that room was like watching a match dropped on dry tinder. In the midst of a draining week, I was locked on each word of her story, as was virtually everyone in the room. She spoke in measured tones, but she was able to convey the changing emotions of each stage of her ordeal in her voice and in her eyes. Standing behind a podium meant to protect her, she opened her heart and her life to a group of students I am asking to examine theirs. And she opened them to me as well.

She did not have to dramatize, because the room was walking with her through her boss’s detachment from correspondence related to the structured finance transaction that was her downfall, and through the New York meeting that sealed the deal when her boss did not backstop her. Her stomach in knots, she said, “For the first time in my life, I gave up on myself.” We could feel the impact of the Wall Street Journal article revealing the transaction, the subsequent criminal investigation, the tightening noose of the indictment, with the U.S. attorneys referring to her as “smart and articulate,” as an “alchemist.” What followed—Dynegy cutting off legal funding, losing her job at Chevron, being alongside of her father as he died of cancer—are the things that make any reasonable person shudder. She did not have to serve the five-year sentence that could have been her fate based on her guilty plea. But she felt the incalculable pain of leaving her twin babies to walk into a federal prison.

It was hard to pull the students away from her after class. I heard one say that she would stay all day if she could. Until she came to my class, I had never met Helen Sharkey. I have dealt with these issues professionally for many years. I am not purely clinical, because I care deeply about people’s outcomes. I am always rooting and praying for my students to avoid these paths. But, if they walk down them, I want to be a redemptive voice who gives them hope that there is more to life than their failure.

I have never known how to do that effectively. But I know someone who does. Her name is Helen Sharkey.

Categories: Bottom Line Ethics, Business, Crime, Politics

Would you like a recipe for driving yourself crazy if you are a control freak? Then follow your fantasy football team on the Sunday before a national election. It is hilarious for me to think that I have any control over how anyone on my fantasy football team will perform. Not only do I get incensed when Philip Rivers throws another interception, I somehow attribute it to his character, as if he was a bad guy. (By the way, I will never play him again unless, of course, that no-good Josh Freeman fails me today against the Raiders.) It is equally useful for me to read every story on both Fox News and MSNBC about how the latest “most important election of our time” will turn out.

When I was younger, I thought that I had a lot of control over my environment, and I pushed forward with decisions as though I did. This often works out well, because in areas of a person’s environment where no one is actively intervening, there is little resistance to imposing your will. For example, people will allow you to be slightly impolite or endure your mild insults that help you to get your way. In the short run this leads to the belief that you have more control than you do. In the long run, it can lead to habits of thinking that can drive you slightly bonkers. It also leads to unrequited anger, which includes muttering short syllables under your breath in traffic, random honking, and yelling at referees.

I have had multiple experiences in the last year where I have felt that my life was completely out of my control. I move from challenge to challenge, and I start noticing that more people are asking me about how I am feeling, which is never a good sign. Though I acknowledge their concern, I quickly move on to the next assignment, the next event, the next class. In a cause-and-effect world, it makes sense for me to do what I know to do. Where I can choose, I want to choose well. It is in the times that I do not get to choose that I am concerned about my response.

I am not suggesting that I should just lie down and let the world roll over me. Though my faith is central to me, I have a responsibility to act. What scares me a bit is that I can consciously recognize that a situation is beyond my control, and yet still emotionally react as if it ought to be something I fix. I think that this is unhealthy, and I see it reflected in a number of scandals in the business world.

Insider trading is an attempt to control the uncontrollable, or at least to control what is not justly supposed to be controlled. Raj Rajaratnam was a master of the game in his years running the Galleon Group, mining all the information he could regardless of the legalities that might be barriers to obtaining it. He used many people, including the former Goldman Sachs director, Rajat Gupta, to help provide him with the ability to control the uncontrollable. And after his conviction last month, Gupta will be joining Rajaratnam in federal prison as a result.

Corporate executives are often expected to control the uncontrollable. Public companies receive annual opinions not just on their financial statements, but on their controls. Of course, the quality of their planning will impact the company’s results. But pervasive economic trends, taxing structures, and commodity prices can only be planned for to a limited extent. There is no way to eliminate all of the uncertainty, despite marketplace expectations. Many corporate executives have crashed their companies by misleading investors, trying to give the impression they were overcoming forces beyond their control. (For those of you who are concerned, I am currently tied in my fantasy football game because two of my players are totally worthless.)

As a father of five, I see this tendency manifested in my attempts to control my children in areas where I ought to give them choice, even though they are transitional adults closing in on independence. When children are younger, we can control much of their environment, and we make many of their choices for them. We cannot protect them from every harm, but it is reasonable for parents to intervene and make choices that will help prevent serious damage. We can control where they go to school, who they play with, and what they eat. But we have to transfer that control to them, and our attempt to retain control beyond the days they are entrusted to us can only lead to long-term dysfunction and their inability to stand on their own. Even though our youngest son is a high school senior, we are still learning in this area. (While I was writing this paragraph, Josh Freeman completed two passes totaling 84 yards to Vincent Jackson, who is also on my fantasy team. I am now ahead by 21 points, and I am, by the way, a genius for having them both on my team. Sit down, Philip Rivers!)

If I am convinced that it can lead to various negative outcomes, how do I stop trying to control the uncontrollable? I would love to hear from you on how you have learned to let go of those things that you cannot control. Meanwhile, I need to go check and see what the polls say about the swing states so that I can question the credibility of the sources that disagree with me.

Categories: Athletics, Business, Politics

A former student recently asked me to write about the Occupy Wall Street (OWS) movement. Today’s paper reported our own OWS march in College Station though, admittedly, it consisted of only about 60 people. I read an interesting article the other day in The Wall Street Journal that focused on the legitimacy of concerns that college is overpriced, one of the causes of debt that has led OWS supporters to argue that the American system is unjust. The link between quality and price in American universities is worth a column, but I will save that for another day.

What I would like to focus on instead is a common thread in many problems today—our addiction to debt. There is a proverb that says, “The rich rules over the poor, and the borrower becomes the lender’s slave.” In my view, this has always been true. I find it humorous that people protest “greedy bankers.” It is like protesting hot summers in Texas. Bankers are greedy because they make money off their money. Ethics and banking are the lubricants of the capital markets, as we teach in Mays Business School. Only one is free and the other is a $500 oil change. Bankers do not produce anything; they enable others to produce things. And their goal is to make as much money off their money as possible.

All the big banks recently decided to raise debit card fees. Since it included bailed out banks, many people objected strenuously. The main problem I had with the policy change is that banks have spent the past ten years offering incentives to addict people to their debit cards, and then they turned around and charged for the behavior they incentivized. But how is that different from almost all marketing ploys, like satellite TV services offering me a twelve-month entry price and then continually increasing my bill once I am addicted to ESPN? Airlines have used checked bag fees to become profitable. But the master of this technique is the federal government. Just read your cell phone bill for all the fees they have dreamed up to charge you.

We still have control of the situation. Debit cards are broadly available from other financial institutions, and for most people a credit union will do everything a bank can do. And my biggest problem with Occupy Wall Street is that it implies that we have no choice in matters that lead to bankers being the master and borrowers being mistreated. Most debt is volitional, whether we admit it or not. Even where it is necessary, the amount of debt is volitional. If you speculatively borrow to buy a bigger house than you can afford because you think its value will increase, or because you want to live a certain way, you expose yourself to risk. I know, because I once bought a house that I could not afford. When I finally sold it, I walked away with $400 of my equity and the charred smell of the flame that almost consumed me financially. But it was my choice to do it.

In contrast, my son, who has had a good job for five years and is wealthier than I am, lives in a 500-square-foot apartment. And that is a step up. He used to live in somebody’s basement. If you use your student loan to fund a Starbucks lifestyle or an apartment in one of the high end complexes with all the amenities, you are presuming your ability to repay. And you have put yourself in a position that you may seriously regret one day.

There was a time when people saved to go to college. People argue all the time that the cost of college has escalated so fast that there is no way for most people to do that anymore. I empathize, as my fourth child is in college, and my fifth is a year and a half away. But my father fought a world war, and worked, and saved, and scraped to get his bachelor’s degree at age 31. He did not feel he had the inherent right at age 22 to become the research physicist he eventually became. He was convinced he had other duties, and he fulfilled them. He was a mechanic, and a bus driver, and a Marine before he was a white-collar worker. And while he was in college, he lived with my Mom and my brother in a small trailer that they pulled behind the car.

The debt that homeowners and college students burden themselves with is no different than Greece borrowing itself into oblivion to finance a welfare state. People riot rather than give up their benefits and say that their treatment is unjust. But Greece is a slave to their lenders, whether they are French, German, British, or American. And if they will not adjust their behavior, their economy will collapse completely. Even now, consideration is being given to their ejection from the European Union.

We are well on our way in the U.S. to doing the same thing. We are continuing to run obscene deficits that are unnecessary because we are addicted to our lifestyle. Serious discussions of how to cut are dismissed, and state-level cuts are objected to as cruel and unjust. We can yell all we want, but this will not go on forever. There is a day when you have to pay. And our “bankers” are not letting us borrow with our best interests in mind. They are doing it to make a buck. And when they can’t, they will call that loan.

So occupy Wall Street if you must, but you can’t change the proverb. The borrower is slave to the lender. What I plan to do is figure out how to eliminate my remaining debt and determine how much extra work my kids and I need to do to pay for their college.

And when it’s all paid off, I’ll get my lawn chair and come out to watch the protests.

Categories: Business, Society

Rich Kinder is a living parable.  Fifteen years ago he was denied the job he really wanted—CEO of Enron.  Instead, he was passed over for a financial engineering wunderkind, Jeff Skilling, who famously went on to crash and burn the seventh largest U.S. company.  Kinder went his own way, purchasing a modest pipeline operation that Enron no longer valued because of the “sleepy” nature of the business.  To Enron’s executives, there were better ways to make money, and they were the ones smart enough to leave the old ways behind and create new and better markets.  Jeff Skilling is serving 24 years in prison; Rich Kinder, on the other hand, is reportedly the richest person in Houston.

Kinder took that modest pipeline and transformed it through a series of acquisitions into what is now Kinder Morgan, Inc., which just announced that it would purchase El Paso Corp. for $21.1 billion, creating what would be the fourth largest American energy company.  It is a company with the potential to dominate the movement of natural gas across the U.S., particularly from the rapidly developing shale formations that are transforming the face of the energy industry.  Speculation that those formations may hold 100 years’ worth of natural gas has led to an explosion of capital investment, despite depressed prices for natural gas.  And Kinder Morgan will essentially charge for the transport of this gas, regardless of energy prices.

One can imagine the disappointment that accompanied Kinder’s denial of the Enron CEO job by Ken Lay, someone he had known since their days at the University of Missouri.  There was no way he could know what he was being protected from, but he did not go quietly into retirement or rest on his laurels.  Kinder knew pipelines, and Enron’s roots were as a pipeline company.  He knew what he had to offer, and he knew there was real value in that business, regardless of whether Ken Lay valued it or not.  And he went on to take his company private, then IPO it again, while maintaining a massive personal stake.  Forbes estimated his net worth this past March at $7.4 billion.

Here at Mays Business School, we do a good job of preparing our students for success.  What is much harder to do is to prepare students to fail, to fall short of goals, to finish second when only winning seems important.  The character that comes from remaining true to who you are in the face of obstacles, of unfair decisions, of shortsightedness on the part of others, is only developed through painful transformations.  Sometimes unfairness and failures make the wheels come off of lives that seem to be doing just fine.  Other times, these injustices fuel future successes.

But it is important for me to remind my students that they always get to choose their response to circumstances, even if they do not get to choose the circumstances themselves.  It is easier to complain than it is to get better.  And there are always sympathetic ears ready to help us wallow in our misery.  But that path is a dead end.

When we send students out from this place, they are works in progress.  What they are made of can only be revealed by time and experience.  They can protest in parks if they are unemployed, or they can improve their resumes and knock on doors.  They can leave when they are passed over for a promotion, or they can use that motivation to chart a different course, perhaps one they had not thought of before.

I meet very few students who expect to go out of here and fail.  And those who have failed are too seldom invited back to our classrooms to tell their stories.  The irony is that the very seeds of our success often dwell in the rotting fruit of our failures.  The opportunity to become someone they have never imagined comes when the barriers in their planned paths are insurmountable.

There is more than irony in Rich Kinder’s story.  There is the sweet fragrance of justice, of the end result being beyond all expectations.  In the end, Rich Kinder’s bio is a demonstration of the victory of substance over form.  And in a world that glorifies vacuous entertainers and makes people rich who have not really created anything, it is nice to see someone succeed who stuck to basics, thought long-term, and connected with other people of substance.  Whether the Justice Department allows the acquisition or not, I have no doubt that Rich Kinder will continue to overcome obstacles.

What I hope to learn from him is how to turn my biggest disappointments into greater opportunities.  Is anyone out there with me in wanting to learn how?

Categories: Business

Follow

Follow this blog

Get every new post delivered right to your inbox.

Email address