Trends

A Framework for Stopping Short Termism in Business 

The Atlantic: “A growing group of business leaders is worried that companies are too concerned with short-term profits, focused only on making money for shareholders. As a result, they’re not investing in their workers, in research, or in technology—short-term costs that would reduce profits temporarily. And this, the business leaders say, may be creating long-term problems for the nation.”

“The Aspen Institute and its signatories have come out with a framework that they hope will discourage this kind of short-term thinking. Short-term thinking is bad for America, they say, because the country’s economic health depends on long-term investments that will pay out over time. What’s more, they argue, short-term thinking shouldn’t be paramount for the majority of investors; most equity is held by pension funds and other institutional investors who need their assets to perform well over the long haul.”

The World Today Looks Ominously Like It Did Before World War I

Washington Post: “To some, it looks ominously like another moment in history — the period leading up to World War I, which marked the end of a multi-decade expansion in global ties that many call the first era of globalization.”

“In a recent report, Josh Feinman, the chief global economist for Deutsche Asset Management, says that the world could see a substantial backsliding to globalization in decades to come. After all, he writes, we have seen it happen before, in the years of chaos and isolationism that encompassed the First and Second World Wars and the Great Depression.”

“As before World War I, the second great wave of globalization led to a surge in immigration and increasing inequality in some countries, which likely helped to trigger the current backlash.”

When Leaders Are True to Their Lies

Ricardo Hausmann: “What does the Venezuelan domestic payments crisis have in common with the death of the North American Free Trade Agreement, announced by Wilbur Ross, US President-elect Donald Trump’s pick to be the next US Secretary of Commerce? These two seemingly disparate events are linked by the odd relationship with the truth that both Trump and the Chavista regime seem to share.”

“All governments lie. A few believe their own lies. But things get dangerous when they act in order to be true to their lies. That is the trap into which Venezuelan President Nicolás Maduro’s government has fallen, and it seems to be the logic behind the decision articulated by Ross to withdraw from NAFTA.”

If the U.S. Won’t Pay Its Teachers, China Will

Bloomberg Tech: “Mi is 33 and founder of a startup that aims to give Chinese kids the kind of education American children receive in top U.S. schools. Called VIPKid, the company matches Chinese students aged five to 12 with predominantly North American instructors to study English, math, science and other subjects. Classes take place online, typically for two or three 25-minute sessions each week.”

“In China, there are hundreds of millions of kids whose parents are willing to pay up if they can get high-quality education. In the U.S. and Canada, teachers are often underpaid—and many have quit the profession because they couldn’t make a decent living. Growth has been explosive. The three-year-old company started this year with 200 teachers and has grown to 5,000, now working with 50,000 children. Next year, Mi anticipates she’ll expand to 25,000 teachers and 200,000 children.”

The Internet Is Broken. Starting from Scratch, Here’s How to Fix It.

“My big idea is that we have to fix the internet. After forty years, it has begun to corrode, both itself and us. It is still a marvelous and miraculous invention, but now there are bugs in the foundation, bats in the belfry, and trolls in the basement,” argues Walter Isaacson, the CEO of the Aspen Institute.

“There is a bug in its original design that at first seemed like a feature but has gradually, and now rapidly, been exploited by hackers and trolls and malevolent actors: its packets are encoded with the address of their destination but not of their authentic origin. With a circuit-switched network, you can track or trace back the origins of the information, but that’s not true with the packet-switched design of the internet.”

“The lack of secure identification and authentication inherent in the internet’s genetic code has also prevented easy transactions, thwarted financial inclusion, destroyed the business models of content creators, unleashed deluges of spam, and forced us to use passwords and two-factor authentication schemes that would have baffled Houdini.”

“If we could start from scratch, here’s what I think we would do.”

U.S. Power Will Decline Under Trump, Says Futurist Who Predicted Soviet Collapse

Motherboard’s Nafeez Ahmed spoke with Nobel Peace Prize-nominated sociologist Johan Galtung about the future of American power.

“Galtung told Motherboard that Trump would probably continue this trajectory of accelerated decline—and may even make it happen quicker. Of course, with typical scientific caution, he said he would prefer to see what Trump’s actual policies are before voicing a clear verdict.”

Galtung: “He [Trump] blunts contradictions with Russia, possibly with China, and seems to do also with North Korea. But he sharpens contradictions inside the USA…”

“As a trans-border structure the collapse I am thinking of is global, not domestic. But it may have domestic repercussion, like white supremacists or even minorities like Hawaiians, Inuits, indigenous Americans, and black Americans doing the same, maybe arguing for the United States as community, confederation rather than a ‘union’.”

Trump’s Threat to the Constitution

“On July 7, the presumptive Republican presidential nominee, Donald J. Trump, met privately with House Republicans near the Capitol. I was present as chief policy director of the House Republican Conference,” former independent presidential candidate Evan McMullin writes for The New York Times.

“A congresswoman asked him about his plans to protect Article I of the Constitution, which assigns all federal lawmaking power to Congress… Mr. Trump interrupted her to declare his commitment to the Constitution — even to parts of it that do not exist, such as ‘Article XII.’ Shock swept through the room as Mr. Trump confirmed one of our chief concerns about him: He lacked a basic knowledge of the Constitution.”

“In our nation, power is shared, checked and balanced precisely to thwart would-be autocrats. But as we become desensitized to the notion that Mr. Trump is the ultimate authority, we may attribute less importance to the laws, norms and principles that uphold our system of government, which protects our rights. Most dangerously, we devalue our own worth and that of our fellow Americans.”

Fake News Isn’t a Recent Problem in the US—It Almost Destroyed Abraham Lincoln

Quartz: “Abraham Lincoln was more than just a foe of slavery. He was also a mixed-race eugenicist, believing that the intermarriage of blacks and whites would yield an American super-race.”

“Or at least, that’s what newspapers in 1864 would have had you believe. The charge isn’t true. But this miscegenation hoax still ‘damn near sank Lincoln that year,’ says Heather Cox Richardson, history professor at Boston College.”

“The parallels to today are easy to see. Back then, telegraphs and other technological changes let news spread swiftly and gave rise to more starkly partisan newspapers. Public trust in government was in tatters. With little consensus or authority over the truth, the purest gauge of veracity was gut feeling. And in an America so deeply divided—especially over differences about race—what tended to feel real were stories that confirmed fears and biases.”

The Real Legacy in Jeopardy Under the New Congress? LBJ’s.

“To be sure, Obama’s legacy is very much on the line. Yet remarkably, so is that of Lyndon B. Johnson,” Josh Zeitz writes for Politico.

“With majorities in both houses, congressional Republicans under the leadership of House Speaker Paul Ryan have signaled their plans to disassemble not just the Affordable Care Act, but also Medicaid and Medicare; to steer federal education policy away from public schools and toward charters and vouchers; to roll back voting rights and civil rights enforcement; and to make steep cuts to nutritional programs. And, despite the fact that many of these changes could have negative consequences for Trump’s base, the president-elect hasn’t signaled any resistance.”

“But before the GOP sets about the work of dismantling Lyndon Johnson’s legacy, it’s helpful to look back 50 years and consider what America looked like before the Great Society. Spoiler alert: Much of it wasn’t great.”

Stanford Researchers Say Young Americans Have No Idea What’s News

Quartz: “Adolescents may be authorities on social media, but they’re not so good at identifying advertising: According to a Stanford University study, 82% of middle-schoolers failed to differentiate between news stories and ‘sponsored content.'”

“According to the study, more than two-thirds of middle-school students failed to flag as biased a post written by a bank executive and arguing for young adults to pursue more financial-planning help. Likewise, some 40% of high-school students believed a photo and headline that suggested deformed daisies were evidence of toxic conditions near Japan’s Fukushima Daiichi nuclear plant. The photo included no source or location tag.”

“Researchers found that what tripped students up most were posts with big, flashy elements, which tend to command more attention than the story’s actual source. Teens also ‘judged the credibility of newsy tweets based on how much detail they contained or whether a large photo was attached, rather than on the source,’ the Wall Street Journal reported.”

Why the Third Wave of Globalization May Be the Hardest

The Economist: “Bill Clinton once called globalisation ‘the economic equivalent of a force of nature, like wind or water’. It pushes countries to specialise and swap, making them richer, and the world smaller. In ‘The Great Convergence’, Richard Baldwin, a Geneva-based economist, adds an important detail: like wind and water, globalisation is powerful, but can be inconstant or even destructive. Unless beloved notions catch up with reality, politicians will be pushed to make grave mistakes.”

“Continuing the sports analogy, Mr Baldwin says that today’s trade is like the coach of a top team being allowed to offer his services to underdogs. The coach gets rich from the doubled market for his services, while the better team gets a sudden surprise from the newly skilled competition. Mr Baldwin says that discontent with globalisation stems in part from an ‘ill-defined sense that it is no longer a sport for national teams.'”

How the Fear of Death Makes People More Right-Wing

Bobby Azarian: “…a highly influential and experimentally verified theory from social psychology predicts that, as long as an existential threat looms, the world will grow ever more divided and increasingly hostile. Terror management theory (TMT) explains how and why events that conjure up thoughts about death cause people to cling more strongly to their cultural worldviews – siding with those who share their national, ethnic or political identity, while aggressively opposing those who do not.”

“Another mortality salience study on aggression conducted on both Iranian and US college students shows disturbing results. One group of students was asked to ‘jot down, as specifically as you can, what you think will happen to you as you physically die,’ and to describe the emotions aroused. Participants in the control condition were given similar questions related to dental pain. The results showed that Iranian students who were made to think about death were more supportive of martyrdom attacks against the US, while those in the control condition opposed them. Similarly, death reminders made US students who identified as politically conservative more supportive of extreme military attacks on foreign nations that could kill thousands of civilians.”

What Americans Can Learn from Britain’s Vote for Brexit

Heather Conley: “For those who are unsure of what will happen in the United States over the coming weeks and months, it’s instructive to watch how the UK has fared over the five months following its shocking referendum, and draw some lessons about what to expect in America after Donald Trump’s stunning victory.”

“Real anger: As soon as they regain the ability to form words, establishment anger will kick in and it will be visceral… In the United States, there will be soul searching on polling and data-driven models; the wrong candidate; the role of the media; Russia’s suspected interference in the election and the FBI’s mismanagement of Hillary Clinton’s private email server investigation. For Clinton supporters, grief will eventually give way to anger.”

“Agents of change meet institutional reality: Members of the Leave campaign who made the case that exiting the EU would be quick and allow 350 million pounds per week ($436 million) to be diverted to the National Health Service now confront bureaucratic and institutional reality. As Trump will soon discover, he and his future administration are bound by checks and balances, laws and institutions. Brexit is entering this balancing act now as parliament seeks to have greater say on the government’s EU negotiations.”

Why CEOs Are Getting Fired More 

James Surowiecki: “The predicament of modern C.E.O.s may seem surprising, given their prominence and lavish compensation. Top executives everywhere are paid more than they used to be, and the U.S. has led the way; American C.E.O.s earn, on average, two to four times as much as European ones and five times as much as Japanese ones. Yet it’s precisely these factors that make C.E.O.s vulnerable, because the expectations for their performance are higher.”

“In that sense, the increasing willingness of boards to fire the C.E.O. is actually the flip side of a fetishization of the position that began in the eighties. In Ralph Cordiner’s day (and in Japan maybe still), belief in a C.E.O.’s power to transform a company was limited. But today’s cult of the C.E.O. is founded on the belief that having the right person at the top is the key to success—from which it follows that a failing company should show its boss the door.”