US Debt deal reached to avoid default, what others are saying?

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What China, Others, Are Saying About US Debt Deal?

Debt ceiling raised...again.

President Barack Obama said Sunday night that both houses of Congress finally reached an agreement to reduce the budget deficit and avert a debt default that would have likely sent the country into a recession.

“Leaders of both parties, in both chambers, have reached an agreement that will reduce the deficit and avoid default — a default that would have had a devastating effect on our economy,” Obama said in his remarks to the White House press Sunday shortly after the bill was signed. The first part of the debt deal cuts nearly $1 trillion from the federal budget over the next decade. Exact details were not immediately available.

“The result would be the lowest level of annual domestic spending since Dwight Eisenhower was President,” Obama said. The debt limit and cut spending between $2 trillion and $3 trillion.

The Economic Times of India polled readers who said overwhelmingly that the Indian market would be impacted on Monday as investors in the US digest this weekend’s news. A total of 85% of the paper’s readers polled on line said it would impact India’s market all week.

Russian newswire columnist Andrei Fedyashin said recently, before Sunday’s deal, that “cuts in social spending and higher taxes are still the only way of reducing budget expenditures and a country’s sovereign debt.”



Yao Yang, director of the China Center for Economic Research at Peking University, weighed in at China Daily. He said that the US deficit problem “is ultimately the result of the conundrum of a welfare state following the capitalist system. Both are uncompromising ideals cherished by a substantial percentage of the population. The fight will resurface in the future even if the present deadlock is broken. There is a lesson for other countries here. The best a country can do is to fence off the contagious effects of such fights and rely more on the domestic economy for further growth.”

Also reprinted in China Daily, Mohamed El Erian, CEO of PIMCO, says, the next few weeks will provide plenty of political drama. “The baseline expectation, albeit subject to risk, is that Democrats and Republicans will find a way to avoid disruptions that would damage the fragile US economy, but that the compromise will not meaningfully address the need for sensible medium-term fiscal reforms.”

In Brazil, an article in Folha de São Paulo, the country’s largest daily newspaper, said that Americans woke up too late to its serious spending problems. Not only government spending, but consumer spending as well. A foreign correspondent for the paper interviewed US think tanks and scholars who said that the average US citizen was “uninformed” about the country’s economy and pending debt crisis. Despite having nearly every country south of Texas run into similar debt dead ends, the US — printers of the world’s reserve currency and the largest economy — didn’t seem to flinch when society, and government, became overweight with debt. The US is in a unique world situation because of its status as world’s reserve and trade currency, and issuers of the most trustworthy debt in the market.

“Americans are not well informed about the economic crises that occurred in other countries to learn from them,” said Isabel Sawhill, an analyst from the Brookings Institute in Washington. “They don’t see any parallels with crises in other countries because they think the US has the capacity to resolve all problems.
The population knows there is a problem, they just don’t know to what extent or where it comes from.”

Linda Bilmes, a former government consultant turned Harvard lecturer in Cambridge, the main problem with the debt deal is taxes and political ignorance over tax laws. “The biggest reason our debt is so high is because George W. Bush cut taxes two times exactly when we were spending money on two wars,” Bilmes told Folha. “In the last two major US wars, taxes went up to support those expenditures.”

See: White House, Congress Reach Debt Deal

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Going global – a new breed of executive MBA

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BY Matt Symonds

The world’s top full-time MBA programs have enjoyed several years of rising applicant numbers, fuelled by the struggling economy and strong international demand, notably from Asia. But with an improving global jobs market, many schools are now seeing a fall in full-time MBA applications. However, what may be bad news for one part of the business school portfolio, is likely to be good news for another.

With no need to sacrifice your job, the Executive MBA is looking like a sound investment for seasoned managers with an eye on a place in the C-suite. The most recent survey conducted by the Executive MBA Council reported a 3 per cent increase in enquiries on the previous year. Despite one or two notable exceptions (the Harvard Business School and Stanford GSB are yet to offer an EMBA course) it appears that schools around the world have been taking note, and placing international expansion and global business practice at the top of the executive agenda.

Trium, a Global Executive MBA programme run jointly by NYU-Stern school, HEC Paris and the London School of Economics, is celebrating its tenth anniversary by adding a second cohort in 2012. “We are now expanding this program because both the need and the value of having a global perspective have increased in the intervening decade,” explains Bernard Ramanantsoa, Dean of HEC Paris. “The program integrates international economic, political and social policy into the business curriculum, which are aspects often neglected in traditional business curricula yet are widely accepted as critical to successful global business.”

More companies are also turning to business schools to help develop managers who can lead teams in a global business environment, and consider programs such as OneMBA, a partnership of five leading schools on four continents, as part of their institutional training platform. For Craig James, a Global Controls Advisor at ExxonMobil, the Global Management and Leadership course on the OneMBA program, helped strengthen his cultural awareness, and enabled him to more effectively manage global work teams.  “I took what I learned on the weekends and applied it on Monday mornings.  My OneMBA global study team was a mirror image of my global team at work.”



Another benefit of the modular delivery format favored by the new wave of executive MBA programs is that distance from the campus is no longer an issue. The University of Cambridge’s Judge Business School recently launched its own EMBA and is already welcoming students from far beyond its UK location. The program brings students together once a month, supported by a virtual learning platform, and has meant that students in the first class include a VP from the Walt Disney Company, who makes the monthly commute from Los Angeles.

At first glance therefore it may appear that the global learning initiative has been seized by European schools. Spanish school IESE has recently announced a new EMBA programme based in Sao Paulo, to help develop executives across Latin America. The London Business School now offers it’s Global EMBA in both London and Dubai, as well as a joint programme with the Columbia Business School and Hong Kong University, while rival school INSEAD has further expanded its global footprint, adding an Abu Dhabi campus to existing EMBA options in Fontainebleau and Singapore. In addition to Trium, French Grande Ecole, HEC Paris offers no less than five locations for their executive MBA, in Paris, Beijing, Shanghai, St. Petersburg and Doha in Qatar. The school ensures that all participants follow the same core curriculum and receive the same fundamental content, regardless of where they enrol. Pierre Dussauge, academic director of the EMBA, says the benefit of this is clear. “Our aim is to build a strong participant network across all five locations. If a participant is based in France, but completes a module in China, Russia or Qatar, he or she will be able to build a network of peers around the world.”

But US business schools are determined not to be left behind. The Darden school at the University of Virginia launches its GEMBA in August this year with a clear aim to bring students to the five key markets they feel will figure most prominently in shaping business in the coming century: China, India, Brazil, the US and Europe. Maureen Wellen, Assistant Dean of the Global EMBA Programme at Darden confirms that the program was driven by clear demand from the market, “We asked a lot of people around the world and there was definitely an appetite for the school’s expertise globally – especially from people who were unable to come to Darden for the two-year residential program. Also, it’s clear that students in both the US and abroad want to attain a level of global literacy that most traditional programs simply cannot offer.”

The school’s dean, Bob Bruner, adds to this sentiment. He recently chaired a report by the AACSB accrediting body entitled The Globalisation of Management Education, which suggested that the trend for global programmes is only going to continue on an upward curve. He says, “Business schools have been slow to react to the growing importance executives place on international experience. The rate of globalisation is only going to increase and it will be a disruptive force for which many more managers need to prepare.”

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What Great Entrepreneurs Have In Common?

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By Drew Hansen Prime Movers

Image via Wikipedia What does it take to be a great artist?

Richard Russo evokes this question near the end of his 2007 novel, Bridge of Sighs. In it, he chronicles Lou Lynch, Jr. (Lucy) and his friend Bobby Marconi, who grew up together in a small town in upstate New York. The two friends couldn’t be more different. In sixty years, Lucy has never left his hometown, but Bobby on the other hand, leaves as soon as he graduates high school, fleeing Thomaston never to return. He eventually becomes a world-famous artist and lives the rest of his life in Venice. After Bobby passes away, a reporter interviews Lucy to learn more about his friend’s childhood.

On Saturdays, the two friends took turns surfing in the back of Lou Sr.’s milk truck. The thrill came when the truck, turning unexpectedly, caused one or the other to lose his balance and crash into the side.  Unlike Lucy, who braced himself before turns, Bobby let go and even shut his eyes. In Lucy’s words, “Bobby wanted what was coming down the road to be a surprise, even if it meant he got hurt.”

In my previous post, I explained that entrepreneurs are similar to artists because they’re outsiders. In my opinion, Bobby’s behavior represents a willingness to be vulnerable, another trait that entrepreneurs and artists have in common.



Anthony Tjan, founder of the VC firm Cue Ball, calls vulnerability the defining trait of great entrepreneurs. He describes it this way:

Active vulnerability comes from engaging in a contemplated risk that considers and hopes for the payoff, financial or otherwise, that will be worth the effort. Active vulnerability is in essence proactive and informed risk-taking.

I describe entrepreneurial vulnerability differently.

An entrepreneur’s work, like that of an artist, is a form of self-expression. When painting, an artist injects her canvas with her beliefs and values — knowingly or unknowingly — and the completed painting becomes an extension of herself. Likewise, when an entrepreneur founds a company, she imbues it with her opinion of how the world ought to be. It, too, springs from her deepest yearnings, making it unique and personal. There is no guarantee that the audience or market will accept her work. Vulnerability, then, is the willingness to reveal one’s true self and risk misunderstanding, ridicule, and even rejection.

At the core of human experience is a longing to be accepted. Some people, to satisfy this innate desire, conform to the norms around them, but in the process, compromise a part of themselves. Other people, the misfits, resist the temptation to fit in and remain true to themselves. As exhausting and demoralizing as it can be, the misfits’ willingness to defy norms gives life its nuance and beauty.

Dan Pallotta explains where this strength comes from:

To embrace the misfit in oneself is to be vulnerable. It is to forsake the easy acceptance that comes with fitting in and to instead be fortified by a kind of love, really. A love of life, a love of wonder, and, ultimately, a sustaining love for oneself. Far from egoism, that love for oneself is a measure of one’s love for others, for humanity. And it is only from love that great ideas can be born.

The greatest artists, entrepreneurs, and leaders don’t seek acceptance. Instead, their love and compassion fuel a yearning to make a ding in the universe and persevere despite rejection.

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