March 22, 2016
Book Club: Peter Conti-Brown’s Response - Is Democracy Good For The Fed?
Posted by David Zaring

My thanks to my inimitable friend and colleague David Zaring for hosting this book club and for inviting me to respond. It’s a real pleasure to be back among the Glomerati—my first venture into academic blogging was on these digital pages back in 2011, including a real-time record of my finding the primary source for the “punch bowl” metaphor that figures so prominently in my book. I still love those stories about Stanford’s Erika Wayne, equal parts document sleuth and librarian.

I wanted to write a few responses to the excellent posts from David, Matt, and Usha and in the process write a bit more about what I see as the central intellectual puzzle of Federal Reserve independence, governance, and accountability, which is this: how can such a technical field benefit from democratic processes without corrupting the entire enterprise? As I wrote, I realized I was going to end up droning on and on, so I’ll keep this a bit more limited than the quality of these responses warrant.

This framing gets at the pith of Matt’s first post. He asks, “is it okay to ‘Bork’ a Federal Reserve appointee?” This question can be broken into two—should there be a more searching assessment of Fed appointees subject to the Appointments Clause, and what is the standard at which the senatorial consent should be withheld?

On the first, I think the answer is a resounding yes, with one clarification. The more searching assessment I would hope to see would not necessarily be at the Senate level alone—we’ve had plenty of closed-door politicking on Fed appointments that have led to some extraordinary appointments and also some very regrettable decisions. On the unfortunate side, I’m thinking of Senator Shelby’s decision to block Peter Diamond from a Fed governorship because Diamond was “unqualified,” just as he received the Nobel prize in economics. I’m thinking, too, of the regrettable—and hopefully temporary—decision to “pair” Fed appointments on a partisan basis, such that Jeremy Stein (a Democrat) could only get through the Senate with Jerome Powell (a Republican), despite no partisan balancing requirement in the Federal Reserve Act. We don’t need more Senators trying to play fast and loose with Fed appointments; we need more public attention on these appointments.

An example of this that I find exactly in line with my vision of a successful public engagement on the Fed was in the summer of 2013 when the Obama Administration leaked that the president was considering Janet Yellen and Larry Summers for the Fed Chairmanship, and leaned Summers. The reaction was swift and very public: from every corner of the democracy came searching assessments of these two proto-candidates’ personalities, histories, ideologies, expertise, and more.

At the time, some lamented this attention to the Fed from outside the temple of full-time Fed watchers as corrosive and lamentable. I think they are exactly wrong. There was plenty of frivolity, gossip, and consideration of extraneous factors in the public vetting we saw in Yellen vs. Summers. But the level of public attention was also impressively substantive. My favorite example in this phenomenon was the non-ironically titled “Seventeen academic papers of Janet Yellen’s that you need to read.” (Full disclosure: I used to work indirectly for Summers at Harvard and continue to have enormous respect for him.)

To Matt’s first question, then, I would like to see more of this kind of public attention to these appointments. The authority of the Fed governors is extraordinary. It’s important that the public have a role in selecting them so that their values are as known as they can be.

To the second question—when should Senators reject a candidate?—I’ll confess something that may make my liberal friends cringe. I’m not convinced that Robert Bork himself should have been Borked. I would prefer a model of Senatorial advice and consent that looked much more like a brake on cronyism than on a sustained attack on a candidate’s (or the sponsoring Administration’s) politics. The Senators’ role, then, is to prevent presidents from rewarding their talentless but politically or financially connected friends with jobs that require policy expertise. It’s not to attempt a redo of our most essential of institutions, the quadrennial presidential election.

To take Supreme Court history (not to say the Supreme Court present) as an example, there was simply no question that Bork was qualified to sit on the court, even if his values and judicial philosophy (and beard?) were out of sync with the Democratic and perhaps American majority. But minus the beard, what about Bork was different from Antonin Scalia, who sailed through the nomination process? Not much that could be known at the time. And it’s not clear to me that the kind of judging we see in the jurist who took Bork’s place—Anthony Kennedy—is better for our democratic institutions, even as I have endorsed and celebrated some of the outcomes in cases that make Kennedy so famous.  

If I were a Senator in 1987, then, I would’ve voted for Bork and then sought to campaign hard in 1988 to say that while qualified, we needed justices of a different philosophy much more likely to be sponsored by a Democratic president than a Republican one. At the same time, I would’ve felt more comfortable voting against Abe Fortas (given the air of scandal and undue proximity to President Johnson) and felt very comfortable voting against Nixon’s nomination of Harrold Carswell (about whom—in his defenseSenator Roman Hruska said “Even if he is mediocre, there are a lot of mediocre judges and people and lawyers, and they are entitled to a little representation, aren't they?”). Qualifications, not politics.

It’s the same analysis for the Fed. There are a few Governors who I think should not have been nominated given their abundant lack of anything except a connection to the President. And as mentioned, there are others who were dinged because of their perceived politics despite sterling credentials. I would want to see more public attention on the expertise and less of the politics, recognizing with Churchillian sobriety that the democratic process will lead to all kinds of regrettable excesses. It’s just better than anything else we might design to take its place.

On Matt’s other post, his hypothesis that “Fed appointees cannot have the expertise necessary to do their job without also being wed to some of the economic and banking orthodoxies that led to the 2008 financial crisis,” I say that we should have that debate. Not just in the Senate Banking Committee hearing room, but in the blogosphere, editorial pages, academic conferences, and around the water cooler. Let’s inquire about what a potential Fed Governor believes about the world and the Fed’s place in it before we hand over a vote that can influence the development of the global economy. The stakes are just too high to leave it to backroom deals. And this is the overarching point: politics is already happening in and around the Fed. To pretend otherwise is fantasy. The question is whether those politics will be little-d democratic or whether they will be something else.  

David highlights the essential importance of looking beyond traditional methodological or institutional paths in trying to get a sense of how agencies work in practice. Like anyone, I’m likely to overemphasize my own methodological approach over others. For example, I am decidedly skeptical that indices of central bank independence coded on the basis of central bank charters tell us much of anything. I think the question of “independence”—to the extent it’s a coherent question at all—is better explored through the methods of narrative history rather than quantitative econometrics. But that’s the point: we need to have multiple approaches in case my view is filled with blind spots and otherwise limited—narrative history isn’t great for doing a 100-nation study, for example.

Finally, I’m delighted Usha brought in her excellent perspective on “fetishization” of independence, an article that has shaped my thinking over the years. I think she’s exactly correct. I’d even go a step further and say that the term itself is devoid of much or any analytical content. Part of my aim in this book is to prompt readerly skepticism anytime anyone—whether in defense of the Fed or in attack—invokes “independence” as the support for their proposition. As I argue at length, and as Usha makes clear in the corporate governance context, Fed independence on the ground is not what those who rely on it have supposed it to be. 

Again, my thanks for taking the book seriously and providing a wonderful forum for discussing it.

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March 17, 2016
Book Club: How Does The Fed Actually Work, And How Can We Tell?
Posted by David Zaring

Peter's book on the Fed represents, among other things, a take on how you figure out what a particular government institution is up to.  You could try to do this quantitatively, especially if the part of the Fed you care about sets interest rates.  What market conditions predict what the Fed is going to do?  You can also do this by going big history, and critical as a matter of policy.  That's what Alan Meltzer has done in his two volume history of the Fed, which processes an enormous amount of archival information - minutes, policy papers, etc - to describe what the Fed has done.  These days, Meltzer often finds something to criticize.  You could also try to understand it purely as a weird culture, which it very much is.  Central bankers all talk to one another, only really do central banking throughout the course of their careers, have Ph.D.s in economics, and stay close to the discipline (but not too close! you write a couple of good articles, and then stick to policy with modest empirics.).  It's a super insular, almost quintessentially technocratic community.  Or you could simply look at its legal authority and examine its rules and orders.

I take Peter to be suggesting that none of these approaches could, if taken alone, provide you with a full picture of how the Fed works.  One of the themes that runs through the book is that consideration of the law alone would lead observers to think that members of the Board of Governors are insulated and empowered, when in practice, they cycle through the Fed quickly, and presidents get to appoint many of them.  The culture of the Fed, or at least Fed-watching, on the other hand, reifies the Fed chair, and the FOMC, without paying attention to the truly powerful Fed staff, who never leave, even as their leaders revolve away.  Finally, Peter rejects the idea that the Fed is a technocratic exercise in the abstruse, but a place where powerful value judgments are made, and so therefore worth some measure of accountability - Matt talks about that.  The Fed is much more than a vehicle for monetary policy, as we found out during the financial crisis, and encapsulates a disturbingly large number of bureaucratic actors - Peter is particularly critical of the continued existence of the regional federal reserve banks, and with good reason.

I admit that I prefer these sorts of mixed method accounts, on the assumption that more inputs probably creates a more accurate output.  It does complexify things, to be sure.  But the Fed is a complex beast, and pretending it is anything but is disengenously reductionist. 

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March 16, 2016
Book Club For Peter Conti-Brown: The Power and Independence of the Federal Reserve
Posted by David Zaring

We're going to put together a few takes on Peter's excellent book on the Fed.  He's an invaluable colleague of mine and an already prolific scholar on financial regulation.  Stay tuned for some views from us on his book, here's the Wall Street Journal's take, to whet your appetite.

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January 29, 2016
Better Bankers, Better Banks, By Hill and Painter
Posted by David Zaring

Over at Concurring Opinions, I'm participating in the Claire Hill and Richard Painter symposium on Better Bankers, Better Banks.  A taste:

I’d like to put Claire Hill’s and Richard Painter’s fine proposal in the context of how we think about the purpose of financial regulation more generally.  Specifically, how should we think about reforming the financial system to avoid the problem the financial crises? The question is one of the most central to regulation in general, and has been a preoccupation of policymakers ever since the last such crisis. Many look to forestall financial crises with institutional reform.  In the case of banking safety and soundness, that dictates regulation designed to strengthen the balance sheets of banks. Since 2010, American banks have been required to hold more money on hand so that they are ready for shocks, to limit their proprietary trading, to hive off their derivatives arms, and so on. Each of these requirements, of course, have been the subject of regulatory battles and industry pushback.  But all of them are about banks as institutions.

But what if the solution is not to change what banks do, but rather to change what bankers do?

Go give it a look!

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December 03, 2015
How The Other Half Banks: What Will Replace Banks?
Posted by David Zaring

As Mehrsa observes, the largest problem for middle and working-class access to the benefits of banking concerns the perceived cost of catering to such small time financiers. They simply do not borrow or lend enough to make it worthwhile. One question addressed in the second half of her book concerns some alternatives to banks that might be willing to enter a market that the big national banks have largely exited, in her telling.

But of course, fixes that can market efficiently to low dollar depositors might well have some competitive advantages when it comes to high dollar depositors as well. To me, the interesting question is whether the innovation here will be one of financial technology or one that requires a regulatory blessing. Mehrsa considers microfinance, which Christine has discussed (and so I won't), or community minded banking, which looks like a triumph of hope over experience. But she also surveys debit cards, Walmart, mobile banking, and peer-to-peer lending; they all offer the prospect of inexpensive credit, or at least efficient access to the financial system, without necessarily requiring the use of algorithms or robots.

Leaving aside mobile banking and the Wealthfronts and VenMos of the world, it is worth noting that the problems for debit card issuance, by the post office or whoever, banking at Walmart, and P2P are regulatory ones, rather than technological ones.  The question has been whether these institutions are enough like banks to be trusted with deposits.  Much of the answer to that question is tied up in bad old competition avoidance by the already extant banks, who lobby against potential competitors.  But some of it lies in the idea that few can be trusted to hold other people's money.  Bank charters, as Omarova and Hockett can tell you, require the institution to act in the public interest.  Other holders of funds have fiduciary obligations to the owners.  And the regulatory question is whether Walmart or Joey8359 on the internet will feel the same way, or, put another way, whether we should care that they obviously will not.

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October 12, 2015
Hello and Congrats to Angus Deaton
Posted by Matt Bodie

Hello!  Many thanks to Christine for her warm welcome post, and thanks to all the bloggers at the Glom for letting me hop on board.  I had a terrific time blogging at PrawfsBlawg, but it has been a while since I did much blogging on corporate and employment law subjects.  There is a ton going on in business law right now, and I look forward to digging into these issues on a more regular basis. 

And it's an auspicious day for me to begin blogging here, as Angus Deaton has just won the Nobel (Riksbank) Prize for Economics.  Deaton is a professor at my alma mater, as well as the father of my classmate and friend Rebecca Deaton.  It looks like the university had a nice celebration for him this afternoon.

You might expect that the choice of Deaton would be lauded by progressive scholars, as Deaton's recent work focuses on issues of poverty and inequality.  And you'd be right.  But Marginal Revolution's Tabarrok and Cowen also sing Deaton's praises.  They highlight not only his earlier technical work, such as the Almost Ideal Demand System and the Deaton Paradox, but also his emphasis on careful empirical work in understanding and measuring world poverty.  His work shows that investigating the scope and depth of global poverty is not just for wild-eyed leftists.

I've had Deaton's popular book "The Great Escape" in my nightstand pile for a while.  Part of the point of Nobel recognition, I think, is that it will prompt a wider audience to take a look at his work.  I look forward to reading it.

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October 13, 2014
The Marmon Group: A Mini-Berkshire?
Posted by Usha Rodrigues

As I blogged a few days ago, I've been reading Larry Cunningham's Berkshire Beyond Buffett: The Enduring Value of Values.  The thesis is that Berkshire Hathaway's value will endure beyond its founder, Warren Buffett, because of the larger values of the organization.  After making his case he argues (like a good lawyer) that a precedent and analogous case already exists: the Pritzger's Marmon Group.

You know you're a corporate law geek if the mere mention of the Marmon Group made you sit up and take notice.  The Marmon Group plays a role in 2 classic corporate law stories.   Larry mentions one: every student of corporate law should remember the Marmon Group as the bidder in the infamous corporate law case Smith v. Van Gorkom.  If you don't remember the 1985 Delaware Supreme Court case, you didn't have me as a Corporations professor.  Spoiler alert: the directors are found to have breached their fiduciary duty and are thus personally liable for potentially millions of dollars in damages.

What many casebooks omit--but not Klein, Ramseyer, Bainbridge, which I am happily using this term--is that the case settled for $23 million.  $10 million came from D&O insurance, and "almost $11 million came from the Pritzkers." The Pritzkers had no legal duty to pay for the directors' settlement--but they did it because they felt it was the right thing to do.

The Marmon Group's second corporate law claim to fame is as a player in Barbarians at the Gate, thhe father of corporate tick-tocks.  The Marmon Group backed one of the bidders, the First Boston Group.  There's this great scene where in a second round of the auction they need to raise more money.  First Boston makes a 45-minute presentation to a British sugar company, S& W Berisford, on a Saturday night.  First Boston hoped that Berisford could make a decision by Tuesday.  20 minutes later, the company committed $125 million. 

One of First Boston's advisors asks "Do these people have any idea what they're doing?... I mean, they're going to commit $125 million.  Why should they do it."

Handelsman stared at Finn as if it was the silliest question he'd ever heard.  "Jay [Pritzker] asked them to."

The common theme from these two stories? Sophisticated businesspeople regularly act for motivations other than money.  Again and again in Berkshire Beyond Buffett, either Berkshire itself or one of its subsidiaries demonstrates that money is not ultimately what drives them. Most notably, many of Berkshire's current subsidiaries turned down higher offers from other acquirers because they valued the reputation for hands-off management that Berkshire promises.

Here's a concrete example I used with my Corporations class when discussing conflicting interest transactions.  One of Berkshire's subsidiaries was operated by a devout Mormon whose stores were closed on Sundays.  He wanted to expand out of the state, but Buffett was skeptical.  He thought the model could work in highly religious Utah, but not beyond.  Here is Cunningham quoting Buffett:

Bill then insisted on a truly extraordinary proposition: He would personally buy the land and build the store--for about $9 million as it turned out--and would sell it to us at his cost if it proved to be successful.  On the other hand, if sales fell short of his expectations, we could exit the business without paying Bill a cent.

The store was "an instant success", and Berkshire wrote the Bill a $9 million check.  Bill refused to take a penny of interest.  It's a good example of insider transactions that benefit the firm.  It also suggests Larry might actually be right about Bershire's staying power.  I can't help thinking there is a lot of value in offering businessmen like this the combination of liquidity and autonomy Berkshire provides, insulating them from the  demands of Wall Street.

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October 06, 2014
Book Review: Berkshire Beyond Buffett
Posted by David Zaring

Larry Cunningham's Berkshire Beyond Buffett is the kind of book I might expect to see produced by a business school academic; it is unsurprising to see that it has been published by an excellent business school press.  The book is oriented around an extremely interesting question: does Berkshire offers some sort of competitive advantage beyond that provided by its once-in-a-generation-brilliant chairman Warren Buffett? 

Berkshire has invested in a vast array of businesses; in each of those businesses Buffett looks for a "moat."  That is, he looks for a market position that will deter competitors from appearing, prevent customers from disappearing, and retain contracting advantages over suppliers, workers, and other inputs.

But what is Berkshire’s moat?  Is it the fact that it is good at finding moats?  Or is it something else?  Larry answers this question in a way that gets at a division in business schools between management-oriented approaches to scholarship and finance-oriented ones.  Financial analysis would focus on the existence of barriers to entry (moats); it might also focus on the low cost of capital that Berkshire Hathaway enjoys, given, among other things, its stellar track record.  Management departments might look to something else: a strong corporate culture.  In this case, Larry reads more as a management scholar than a finance scholar.  Larry's describes, through case studies on a number of Berkshire’s subsidiaries, an ethos that focuses on:

  • long time horizons
  • an approach to management that is hands off but investor-oriented
  • an eschewal of complicated financial engineering
  • a preference for straightforward products and quiet but respected branding. 

In his view, it is this ethos that makes Berkshire a better manager of firms than most.

Can corporate culture explain business success?  It is difficult to measure, but obviously it must play some role.  If culture was meaningless we could evaluate the quality of a workplace without setting foot inside it, and nobody does that.  In my mind, the more difficult question is this: is Berkshire’s culture replicable?  Although Larry has developed a translatable story about what works for Berkshire, implementing it may require a certain set of special skills that most managers simply do not enjoy or possess – to describe, in this view, would not result in the ability to do.

Along the way I learned some interesting things about Berkshire.  For example, and for what's it worth:

  • The firm is not secretly an insurance company with a hobby in acquiring other firms.  Insurance revenues form a minority of the revenues of the conglomerate.
  • Nor is it a hedge fund, although it does take positions in numerous companies that it does not own.  Those revenues, however, are dwarfed by the revenues provided by the firms it does own.
  • Nor is Berkshire a story about a few winning companies saddled to a bunch of modest losers, or, at least, it does not seem to be.  In its extremely diversified way, the company has enjoyed productivity from almost unit.

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Book Review: Berkshire Beyond Buffet
Posted by Usha Rodrigues

GW Law professor Larry Cunningham has a new book coming out, Berkshire Beyond Buffett: The Enduring Value of Values.  Two caveats before I begin my review.  First, I received a review copy for free.  Second, we own shares of Berkshire Hathaway. Don't get excited, people, I'm not rolling in Class A. My husband likes to dabble in stock picking with a little "fun money, and" right out of college, one of the first stocks he bought was Berkshire Class B.

When talk over the dinnertable turns to investments, we've often speculated as to how much our shares will drop in value with the  death of Warren Buffett--who is now 84.  Cunningham's thesis is that it should not drop much at all, because there is much more to Berkshire Hathaway than the Oracle of Omaha.  So I was definitely interested to start this book.

A word about organization: The challenge of organizing a coherent story around a conglomerate is large, composed of  50 subsidiaries. Larry says that the teacher in him organized the traits at issue as a mnemonic spelling out "Berkshire":

  • Budget-conscious 
  • Earnest
  • Reputation
  • Kinship
  • Self-starters
  • Hands Off
  • Investor Savvy
  • Rudimentary
  • Eternal

This framing seemed a little forced to me at times.  But I understand its motivation: trying to make sense of commonalities among the the many diverse businesses that comprise Berkshire Hathaway. 

My takeaway was this: as I tell my students, successful entrepreneurs face two choices for exit: sale and IPO.  If you sell, you lose your autonomy.  If you go public, Wall Street expects certain returns and will punish you for failing to deliver. 

What if you have a family business and are pretty happy with the way things are, but are worried about looming tax problems when the founder dies?  Berkshire Hathaway offers the right kind of firm a third path, one that allows the founders to cash out and yet keep the business running as a BH subsidiary just as it had been independently.  Nothing is free, of course, and companies regularly accept a BH bid which is less than competing bids, because they know that they will be able to run the company as they choose.  But these select firms use the freedom, shelter from the market, and capital that Berkshire provides to flourish.

I was particularly interested to see the book's account of David L. Sokol's departure from the firm.  Sokol, a senior Berkshire exec, bought $10 million in shares in the Lubrizol Corporation and then recommended the company as an acquisition target to Buffett.  Cunningham, while obviously a Buffett fan, did not sugarcoat his account of Berkshire's initial missteps in handling what burgeoned into a scandal.  Although the SEC failed to prosecute Sokol (which he claimed as vindication), the larger point Cunningham underscores is that Berkshire Hathaway's reputation is its chief asset. 

I'll have more to say about that in another post.  For now, I'll conclude by saying that this was a timely and accessible book, chock-full of insights and enjoyable to read.

 

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August 16, 2014
Ownership and Control in Startups
Posted by Gordon Smith

Since reading Barbarians at the Gate in the early 1990s, I have been a huge fan of business histories. Although I have read scores (perhaps hundreds) of business histories, my list of "must reads" is still long. Recently, I decided to read one of the books on that list, The Soul of a New Machine, Tracy Kidder's account of Data General's efforts to build a minicomputer in the 1970s. This book was published in 1981, and it deals with events during my high school years, so it is a great trip down memory lane.

Here is an observation about the founders of Data General early in the book:

Some notion of how shrewd they could be is perhaps revealed in the fact that they never tried to hoard a majority of the stock, but used it instead as a tool for growth. Many young entrepreneurs, confusing ownership with control, can't bring themselves to do this.

Hmm. The distinction between ownership and control is a familiar one in corporate law circles, but this Berle-Means concept is typically applied to large corporations. What does it mean in the startup context?

Chuck O'Kelley examines the connection between entrepreneurship and the Berle-Means corporation in his 2006 article, The Entrepreneur and the Theory of the Modern Corporation, 31 J. Corp. L. 753, but I am curious about viewing this from the other direction. As noted by O'Kelley, the separation of ownership and control is used by Berle and Means to describe firms after the decline of the classical entrepeneur, so it seems somewhat surprising to see Kidder use those terms to describe a startup.

Founders often exert a tremendous influence on a company, even when shares are held by other employees and investors. This control may emanate from their formal positions within the company (CEO, CTO) or perhaps from the respect they are paid from other employees. But I think it is fair to say that ownership matters a great deal in the startup context because it is more concentrated than in the public company context. Thus, to a large extent, ownership is control in a startup.

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June 12, 2014
Pulsing
Posted by Usha Rodrigues

Near the end of Brigid Schulte's Overwhelmed: Work, Love and Play When No One Has the Time (about which I blogged last month) the author talks about "pulsing." The idea is that humans are designed to work in intense and punctuated bursts.  Schulte contrasts this model with the 10-hour-day, work-harder work-longer grind that the ideal worker of the 21st century is supposed to emulate.

What a relief! 

I've been a closet pulser for years.  I always described it as "getting bored easily," but I can't seem to work at one thing--particularly a writing project--for much more than an hour at a time,.  I'm much better off with a 2-hour window of time to get something done rather than a 5-hour window.  My peers often lament not having long stretches of time to get some "real writing done", and I nod knowingly, because that's what you're supposed to do.  I'm faking, though--in my heart I know I work best in concentrated bursts, and that I inevitably fritter away long blocks of time when I do have them.  I always chalked it up to lack of focus, but I guess I work best in pulses.

Schulte also shares that Anders Ericsson's study of young violinists--the basis for the theory that it takes 10,000 hours of practice to be expert at something--actually had as much to say about quality of practice as quantity. 

Ericsson's study found that not only did the best violinists practice more, they also practiced more deliberates: They practiced first thing in the morning, when they were freshest, they practiced intensely without interruption in typically no more than ninety-minute increments for no more than four hours a day.  And, most important...the top violinists rested more.  They slept longer at night and they napped more in the day. 

The law firm world wasn't as compatible to pulsing as the academic one, but I would slog away at something for hours, then finally leave my desk late at night only to have a breakthrough when on the way home.  American culture increasingly values always being available, always being on--but maybe that's not the way towards better quality output--not to mention life.

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May 30, 2014
Overwhelmed
Posted by Usha Rodrigues

I do most of my pleasure reading as I drift off to sleep, which is a large part of why I go to bed so early.  It so happens that 2 nights ago our younger dog, Sweet Pea awoke me at 12:30 am with some inexplicable yet insurmountable need to huffle at the bedroom door until I let her out in the backyard, where she spent an hour charging around, eating grass, and doing important other things. 

I have 3 children under 7, but sometimes it's the dog that wakes me up at night.

Anyhow, as I lay on the kitchen futon (yes, we have a futon in our kitchen; yes, it's awesome), I decided to start on the next book on my list, courtesy of a book club: Brigid Schulte's Overwhelmed: Work, Love, and Play When No One Has the Time.

Big mistake.

Schulte sucks you into her harried Washingtonian life, where she's late to a meeting where the grey-haired male academic tells her she has at least 30 hours of leisure a week.  Yeah, right.  It's a good read, I'm only partway through--largely because even after Sweet Pea emerged from the night and I was ensconced back in bed, thoughts about the book kept whirling through my head.  For 2 hours. Not a good book to drift off to.

My reactions thus far are two-fold and completely contradictory.  One part is: "sing it, sister."   I too spend large amounts of time harried and trying to catch up with everything work-wise, house-wise, child-wise.  Here is Schulte on page 2 "I am always doing more than one thing at a time and feel I never do any one particularly well.  I am always behind and always late, with one more thing and one more thing and one more thing to do before rushing out the door."  Mmm-hmm.

The second, and contradictory reaction is "there but for the grace of God..."  Unlike Schulte, I do have leisure time, and I know it.  I credit my job, my town and my husband for that. 

This is not to say I'm slacker lawprof kicking back with mai-tais while my students toil.  I work hard at teaching, and I'm pretty sure my students know that.  This summer I am planning on revising an article I sent out in the spring, writing a spin-off essay from that article, and writing a new article.  That's a lot.  Yet I do have leisure time.  I exercise often.  I sit down with the paper over breakfast for 15 minutes every day.  I have lunch with colleagues sometimes, or take 15 minutes out of my day to lunch, again over the paper.  I chose to leave DC and its frantic lifestyle and head to Athens, Georgia, where the pace is slower and nothing is more than 15 minutes drive away.  I've never regretted that choice, and Schulte only made me feel better about it.

Oh, and my husband.  Here's another quote from Schulte:

As I began to think more about leisure time, I realized that I kept putting it off, like I was waiting to reach some tipping point: If I could just finish picking all the weeds, chopping the invasive bamboo, cleaning out the crayons and shark teeth and math papers and toys and bits of shells and rocks and too-small clothes in the kids' closets, buy more cat food, fix the coffeepot, complete this story assignment...

Well, you get the drift.  Again, I found myself nodding.  There's always something more to do, if you're willing to do it.  And I probably would try, except that my husband is good at leisure.  And he reminds me, by word and by action, that there will never be an end to the work of life.  So at around 8, after the kids are in bed, we open up a bottle of wine and have dinner and talk.  Just about every night.

So far I'm 3 chapters into Overwhelmed, and I don't know when I'll finish it, since apparently I can't read it at bedtime.  The last chapter is titled Toward Time Serenity, so Schulte clearly has more in mind than just diagnosing overwhelmedness. If she's figured out an answer, I'll let you know.

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A Recommendation Of Young Money, By Kevin Roose
Posted by David Zaring

Eric's post on Harvard MBAs as bubble predictors references Young Money, by Kevin Roose, and reminded me that I'd never written about it.  The book's a good one, following undergrads who take Wall Street jobs and are essentially made miserable by them.  I'd put it in the One-L category of books, in that it's meant to be a humanized tell all about what will happen to you if you do this thing.  In One-L, the this thing was Harvard Law School.  In Young Money, it's analyst at Goldman Sachs.  

The book's well-reported, though it wasn't completely easy to care about well-paid people disliking their jobs, which members of the legal profession will hardly find boat-rocking.  But certainly there are some home truths there; I do sense that Roose is right when he says, as he told Ezra Klein:

in a lot of schools it's these scared organization kids going to Wall Street. One thing Wall Street does that's really smart is they actually tell you way earlier than other industries if you got a job. They'll let you lock the job down in the fall of your senior year. So you can take that job on Wall Street or you can gamble on getting something after you graduate....[But] you don't have to pay people a ton of money to come to your program after college if what you're giving them still offers prestige and structure and the sense that they're not signing up for something forever. Teach for America has really approximated the banking model without the money. If what you're seeking is short-term rewards there's no way you'd choose teaching in the Mississippi Delta over working at Goldman Sachs but there's something calling people to do work they find meaningful.

It does ring an interesting bell.

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May 14, 2014
Business Persons, By Eric Orts
Posted by David Zaring

My colleague Eric Orts has just come out with Business Persons: A Legal Theory of the Firm, and I must give it my highest recommendation.  Eric's argument is that the independent legal status of the firm is critical to making sense of it - and that its legal personhood does a better job of explaining what firms are doing than do reconceptualizations of them as nexuses of contracts, or as a set of principal-agent relationships.  "Without the social technology and 'forms' provided by law, business firms would be indistinguishable from informally organized social groups, clubs, or gatherings of people pursuing similar interests," he writes.  The books then tours the many ways that law makes firms distinctive.

Well worth adding to your collection - and available here and here.

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May 01, 2014
Received Recently: Negotiating Your Investments, by Steven Blum
Posted by David Zaring

My colleague Steve Blum has a nice book out on the financial services that can be facilitated through negotiation skills.  It is 

  • a primer on negotiation skills (that's part 1 of the book)
  • a creative application of those skills to investment management (that's part 2)
  • a reminder of some of the business school basics of investing (that's part 3)

A nice overview in a couple of different ways, plus some sound advice on dealing with investment professionals (or becoming one, an increasingly popular choice for graduates of some law schools).  Anyway, it's available here and here.  And you can see Steve's blog here, if you want more.

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