Wednesday Night #1566

See also wednesday-night.com

“Moses arduously led the Jews for 40 years through the desert — just to bring them to the only country in the Middle East that had no oil. But Moses may have gotten it right, after all. Today, Israel has one of the most innovative economies, and its population enjoys a standard of living most of the oil-rich countries in the region are not able to offer.” – Andreas Schleicher, Deputy Director and Special Advisor on Education Policy to the OECD’s Secretary-General

Knowledge and skills are infinite – oil is not

Reuven Brenner proved to be an engaging and voluble guest who shared his thoughts and opinions on a wide range of subjects, too many to be described in detail. We are therefore limiting this account to his topic of Education.
Education is, I believe, the next bubble. First came the loans to ‘junk consumers’ (subprime mortgages) then to junk governments (sovereign debt); and now to schools and universities, both in North American and Europe.
Before making his points and in order to explain how and why he had arrived at his conclusions regarding the principal defects of higher – notably Business Administration – education, Reuven Brenner treated Wednesday Night to a vivid account of his (colourful) background and exposure to an array of cultures, political régimes and above all, thought.
Throughout his presentation, we were struck by the frequency with which he mentioned ‘discipline’ as the critical factor in success, both academic and professional.
Prior to the establishment of Business Administration as a legitimate profession, it was believed that success in business was measured by the quality of product or service provided, the year-end profit being the yardstick or measurement of that quality. Today, there seems to be a common belief that a costly diploma is a form of job credential that will constitute a ticket to higher remuneration as well as a higher rung on the social ladder,- and that the bottom line is the target rather than the scorecard. This change in focus over time has resulted in a great deal of money being invested in higher education in Business Administration (MBA), frequently for the wrong reasons, often accompanied by an inappropriate faculty and student population. The irony of the situation is the number of management professors who have never managed and have little, if any, practical experience outside the politics of academia. Additionally, some are very poor teachers.
Before the USSR launched Sputnik in 1958, university education was attainable by a select few – those who came from a relatively privileged background, or those who showed brilliance and/or promise. Then came the revolution. In an effort to catch up with the Soviets, the U.S. introduced the National Education Defense Act, and by the early 1970s, the number of university students had tripled to some 9 million. Inevitably, there had to be a concomitant increase in faculty and thus the bar was lowered for both student admissions and faculty qualifications.
In general, it is the quality of the students that dictates success. In courses that require mastery of technical/trade skills, math, engineering, accounting, chemistry, biology etc., the students self select, and the professors know their technical material. The issue of whether or not they are good teachers is marginal.
On the other hand, when the course relates to “softer’ subject matter, the results depend very much of the selection of students: If you have brilliant students, who raise good questions, resulting in good debates (among themselves) – the professors can be incompetent, with little knowledge of anything except some academic jargon – the kids will still be brilliant and once again the teaching is pretty marginal. The problem arises when universities abandon stringent selection of students and admit the mediocre and less. In this situation, no matter how brilliant the professor, the students remain mediocre and below. So, once again, the ability of the professor may be deemed to be marginal.
This summarizes part of what Reuven Brenner believes is completely wrong, not only with today’s universities, but with the entire education system. “Keeping kids on ‘real estate’ associated with educational labels, does not mean they will acquire any ‘education’ … only accreditation.”
One of the critical requisites for a successful Business Administration faculty should be the encouragement of informed discussion in class in addition to such strictly academic subjects as mathematics. Logic is an important attribute of success in a competitive environment. Debates between Practitioners and Professors would be an important step towards the creation of such an environment. Practitioners should be a vital part of the process of Business education. Unlike Accounting, which has changed little since it was created by the Ancient Egyptians, or Law, in which changes take place slowly over time, to be successful, Business Practitioners must react promptly to rapid change and therefore should be a vital part of the teaching process.
It was pointed out that Concordia’s John Molson School of Business successfully relies on a very high percentage of practitioners to teach courses. They transmit their hands-on experience along with passion for their professions.
Certainly some graduates of some Business Schools are more successful than graduates of others, but the success rates of graduates could be improved if students were more carefully screened and if alternatives, in the form of prestigious Trades Schools were established. However, that would require a shift in most Western cultures to a concurrent respect for the practitioners of trades.

The example of Israel offers much to learn from and emulate. There, only the best and brightest at the eighth grade level are selected to continue in the stream that leads to the prestigious Technion, Israel’s oldest university, which offers degrees in science and engineering, and related fields such as architecture, medicine, industrial management and education. The others are directed towards the Trades Schools, however, should a student prove to be a late-bloomer with the intellect to qualify for the Tecnion, he or she may qualify at a later date by taking a few extra courses.
The experience of serving for three years in the military may be considered a key factor in Israel’s highly impressive track record in innovation. During military service, in addition to learning the importance of being a team player, young men and women have the opportunity to identify one another’s capabilities and character and thus the core team for a start-up with the right mix of talent, management and organization. In North America, sport plays a somewhat equivalent role.

Today, much of the student population believes that higher education is a right [one need only note the current strike of the Quebec university and CEGEP students to ascertain the truth of this statement], no matter how well or ill-prepared (or suited) the individual is for the course material.
Is there a solution to the Education bubble? Of course there is, but it would require discipline- that word again!- and a major shift in our perceptions and behaviour.

Ron Meisels’ view of the market
Before leaving for a 3-week trip to Asia (Vietnam, Cambodia, Laos and Thailand), Ron gave a brief opinion on the market which has just come off a 21-day cycle, reminding us that technical analysis is the study of cycles, sentiment and charts. He predicts that the remainder of March will be fairly weak, with the exception of high-tech stocks which in accordance with the 12-year cycle are looking very promising.

The Greek bailout
Kenneth Matziorinis believes that despite the fact that the underlying problems have not been solved, the latest bailout which involves Greece swapping most of its privately-held bonds with new ones worth less than half their original value, could go well or badly, depending on the reaction of the hedge funds. More will be known after the meeting of the ministers of finance of the 17 strong-currency nations at the end of the week.

New School of Athens
Kimon gave a quick update on prospects for the New School of Athens conference on “Reinventing the West” scheduled for early 2013 in Paris. He also reports that a number of requests to organize similar conferences have been received from Eastern European countries including Azerbaijan, Georgia and Ukraine. More to come!

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The Prologue

We are delighted and honored that Professor Reuven Brenner, Repap Chair at McGill’s Desautels Faculty of Management will be with us next Wednesday. While many of you are familiar with his teaching (Microeconomics and Applied Microeconomics, Monetary Theory, Industrial Organization and Political Economy, Managerial Economics, to name a few courses), and writing on economic matters (Forbes, The Wall Street Journal, Asia Times as well as the financial press around the world), he is also passionate about – and highly critical of – higher education and North American Universities, and believes that this could be the next bubble. “You can put a donkey before 80% of universities’ and colleges’ gates, and they’ll end up with a diploma.” For your entertainment – and homework – please read his paper MAKING SENSE OUT OF NONSENSE: OR WHAT IS BAD SOCIAL SCIENCE AND WHAT TO DO ABOUT IT. . It was first published some 20 years ago in the Queen’s Quarterly under the title “Extracting Sunbeams out of Cucumbers” a reference to Gulliver’s visit to Laputa, where, while the country is in ruins, the academics work on how to extract sunbeams out of cucumbers, and he comments “Not much new under this Sun”. We would love to give you some excerpts, but there are too many delicious quotes to choose from.
Cleo Paskal suggests Stanislav Andreski’s Social Sciences as Sorcery for additional reading.
This should be a wonderful, enlightening and challenging evening!

There will, of course, be other items on the agenda, not least the results of Super Tuesday. Joyce Napier of CBC and Radio Canada gave an interesting interview on CBC’s Radio Noon on Thursday during which she gave some good background on Rick Santorum and also discussed the possibility of a brokered Republican Convention – intriguing thought.
NB For the many who wonder what exactly a brokered convention entails: A brokered convention would see a new candidate — someone other than Newt Gingrich, Ron Paul, Mitt Romney or Rick Santorum — enter the remaining primaries or parachute in during the convention (if no existing candidate has secured a majority of delegates). In backroom deals, either based partly on the strength of his late primary performances or only on the discretion of party leaders, he would become the nominee.
A contested convention, on the other hand, would see no dark horse enter but none of the existing candidates arrive in Tampa with a 1,144 majority of delegates. Lots of wheeling and dealing would ensue, and after several ballots a nominee would emerge from the four current candidates. Karl Rove on Fox News
[Update: Super Tuesday: Mitt Romney narrowly defeated Rick Santorum in the all-important primary in Ohio, as well as five other states. Santorum scored wins in Oklahoma, Tennessee, and North Dakota. New Gingrich won his home state of Georgia. The results give Romney a strong lead in delegates, but doubts remain about his ability to attract working class and rural voters, particularly in the GOP’s southern strongholds.]

The highly predictable outcome of Sunday’s presidential election in Russia leaves no room for conjecture, however the Washington Post has a view worth considering:
Putin’s hollow victory-to-be
… Officials, members of the establishment and other loyalists have resorted to blatant manipulations and abuse of government authority to ensure this imperative. … Since the government shows no interest in changing its practices, the rift between government and Russia’s modernized constituencies is becoming irreparable. Putin will win Sunday’s presidential election, but this growing alienation will steadily erode his power.
But before the vote – and just in case anything should not go according to plan, RCI reports that Russia accuses U.S. of electoral interference, of of trying to influence its election process by funding opposition groups.

While Canada’s media and all political junkies – as well as a good number of concerned citizens – are focused on the spiralling stories of Robocalls and other murky doings in the last election campaign, one of the more bizarre stories of the week that may have escaped your attention is this one from Paul Wells The enemy of my enemy is a listed terrorist organization, about the campaign led by David Matas and Aurel Braun to persuade the government to consider the Mujahedeen-e-Khalq (MEK) as a potential replacement government for Iran. Further, the piece includes an item from NBC that the sudden spike in mortality rates among commuting Iranian nuclear scientists could be attributable to an expat Iranian dissident group trained and supplied by Mossad? It will make a terrific movie. But first the book from Robert Landori.

Last but not least, for your entertainment: RMR: PMO Pest Control