The three targets mentioned in the title have great deal in common. One of the common attributes is that all three are targets of our new administration. This blog will address growth and DEI; next week’s blog will address the future and the roles that these elements play in academic environments.
Growth
As the caption in the photo above suggests, sunflowers must either grow or die. We are better and therefore have more options!
John Cochrane’s thesis from the 2016 election, that growth is the solution for all our ills, has some issues:
Just in the past few months, we’ve looked at problems like retirement, energy prices, political chaos, zero interest rates, negative interest rates, China’s economy, terrorism, unemployment, inflation, pensions, healthcare, refugees, and the Federal Reserve.
Whew—so many problems. There’s, however, a single solution to all of them, and it’s called growth.
John Cochrane, a senior fellow at the Hoover Institution, wrote a paper on economic growth last year [2015] as part of a project to design presidential debate questions. Sadly, the candidates chose to talk about other issues such as finger length and personal energy levels, but Cochrane’s paper is still useful.
John Cochrane is not alone. Jamie Dimon, the CEO of Chase Manhattan, in an interview with CNBC, could be heard repeating “growth is the only solution” for every question thrown at him. For a world with a constantly growing population and matching growth in resources (including land), they might be right. For our planet, they are not. We have finite resources (including land). We must be smarter than the sunflowers at the top of this blog. Let’s focus on Jamie Dimon’s territory, Chase Manhattan, a branch of the largest bank in the US. I am a Chase client. In addition to having a simple checking account and a savings account, they are also investing some of my money in markets for growth. When they invest my money, they create a risk profile for me to figure out the risk/reward that I will be comfortable with. If growth is the only criterion for success, however, I am not aware of a similar document that is instituted on a company level.
Below is an AI (through Google) description of Chase’s compensation profile and that of Jamie Dimon:
JPMorgan Chase’s compensation policy for executives includes a base salary, incentives, and long-term incentive awards. The Compensation & Management Development Committee evaluates executives and determines their compensation. The Board of Directors then ratifies the compensation.
Compensation components
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- Base salary: The annual salary paid to an executive
- Incentives: Performance-based compensation, such as bonuses and stock options
- Long-term incentive awards: Stock options, grants, and other awards that are intended to align the interests of executives with shareholders
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Compensation process
- The Compensation & Management Development Committee approves compensation goals and objectives
- The committee evaluates executives based on those goals and objectives
- The committee determines compensation for executives
- The Board of Directors ratifies the compensation
Compensation examples
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- In 2024, JPMorgan Chase CEO Jamie Dimon’s compensation was $39 million, which included a $1.5 million base salary and $37.5 million in incentives.
- Other senior executives at JPMorgan Chase saw their compensation increase by 4–21% in 2024.
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It is basically assumed that the part of the compensation aligned with shareholders is the growth of the stock.
Chase is in the category of a “too big to fail” bank. Here is how AI defines that:
The “too big to fail” (TBTF) policy is a theory that some financial institutions are so large and interconnected that their failure would be disastrous for the economy. The policy suggests that the government should support these institutions if they face potential failure.
The government regulates the finances of such banks to try to prevent such catastrophic failures. Our government is now declaring that our society is over-regulated. It remains to be seen what will happen to TBTF institutions.
Economic growth is today’s yardstick for the success or failure of governments. In democratic countries, voters are translating their countries’ economic growth into their personal well-being. It will be interesting to see how this translation works as the global population shrinks. The population pyramids are shifting to show a larger percentage of older people, who need an increasing amount of support. Most of the developed world is now in this situation. Changing the criteria for economic success to growth per capita (GDP/capita) rather than overall GDP will not completely solve the problem of measuring accurately but it will be a step in the right direction.
DEI (Diversity, Equity, and Inclusion)
DEI is now directly under attack by the new US government. The stated reasoning for the attack, which resonates with many, is that policies should not be racialized. The thought is that economic gains, in terms of employment and salaries, are zero-sum activities (normalized to growth) and advantages to some translate into disadvantages to others. The argument is that such distributions of advantage should not be based on race. However, DEI is not limited to the economic sphere; a significant element has to do with education. Five days after President Trump’s inauguration, the following story was published:
Trump’s anti-DEI order yanks Air Force video on first Black pilots
WASHINGTON, Jan 25 (Reuters) – U.S. President Donald Trump’s order halting diversity, equity and inclusion initiatives has led the Air Force to suspend course instruction on a documentary about the first Black airmen in the U.S. military, known as the Tuskegee Airmen, a U.S. official said on Saturday.
The famed Black aviators included 450 pilots who fought overseas in segregated units during World War Two. Their success in combat helped pave the way for President Harry Truman’s decision to desegregate the armed forces in 1948.
About a day later, the following piece was published in the NYT by David French:
How a German Thinker Explains MAGA Morality
There’s a difference, however, between yielding to temptation and developing an alternative morality. And what we’ve been witnessing in the last decade is millions of Americans constructing a different moral superstructure. And while it is certainly notable and powerful in Trumpism, it is not exclusive to Trumpism.
A good way to understand this terrible political morality is to read Carl Schmitt, a German political theorist who joined the Nazi Party after Hitler became chancellor. I want to be careful here — I am not arguing that millions of Americans are suddenly Schmittians, acolytes of one of the fascist regime’s favorite political theorists. The vast majority of Americans have no idea who he is. Nor would they accept all of his ideas.
Not many Americans know who Carl Schmitt was, but many Americans have heard about the reception that Jesse Owens got in the 1936 Berlin Olympics. Three years after 1936, the Germans invaded Poland, the Holocaust started, most of my family was murdered, and I was moved to Bergen-Belsen with some of my remaining family. The total global number of casualties exceeded 50 million.
A day after David French published his piece on Carl Schmitt, another piece was published in the NYT on the activities of Elon Musk in Germany:
Musk Says Germany Has ‘Too Much of a Focus on Past Guilt’
Elon Musk told a gathering of the hard-right Alternative for Germany party this weekend that the country has “too much of a focus on past guilt,” an apparent effort to wipe away the long shadow of the Nazis that has influenced generations of Germans to quarantine extreme political parties from public life.
“It’s good to be proud of German culture, German values, and not to lose that in some sort of multiculturalism that dilutes everything” Mr. Musk said in a short video that was broadcast to thousands of party members in the eastern city of Halle.
Halle is about 110 miles (179km) from Bergen-Belsen. In two months, I will be traveling to this “neighborhood” to celebrate the liberation of the camp by the British army and my liberation by the American army.
A few days later, another piece published by the NYT announced more recent anti-DEI activity:
On Wednesday evening, Mr. Trump signed two executive orders. One was a 2,400-word behemoth focused mainly on race, gender and American history. It seeks to prevent schools from recognizing transgender identities or teaching about concepts such as structural racism, “white privilege” and “unconscious bias,” by threatening their federal funding.
The order also promotes “patriotic” education that depicts the American founding as “unifying, inspiring and ennobling” while explaining how the United States “has admirably grown closer to its noble principles throughout its history.”
Below are the states in the US that require Holocaust Studies (again, AI):
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Illinois, Kentucky, Maine, Michigan, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, and Wisconsin.
I talked about my family experiences in the Holocaust in four of these states (and more that are not listed). For me, a policy that allows talks about the Holocaust but not talks about “structural racism,” “white [or Aryan] privilege,” or “unconscious bias” is more than problematic.
In the next blog, I will try to tie the concepts of growth, DEI, and the future to the function of higher ed and preparing students for future functionalities. We will see that university campuses are a much more functional environment to integrate these themes than Chase bank, which I have explored here. The proper way to explore businesses in this context is to include ESG (Environmental Social and Governance) in the discussion.
Stay tuned!