Europe in a Nutshell

The Economist recently ran an insightful special report examining the roots of the present crisis in Europe. I found the following quote particularly illuminating.

"Every country sees 'Europe' as a projection of its own hopes and fears. For Germany it is redemption; for France a means to amplify French power; for Italians it is not Rome; for Belgians it is not Brussels; for the Baltic states it is a long way from Moscow; for Romania and Bulgaria it is order; for Spain it is the solution; and for much of Central Europe it is home."

American Inequality: the Evidence from the Shopping Aisles

There has been a lot of discussion lately about the increasingly unequal distribution of wealth and income in the United States. For example, a recent study by the non-partisan Congressional Budget Office found that between 1979 and 2007, after-tax income grew by 275 percent for the top 1 percent of households, compared to 18 percent for the bottom 20 percent of households.

The very different realities for those at the top and bottom of the income distribution were made startlingly clear in this piece from today's New York Times. The article compares the recent performance and near-term outlook for luxury retailer Saks vs. discount retailer Wal-Mart. The executives of those companies tie their recent and expected future performance in large part to the economic well-being of their core shoppers. These quotes were most telling:

“We hear from some shoppers that they believe it will be more difficult than ever to afford holiday meals for their families...We understand their concern, and we see it every month in our customers’ purchasing behavior.”--  William Simon, President and CEO of Wal-Mart US.

"I feel good about the luxury consumer."-- Stephen Sadove, Chairman and Chief Executive, Saks

In remembrance: Jason R. Campbell

Jason at work in Liberia, where he was helping  to strengthen a fledgling labor union.

My good friend Jason Campbell died in a tragic accident on August 6, 2011, in Abuja, Nigeria. Here is his obituary. Glance over it and you will see that Jason accomplished an extraordinary amount in his all-too-short life. 

I was honored to have the opportunity to speak at a celebration of Jason's life and work yesterday at the AFL-CIO. I have copied my remarks below.

My name is Matthew Reisman. I am honored to have this opportunity to share with you a few reflections about Jason.

I was able to attend Jason’s funeral in August and feel fortunate for that, because it enabled me to meet more of the many people Jason touched throughout his life, and to learn more about his many rich experiences before I knew him. I met Jason in the fall of 2003, when he and I were beginning a master’s program at the Kennedy School. As you probably know, Jason was as personable and engaging as anyone you’ll ever meet, and he made friends as easily at Kennedy as he did everywhere else. I know that I was just one of many people that Jason came to know well there, but I think that Jason and I shared a special bond, and I want to tell you a bit about that because I think it sheds a broader light on the kind of person Jason was.

During my first semester at Kennedy, I enrolled in a course called “The Political Economy of Trade.” Jason was in that class, too, as were several others who are here today. It turned out to be one of my favorites, and set me on a path towards a career in international trade.  While I still didn’t know Jason well by the end of the semester, I had gotten the sense that he enjoyed the course, too. I had noticed that he was fully engaged in the material we were studying. And I was bemused and impressed when Jason wore a union pin to our final exam and made sure our free-trading professor saw it as Jason turned in his test. 

As it turned out, Jason and I were among a small group in our class that selected International Trade and Finance as our core area of study. It was in the semesters that followed that I got to know Jason well. I’m pretty sure that I took more classes with Jason at Kennedy than with anyone else. Many of my memories of Jason involve late nights studying, including for a class on trade law that was among the most challenging I’ve ever taken (and that Jason excelled in). It was one of those late nights that I remember Jason introducing me to his enduring love for Paul Wellstone while driving me home. Another fond memory is going with Jason to chat with the former governor of his home state, Jesse Ventura, who was a fellow at Harvard during our second year there. I was very nervous at first, but I was struck by how at ease Jason was, and how effortlessly he established a rapport with that most imposing former executive as they discussed their shared connections to Brooklyn Park.

But my fondest memories of Jason took place far from the classroom. In between our first and second years at Kennedy, we spent a summer working a couple of blocks apart—Jason here at the AFL-CIO, and me down the street at the Office of the U.S. Trade Representative. We resolved to meet weekly for lunch and pretty much stuck to it. Neither of us was making any money, so these meetings often consisted of sacked lunches on a park bench in Farragut Square. 

I loved those lunches. We talked about many things, but most of our discussions focused on the work we were doing, things we were seeing on the job, and issues we were reflecting on and trying to understand. Jason and I were tackling very similar issues but from very different perspectives – he among champions of organized labor, and me with folks who had a somewhat different point of view.

The conversation that Jason and I started that summer never really ended—we kept it going as long as we knew each other. Those of you who knew Jason know that he was a most exceptional conversation partner. He was an extraordinary listener—always willing to hear out any viewpoint, no matter how different than his—but also not shy to challenge the other party. And that’s what I loved about him. Jason challenged me to defend my arguments well, to question and test my own assumptions, to really listen, and to see things from perspectives that I was not accustomed to taking. He and I did not see eye to eye on every issue, but that’s what made talking with him so much fun. 

There was no one that I enjoyed talking shop with more than Jason. After we graduated, I rather relentlessly tried to recruit him to work with me wherever I was employed. I forwarded Jason one job opening after another, including, I must admit, more than one after he’d already begun his work in Nigeria. I know that I tempted him on more than one occasion, but he always told me that the time wasn’t right. He loved and believed in what he was doing, and deep down, I knew and respected that. 

In my own mind, I tried to ascribe noble motivations to my efforts: “If I could just bringJason here,” I’d tell myself, “he’d really shake up the way these people think about things.” But as I look back now, I know that my motivations were in fact quite selfish. I wanted Jason sitting in the desk next to mine because I loved being with him. I wanted our conversation to go on, forever.

I am so grateful to have known Jason—and for all that he taught me, including, as clichéd as it probably sounds, about myself. I will always miss him. And whatever desk I’m sitting at, I will always save him a seat close by, so that we can keep the conversation going. 

India exports high-tech manufactures, too

This blog has focused a lot on India's exports of IT services. But India's high-tech goods exporters are rapidly emerging, too, as this story from the New York Times reports.

There's another lesson that's implicit (to me, anyway) in this story. The founders of the company profiled in the story earned their doctorates in the United States before returning to India. These are exactly the sort of people we should be trying our best to keep in the United States rather than run out with self-defeating immigration policies. They are innovators and job creators.

Is the U.S. patent system broken?

I have read critiques of the present state of the U.S. patent system, but none so powerfully delivered as this story that ran on National Public Radio yesterday evening. It suggests that the patent system has gotten so deluged with lawsuits and frivolous "inventions" that it is undermining the prospects for true innovation, and generating enormous economic waste from litigation and defensive patent acquisitions by technology and software companies.

The arguments for protection of intellectual property are compelling, but surely we can do better than this.

Open Letter to Senator Mikulski

Below is the text of a letter I wrote to one of my senators, Ms. Barbara Mikulski, this evening:

Dear Senator Mikulski,

My name is Matthew Reisman, and I am a resident of Cheverly, Maryland. Tonight, President Obama asked Americans to write to their congressional representatives to let them know that we support "a balanced approach to reducing the deficit." I support such an approach, even if it means making some painful cuts to important entitlement programs--and eliminating tax breaks that I personally benefit from. Please do your part to come to a solution to our nation's debt and recurring budget deficits. And first and foremost, please do your part to resolve the debt ceiling crisis immediately.

The prospects for our prosperity in the near and more distant future depend on all parties abandoning sacred cows and compromising. I believe the President has done his part (and the Republicans in Congress have not), but it also time for the Democrats in Congress to do their part, too. That includes seriously considering reforms to entitlement programs that, while important, will prove unsustainable unless they are reformed.

I appreciate your consideration of my views.

Sincerely,
Matthew Reisman

An opening for Indian retail?

The Wall Street Journal reported on Saturday that the Indian government may be taking steps toward opening up multibrand retailing to foreign direct investment. It will be very interesting to see how this story unfolds in the coming days and weeks.

One potentially troubling aspect of the government's plans is a reported requirement that investments equal or exceed $100 million, with at least half of that value being devoted to developing "back-end infrastructure." Such a condition could impose an unnecessary and artificial burden on potential investing firms. Infrastructure is certain to be an important part of their investments in any event, but it may not make sense for infrastructure to account for 50 percent or more of their investments in every circumstance. Imposing such a requirement could lead to suboptimal outcomes for individual investors and the sector as a whole.