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The Surest Sign of Asian Doom

If the declinists are to be believed, it’s a question of “when” not “if” Asia’s growing population, red-hot economies and superior work ethic combine to upend the world system and push a hapless America out of the top spot. Alas, recent developments have exposed some flaws in this theory. Among other things, China’s own housing bubble, India’s financial panic, and the Asian periphery’s headlong rush into America’s comforting security embrace do not inspire confidence in the prospects for a “post American” new Asia.

But this latest news from New York Times makes it official: Asia’s decline has begun. Asia’s biggest companies are sending their brightest executives to American style MBA programs.

Fueled by an appetite for growth, corporations in China, India and other markets in Asia are sending an army of managers and executives to Western business schools to groom future leaders. U.S. and European business schools, meanwhile, are cashing in on the growing roster of clients from cash-rich companies and strengthening ties with the markets and people driving the world economy.

The rise of business schools in America led to greedy CEOs milking their companies for multimillion dollar benefit packages, to weird financial market transactions that took down some of the biggest names in American business, and to one destructive management fad after another that left dozens of American companies as hollowed out shells.  Business school grads also pioneered exotic new tax dodges that helped bulk up the federal deficit, to say nothing of the kind of corporate ruthlessness that hollowed out the US industrial base in record time.

With Asia now looking to follow this path, Americans can relax: Asia won’t be eating our lunch anytime soon.

The next step? We need to sell them on the need to build law schools.  Lots of them.

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  • Jbird

    all part of our evil plan [insert sinister laughter]

  • LarryD

    S’ truth. American business schools have done more to sabotage our economy than anything else I can think of.

  • Toni

    And, of course, the other side of the coin (no pun intended) is the tremendous benefits America has derived from more than a century of professional business management, and the risks farms and businesses can now manage with the help of some of those fancy new Wall Streets innovations.

    Here’s a shock: poor people have benefited, too! People with no credit record, or a poor one, can establish or improve their credit record by using a credit card *responsibly* — by charging no more than they can afford and paying it off each month. And some poor people who bought houses with previously unavailable subprime mortgages are now homeowners.

    By now, poor people and young people have probably learned that they need to understand *all* the terms of their credit cards and their mortgages *before* they take on any either sort of debt. Those who fail to learn from history…

    Everyone in every economic class should have learned by now that good times NEVER last forever. And so carrying a lot of debt, and having zero savings, are very bad ideas. Dangerous ideas.

    After I had to quit work in 2000, and was looking at rolling over my low-six-figures 401k, a big bank here seriously wooed me, to manage some of my savings. I couldn’t understand. I’m not rich. Finally a friend explained that it was because I had assets and little debt except my mortgage.

    When I did roll my savings over, to Vanguard and mostly into index funds, my advisor and I hit it off. He told me about a surgeon client who had so much debt, he’d have to either cut back his expenses or keep working past 65. He told me about clients who wanted him to use derivatives or come up with some other fancy strategies to make super-high returns. They just don’t exist, not over the long haul.

    Short version: Unless you’re Warren Buffett, don’t think you can beat the stock market averages over the long haul, and don’t think you can regularly figure out when stocks are cheap and buy in, and when they’re too high and sell out (known as “timing the market”).

    Whew. Even shorter version: the business and investing worlds are more complicated than they seem. Americans benefit from both.

  • a nissen

    Nice tongue-in-cheek directed appropriately.

  • Kris

    “Asia’s biggest companies are sending their brightest executives to American style MBA programs.”

    Ha ha ha! The fools! They have walked right into our trap! And now for step 2: you know all those people who have left the workforce but are not listed as unemployed? They’re actually enrolled in secret STEM studies!

    First we take New Delhi, then we take Pekin!

    (The above is not meant as an endorsement of the original post.)

  • gs

    1. That news is encouraging, but I won’t rest easy until the Asians start sending their future leaders to our law schools.

    2. Kidding aside, back when China was touted as an inevitable economic hegemon, I maintained I wouldn’t form an opinion until they’d passed through at least one business cycle. I’m sticking with that and extending it to the rest of Asia, especially India.

    3. Evidence of Asian fallibility gives me mixed feelings in view of American deterioration. Not solely for civic reasons, I prefer that America continue to lead human progress–but it’s more important for human progress to continue than for any given nation to lead it.

  • gs

    Oops, I overlooked WRM’s concluding paragraph about law schools.

    But I still maintain that it will take the Asians a long time to replicate the sociopolitical effects of US law schools. Let’s play it safe and train their future leaders over here, paying their way using the Pentagon budget if necessary. In addition, US law schools should establish Asian branches.

  • Ulysses S. Rant

    Well said, Sir!

    That was easily one of the best posts I’ve ever read on this site. Current business school “philosophy” has much to do with why our economy is in such a mess. It turns out that productivity and profitability are not always the same thing.

    Who knew?

  • dearieme

    I once quizzed a Japanese legal scholar. I said that I knew about their 19th century copying of the Royal Navy and the Prussian army, but what about law? The Napoleonic Code, presumably? He replied that they looked at different implementations of that code. They decided that they could stomach a version that made brave claims about liberty so long as it in fact imposed an authoritarian system. So they adopted the Austrian variant.

  • Chase Crucil

    Business school can’t be so bad. After all, Mitt Romney accomplished a lot with his MBA and might very well be our next President.

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