View the original article in The News and Observer by clicking here.
Most of the people I encounter in the business community will tell you that they are not fans of Donald Trump as a person, but they agree with most of his policies including lower taxes, less regulation, beefed up national security, and greater individual liberty. And they are impressed with his progress on all these fronts.
But to win the next election will require something more than the standard Republican playbook to capture independent voters.
While there are a few Democrats who will not be running for president in 2020, just about everyone on the left who is has started floating policy ideas they hope will differentiate them from the pack. This is a good thing. Republicans should listen with an open mind and come up with some fresh ideas of their own.
Despite her progressive hubris, Elizabeth Warren may be the smartest of the liberal candidates.One of her foundational economic ideas is to radically alter American corporate governance by placing workers on the boards of public companies. Since I headed corporate governance policy under Bush 41, and teach the subject at UNC’s Kenan-Flagler Business School , I feel a duty to weigh in.
Though Warren’s proposal is antithetical to America’s business culture, which considers the owners of companies the ones to whom the corporation should be accountable, I agree with her premise that corporate stakeholders are too often ignored by profit-obsessed CEOs.
The financial goal of a company is not to maximize near-term profits, as commonly believed; it is to maximize long-term shareholder value. Those are often very different objectives. Try to explain Tesla’s stock price with quarterly earnings. To maximize sustainable shareholder value, a company must pay attention to and seek buy-in from all its stakeholders, including workers, customers, suppliers, and the community; as well as respect the environment. The current generation of CEOs was not taught this in business school, and too few of them practice it. If a decision does not show a positive cash flow on a spreadsheet, it is rarely implemented. But many sound business decisions cannot be easily quantified.
My favorite business role model is a company whose motto is: “People over Profits.” This company pays its employees above the industry average and invests far more in worker training than its peers. It provides customer service radically superior to any of its competitors. It encourages store managers to become involved in their local community. It has even innovated a process to recycle Styrofoam cups. In an industry with grueling work schedules, this fast food company is closed on Sundays to allow its employees a day of rest, and time to attend church and/or be with their family.
No traditional MBA course would teach such a business model, in which a company embraces all its stakeholders at the apparent expense of the bottom line. So how does this company’s financial performance compare to its profit-obsessed competitors?
Chick-fil-A generates an astonishing 50 percent more revenues per store than any other fast food company, including McDonald’s, Wendy’s, and Hardees. And that is in six, not seven, days a week.The shareholders are very handsomely rewarded by the company serving its other stakeholders. It is a virtuous cycle.
Capitalism is increasingly vilified by liberal candidates. Only congress is less respected by the general public than big business. With the likes of Wells Fargo, Facebook, and big pharma fleecing stakeholders for short-term economic gain, many corporations deserve their sullied reputations. If they fail to practice a more enlightened form of capitalism, they may face a new sheriff in town in 2020.
View the original article in The News and Observer by clicking here.
Six proposed constitutional amendments are on the ballot. Two are controversial within the Republican Party, which authored them. One shifts the power to nominate members of the state Board of Elections and Ethics to the legislature (the governor would choose from a list provided by the legislature); the other gives the legislature a role in filling judicial vacancies.
If I had not chaired a commission that was at the vortex of former Gov. Pat McCrory’s blitzkrieg to preserve executive powers, I would vote differently on the Board of Elections amendment. Having served in the executive branch in Washington for President George H.W. Bush, my inclination would be to leave things the way they are. But my experience in North Carolina is testimony as to why a single person, with tentacles in political matters that can impact them personally, should not control independent boards and commissions.
In 2014, Gov. McCrory appointed me chairman of the N.C. Coal Ash Management Commission, not an enviable position. It is a role I did not seek and accepted entirely as public service.
The legislature created the Coal Ash Commission to save the governor from himself. McCrory had spent essentially his entire career working for Duke Energy; he was clearly not the person to oversee what was projected to be up to a $10 billion initiative that had the potential to significantly impact Duke’s financial stability and stock price.
So lawmakers created an independent commission of nine people to oversee the cleanup process. The House and Senate were each allotted three seats, as was the governor, who had the authority to select the commission chair.
The night before the commission’s first meeting, in a strategically timed legal maneuver, McCrory filed a lawsuit against the commission and the six commissioners he did not appoint, seeking to abolish the Coal Ash Commission and two other commissions.
During the time the Coal Ash Commission existed, I never once got the sense the governor’s motivation was good governance. His handlers seemed to be driven by a desire to manage a politically explosive issue, given the reelection campaign on the horizon. The Dan River spill had been a featured story on 60 Minutes, and coal ash was McCrory’s greatest vulnerability (until his ill-fated embrace of HB2.)
It was clear the governor’s office wanted to control — not support — the “independent” commission from the start. They offered up someone from the Department of Public Safety, who didn’t know the first thing about the subject matter, to be my chief of staff. Instead, I selected a very highly regarded member of the state Department of Environment and Natural Resources staff who was a former student of mine; I knew she would do a superb job of managing the Commission staff and interfacing with Duke and DENR.
Then I chose as my general counsel a talented lawyer who had previously worked in the environmental section of the Attorney General’s office. She was extremely well respected and trusted by environmental groups, who were a key stakeholder.
I asked each of the six commissioners appointed by the legislature which lawmaker had sponsored them and what expectations, if any, had been communicated. To a person, every commissioner said they were not selected with any conditions whatsoever.
The commissioners and staff were both independent and competent. Over the 18 months the commission existed, we received full support and cooperation from Duke Energy, most environmental groups, and the legislature, but not from the governor’s office. Commissions and boards that are supposed to be independent should not be under the thumb of a single individual.
View the original article in The News and Observer by clicking here.
I recently spoke to the UNC College Republicans. Both of them.
Seriously, there is a robust group of students in Chapel Hill who are willing to be identified as non-progressives on what has become an overwhelmingly progressive campus. Though a majority of today’s college students believe (and are often being taught) that socialism is a superior economic model to capitalism, chances are that half of UNC students come from homes where at least one of their parents votes Republican.
I asked the young Republicans if they ever felt that answering a test question or paper assignment honestly–rather than appealing to the political bias of their professor–would cause them to receive a lower grade. All but two out of about 40 students in attendance raised their hands.
I knew the answer. My son was chairman of the UNC College Republicans 4 years ago, and the Phillips Exeter Republicans before that. I have had dozens of students, interns, teaching assistants, another son, and children of many friends tell me the same.
Last semester I created a new course, “Business, Politics and Public Policy,” for UNC’s GLOBE program, which is an elite group of 53 students with approximately equal numbers from Copenhagen Business School, Chinese University of Hong Kong, and UNC. On the first day of class, I had them fill out an anonymous survey on a variety of topics.
Among the questions was the same one I posed to the UNC College Republicans. Naturally, the group with the largest percentage answering in the affirmative that professor political bias influenced their answers to tests and papers was the cadre from UNC, more than the other two groups combined.
I was recently chatting with a state senator and graduate of UNC, who relayed a story to me involving a close family friend. The girl was a freshman at Carolina this fall. She made a statement in an English class that reflected a conservative viewpoint, and the other students pounced on her in an attempt to shame her for not walking the progressive line. The teacher allowed the verbal abuse to go on unchecked for some time, to the point that the young woman called her parents in tears that night and pleaded to transfer to a school with a less hostile political culture.
One of my top MBA students, who I would categorize as moderate, recently told me that she will no longer participate in class discussions that involve social or political issues for fear of being branded by the “progressive police.”
This is a disgrace; and antithetical to a classic “liberal” education whereby students are supposed to be taught critical thinking. Is there any wonder why so many North Carolina citizens, our legislature, and the Board of Governors are fed up with the political indoctrination occurring at taxpayer-funded educational institutions?
Given today’s toxic political discourse, professors who teach classes that address social, religious or political topics should be required to honor a pledge to respect the viewpoint of all students, and to create an atmosphere where thought diversity is encouraged, not shamed or punished. Students should be informed of this ground rule, and there should be an accountability mechanism to report violations.
Sadly, even well-intended university leaders are “captured” by the political monoculture on college campuses. Administrators turn a blind eye to political discrimination, a cancer that is destroying higher education. Any attempt to promote thought diversity among the faculty, unlike the countless other diversity initiatives, is condemned as a violation of academic governance norms.Chancellors who lack the backbone to demand respect for viewpoint diversity among the faculty and students should be replaced.
View the original article in The News and Observer by clicking here.
Racism is often easy to spot. When a cab driver fails to stop for a black person; when Jews were recently spit upon while walking in a Muslim neighborhood in France; when Muslims are assumed to be terrorists.
But most racism is more subtle. And often those who shout the loudest about racial bias are guilty of discrimination themselves.
As I have documented in the past, the only two significant counties in North Carolina that lost black population the last decade are homes to Chapel Hill and Asheville, the two most progressive communities in the state.
Are policies that restrict construction of new homes in low-cost rural areas—forcing the gentrification of in-town black neighborhoods—racist? Is the fact that the Asheville and Chapel Hill school districts consistently have the highest disparity between the test scores of blacks and whites a sign of racism?
Is spending a fortune on educating children in Mandarin, a curriculum seldom chosen by black and Hispanic children, rather than addressing the racial academic performance gap, a subtle form of racism? Does banning from your city limits the most popular retailer for low-income residents to buy their groceries send a message that certain people are not welcome?
Harvard political scientist Ryan Enos looked at how whites in Sen. Elizabeth Warren’s backyard behave when minorities appear in their homogeneous communities. As reported in The New York Times, Enos published a book titled “The Space Between Us,” suggesting that “the ideological commitment of liberals in these and other similar communities may waver, or fail entirely, when their white homogeneity is threatened….Enos demonstrates that the liberal resolve of affluent Democrats can disintegrate when racially or ethnically charged issues like neighborhood integration are at stake.”
The experiment Enos ran consisted of injecting Spanish-speaking people into commuter train stations located in upscale Anglo suburban communities outside of Boston. The local population had an average income of about $150,000; 88 percent had college degrees. These communities rejected “racist” Donald Trump by margins ranging from 25-50 percent.
In his 2014 paper published by the National Academy of Sciences, Enos describes his study in detail. His basic conclusion was: “The good liberal people catching trains in the Boston suburbs became exclusionary…..Exposure to two young Spanish speakers for just a few minutes, or less, for just three days had driven them toward anti-immigration policies associated with their political opponents.”
Recently, after the Seattle city council had unanimously voted to impose a special tax on large local companies to fund more affordable housing, the social justice-minded Seattle business community revolted. Members of the community were getting into shoving matches in the grocery store over the divisive policy. Immediately, the city council reversed direction and repealed the tax with only two dissenters sticking to their guns.
It is easy to denounce discrimination, and to promote social justice, when it does not impact your life personally. I will never forget being told by a member of the Chapel Hill Town Council that he had just come from eating lunch at a pizza restaurant in the rural part of the county, and that he “didn’t know there were people like that in our community.”
Discrimination is not just racial in origin. New York Times columnist Nicolas Kristof quoted an African-American university professor who said that in society he felt discriminated against because of his skin color, but on the college campus he was discriminated against because he was a Christian.
Before we accuse others of discrimination, perhaps we all need a long look in the mirror.
View the original article in The News and Observer by clicking here.
Life in the George H. W. Bush Administration was very different from today’s Washington. I was fortunate to have been chosen by the elder Bush to serve at the U.S. Treasury Department tackling the subject I was most passionate about: American competitiveness.
President Bush surrounded himself with people he trusted, but he did not choose sycophants. He encouraged us to work with the “other side of the aisle” to develop policy that served America, with no pride of authorship. He never pointed at himself after a goal had been scored.
Ethics were not relative, they were absolute. Before I could occupy my office at 1500 Pennsylvania Avenue, the Secret Service and IRS scrutinized everything about my past. They even went through three years of checkbooks asking where every deposit came from.
Because I was director of corporate finance policy, I was called on by many financial industry lobbyists, including Trump’s current chief economic advisor Larry Kudlow, who was a lobbyist for Bear Stearns at the time. One Christmas I received a bottle of wine from a Solomon Brothers executive. I was instructed to send it back.
I will never forget a strategy meeting we had in Bush’s living room at the Naval Observatory when he was vice president and running for president. His amazingly strong but humble wife Barbara was needlepointing silently the entire time, while a bunch of self-important men debated their campaign ideas.
When we were about to wrap it up, Barbara made a comment that made it clear she had listened to every word of our conversation. And George Bush listened attentively to her. She was his most trusted adviser.
My bosses at Treasury were not political animals. In fact, none of them were political at all. Reporting to Secretary Nicholas Brady, a former Wall Street CEO and Bush’s Yale baseball teammate, were two Harvard Business School finance professors. When one of them left to become vice chairman of the Federal Reserve Board, Jay Powell, the current chairman of the Fed, left Dillon Read to become my boss, with no political chops.
Bush was a one-term president because he lacked “the vision thing.” It is true that compared to his predecessor Ronald Reagan, Bush was not a big-picture guy.
He had so much experience in government that he considered it his job to tackle the myriad challenges that faced our country. One year, in drafting his State of the Union message, he solicited input from every agency. It was, as you might expect, a laundry list of unrelated priorities.
Rather than his words, his life was his message. Bush loved God and family first. He loved his country as much as any man who ever occupied the Oval Office. He did not make decisions based on how they would make him look. All he cared about was doing “the right thing.” What a great mentor and boss! I will miss him.
Although I am not a medical professional, I have taken the same number of nutrition classes as the vast majority of doctors—zero. That’s right. Most medical doctors know next to nothing about how what we put into our mouths every day effects our bodies.
My saga with gluten is illustrative. There are 18 million Americans who suffer from gluten sensitivity, an exponential increase in recent years. Yet only about 3 million actually suffer from a true gluten allergy. So, what is behind this explosion in gluten problems?
There are a number of theories. One possibility is a surge in foodies who derive pleasure from badgering waiters about the ingredients in every menu item before ordering a meal. Another possibility is that the human body suddenly and radically evolved to reject gluten, after thousands of years of tolerating it.
However, there is a more plausible explanation: our food has changed.
Nearly a decade ago I started having joint aches and neuropathy (shooting nerve pains). I went to a series of doctors, including a top neurologist at a well-known academic hospital, who offered no explanation whatsoever, just a smorgasbord of pharmaceuticals to treat symptoms, not problems.
After listening to me vent about my team of clueless physicians, a friend of mine who is one of UNC’s leading neuroscientists suggested that I stop eating gluten. After a quick Google search to find out what exactly gluten was, I omitted it from my diet, and within weeks my years of pain vanished.
But it turns out gluten wasn’t the problem after all. Every year, I take my family to France or Italy for a couple weeks where I gorge on bread, pasta and pizza daily, with no discernible effect whatsoever. My problem is with American gluten.
Did you ever wonder why a baguette purchased in France develops mold after a few days, while your American bread lasts a month? American food companies use additives to preserve the shelf life of processed products that cause damaging inflammation in our joints, intestines and stomach (which contains 100 million neurons).
Some people blame the pesticides used on U.S. farms for the toxicity of wheat products, while others blame the genetic modification of domestic wheat. My research indicates the preservatives infused into wheat-based products are a contributing factor.
The vegetable oils used in breads to prevent them from hardening are bleached, deodorized and refined so that bugs, bacteria and other microbes won’t eat them. Inconveniently, most human cells are microbes, and our stomachs are a bacteria convention.
Those tortilla wraps that retain their soft and supple features for weeks contain glycerol, which is a compound used to manufacture anti-freeze and nitroglycerin. Our bodies were not designed to seamlessly absorb these chemicals.
Moreover, studies show that processed or refined wheat leads to greater incidences of Type 2 diabetes, Irritable Bowel Syndrome, obesity, and cognitive decline, in addition to pain from inflammation. But rather than instructing us to eliminate the cause of the problem, most doctors prescribe some chemical to offset the problems caused by other chemicals in our diet.
Millions of people who suffer from unexplained digestive maladies and joint pains may well be sensitive to the food products they consume daily, but just don’t realize it.
One possible solution would be to demand that Blue Cross/Blue Shield, or the government, underwrite annual trips to Tuscany or Bordeaux for gluten sufferers. However, a less expensive alternative would be to stop granting medical degrees to people who have never taken a nutrition class.
A “liberal education” does not mean you studied under Elizabeth Warren. According to the Association of American Colleges and Universities:
“Liberal Education is an approach to learning that empowers individuals and prepares them to deal with complexity, diversity, and change. It provides students with broad knowledge of the wider world (e.g. science, culture, and society).”
The goal of most American universities is to provide students a liberal education, as defined above. But many are failing miserably. You cannot prepare young minds to deal with “complexity, diversity and change” without exposing them to diverse ways of thinking. A school cannot impart “broad knowledge of the wider world” without professors who are familiar with the wider world that exists beyond major cities and college towns.
If a school has a faculty comprised of every nationality, race, and gender identity possible, teaching the same world view, you have no academic diversity whatsoever. You simply have different flavors of Kool-Aid.
UNC-Chapel Hill ranks ahead of liberal stalwarts Harvard, Yale, Stanford, Dartmouth, Duke, and UC-Berkeley in one category: the percentage of liberal arts faculty registered as Democrats.
In 1970, Democrat voter registration among university faculty across the country outnumbered Republicans by 3.5 to one. Nationally, that disparity has soared to 11 to 1. At UNC, there are 23 registered Democrats for every Republican in the departments that address political and social issues, according to Econ Journal Watch.
Many academic departments have a toxic culture that equates conservative thought with ignorance. After I suggested in a previous opinion piece that there was a debilitating lack of political diversity at UNC, one professor queried a mutual friend: “Doesn’t he understand that academics are liberal because that is the way intelligent people think?”
Such hubris is reminiscent of Hillary’s “deplorable” comment. Surely there are more brilliant conservatives working in the technology, health care and financial industries than all the college professors combined. Perhaps the toxic academic culture doesn’t appeal to them.
I received a call last year from a former UNC chancellor. He asked if I would participate in a debate following a video to be shown to retired faculty where I would defend the “conservative” perspective. I chuckled and asked him: “Do you mean to tell me that among the thousands of UNC faculty, the best you can do to find a conservative perspective is a part-time business school professor?” He confessed that, “Yes, we do have a diversity problem.”
That ranks as one of the greatest understatements I have heard. But at least he recognized it as a problem. Apparently, the faculty doesn’t see it that way. They are doing nothing to address the disparity. Academics embrace all underrepresented minorities on campus — except conservatives.
One of the nation’s leading conservative scholars, Robby George, who occupies the chair at Princeton once held by Woodrow Wilson, was recently invited to address the UNC Board of Governors. At dinner the night before, Professor George explained to us why there have been none of the disruptions at Princeton we witness at Middlebury, Berkeley and other campuses involving violent protests, shouting down and censoring conservative speakers. He said, “When students have an opportunity to engage in civil discourse, they don’t feel compelled to engage in uncivil discourse.”
Until UNC can demonstrate that it employs a critical mass of nationally-recognized conservative scholars, like most other leading universities, it cannot pretend to offer a “liberal education.” Fortunately, there are a few thought leaders on campus who recognize this. Let’s pray (not in the classroom) that they will be effective change agents.
Community columnist Michael Jacobs is CEO of Jacobs Capital and on the faculty of UNC’s Kenan-Flagler Business School.
In a world where the new normal is the extreme, I detest extremes.
I am a Republican who doesn’t watch Fox News. I try to figure out how people on the other side of the aisle think, so I read the New York Times and Washington Post daily.
I don’t understand why black people consistently vote for liberals in overwhelming numbers while they flee the state’s most liberal towns, Chapel Hill and Asheville, the only two North Carolina communities that lost black population the last decade.
It doesn’t make sense that UNC-Chapel Hill professors, who are supposed to prepare our youth to think independently, complain about our state’s political system being rigged by gerrymandering, yet select a social sciences faculty whose party affiliation is 23 to 1 in favor of Democrats.
I don’t understand how Google maintains 1,000 data points on every American, yet our government can’t fully inform gun dealers of people’s criminal records.
Nor do I see the logic in why taking guns away from everyone except criminals will make the world a safer place.
It makes no sense to me why the president is so obsessed with the Russian investigation if nothing happened.
I don’t get how lowering corporate taxes constitutes a war on the middle class when such a large percentage of the shares of corporations are owned by pension funds and individual accounts that fund the retirement of the middle class.
I am totally bewildered how people can say with a straight face that freedom of speech is a valid principle only when they agree with what is being said.
It escapes me why progressives care more about the size of a chicken’s house than the cost of a poor person’s food.
It doesn’t register how CEOs of public companies with shareholders and customers of every political stripe feel their job is a platform to pontificate about their personal agendas.
Admittedly, modern politics is confusing. But why did the Democrats nominate a white woman for president who lost 52% of the white women vote?
It perplexes me why we apply a tax to companies when they hire a human but give a tax deduction to those which purchase robots.
I can’t comprehend why a monetary system where you can lose your entire net worth if you forget your password is the wave of the future.
I don’t understand how an academic institution can consistently admit 60 percent of its students from one gender yet teach that all gender bias harms that same gender.
I still believe men and women are different. How passé!
I’ve been around too long to understand why educated people embrace socialism when it has never worked anywhere…ever.
I don’t care what happens to a statue for a different reason than everyone else cares what does happen to it. I proposed to my first wife next to Silent Sam, and the marriage did not work out.
I still hang on to the old-fashioned notion that academic freedom gives you the right to attack ideas, not people.
And I will never understand why the book that has had the most profound impact on modern history is banished in most classrooms.
Finally, I can’t figure out why our nation enjoys being polarized. I worked for a moderate president, George H.W. Bush, and was recruited to senior positions by both Presidents Obama and Trump.
Clearly, I am out of touch with modern thinking, so don’t ask why The News & Observer would request that I write a monthly column. I have no idea.
This suggestion will lead to concerns that there will be more children claiming the dog ate their homework, but the idea of using dogs to protect our schools is deadly serious. Rather than asking 72-year old kindergarten teacher Miss Mildred to pack heat, we need to place explosive and weapon detection dogs in our children’s schools.
The United States military spent billions of dollars trying to develop technology to detect the improvised explosive devices that maimed and murdered our soldiers overseas. But none of the equipment the Defense Department has produced compares to the effectiveness of the dogs that were deployed.
A dog’s nose is 1000 times more sensitive than a human’s. According to a report by Auburn University, “U.S. Customs and Border Protection has more than 800 canine teams that work with the U.S. Department of Homeland Security to combat terrorist threats, stop the flow of illegal narcotics, and detect unreported currency, concealed humans, or smuggled agriculture products.”
Today explosive and weapons detection canines are being used by the NFL, Kentucky Derby, and Masters golf tournament. Southern Pines-based K2 Solutions was the leading supplier of bomb detection dogs to the Marines in Iraq and Afghanistan.
Today, K2 dogs protect you at concerts and Hurricanes games at the PNC Center. Dogs from Southern Pines were deployed at this year’s Country Music Awards in Nashville, the Denver presentation of “Hamilton” and the Super Bowl. One of the world’s most famous musical performers is in the process of contracting with K2 to have its dogs patrol every one of her concerts, regardless of where they are held.
The State Department is in the process of placing detection dogs at every “high-threat” U.S. embassy across the globe. Dogs found Osama bin Laden. Some of the applications being developed at K2 are mind boggling.
If you place a properly trained dog in a room and pump in air sucked out of a cargo container, the dog can tell you if there is an explosive in the container. This approach is more effective and far more efficient than manually inspecting the cargo.
With all these proven applications, it is unconscionable that we don’t have state or national programs for the use of dogs to protect our most valuable asset, our children.
Weapons detection dogs come in many sizes and breeds. Some are docile and playful, such as Labradors who have followed people with concealed weapons around football stadiums and laid at their feet when they sat down so that security officers could frisk the offender.
Others, such as German Shepherds, can be taught to attack anyone on command who is carrying a weapon or explosive device. Belgian Malinois and several mixed breeds are also used.
Consider where within the airport the devastating bomb attacks occurred in Brussels and Ankara—in the lobby before passing through security. Dogs could have identified these threats and saved countless lives.
A weapons detection dog supervised by a trained person can screen 150 students per minute. Not many schools have that much foot traffic. They can be placed in high-traffic choke points during class changes, and search lockers between classes. Simply the presence of a detection dog would be a meaningful deterrent.
The breed deployed can be tailored to the threat risk of the school. For example, an elementary school might choose a friendly breed, which the students would come to know and love, while a suburban high school might opt for a more aggressive canine.
Dogs alone are not a silver bullet to ensure 100 percent safety. We still need people in law enforcement who actually do something when a teenager posts on Facebook that he plans to shoot up his school. And we need security officers who have the courage to enter the school when a terrorist opens fire on innocent children. But detection dogs would certainly be a huge step in the right direction.
If we can use dogs to protect our soldiers, concert goers, football fans and overseas diplomats, why can’t we use them to protect our children?
Michael Jacobs serves on the board of K2 Solutions, which provides threat mitigation and canine detection services.