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Praise for March Cover

Congratulations on cracking the mold of a one-subject cover for the March issue. I found the four of your financial crisis articles extremely interesting, especially Niall Ferguson’s book excerpt on “Chimerica”! Peter Tufano’s proposal to invest tax refunds in U.S. bonds is beyond me! Liesl Pike Moldow’s (MBA ’93) “My Real Career” deserves praise for honesty and love. In the future I will look to my copy of the Bulletin for more than class news.

Mike Smedley (AMP 50, 1966)
Leamington, England

One-Sided Picture Presented

Your March interview with the AFL-CIO’s Damon Silvers (MBA ’95) illustrates a one-sided picture of the real world of union organizing. This is especially apparent in Silvers’s response to the question, “What’s wrong with secret ballot elections?”

According to Silvers, the proposed Employee Free Choice Act allows employees to have a secret ballot election but the “employer doesn’t have the right to force one.”

The reality is that the only thing companies can “force” is the union’s hand. Does the union truly represent a majority of employees, or are authorization cards obtained under duress? The question is answered through a secret ballot election conducted by the National Labor Relations Board. These elections are not conducted, as claimed by Silvers, like those in the Soviet Union where “it was not really possible for people to make a free choice.” If the NLRB believes the election was flawed, it can toss out the results and demand a second election or, in rare cases, require the company to negotiate with the union as sole bargaining agent for the employees.

Most companies will deny a union’s request to represent its employees on the basis of signed authorization cards, questioning their validity or the means by which the signatures were obtained. How is it possible to deny the right to a secret ballot election in a free and democratic society?

Dick Lindsay (PMD 32, 1976)
Portland, OR

Union Position Unpersuasive

In regard to the Employee Free Choice Act, I was hoping that Mr. Silvers might present a well-thought-out rationale as to why this union-backed legislation is needed and why it is good for employees. Alas, he didn’t.

In my 20s and 30s, I directly supervised a total of several thousand hourly workers in at least a dozen departments in both New England and the South. Some of these departments were unionized, and some were not. I have seen firsthand union threats and violence against employers and their property. Worse yet, I have seen unbridled coworker intimidation to and by union wage earners. In my opinion, if ever there was a group that must have a secret ballot, it must be hourly wage earners. These people often don’t have the financial wherewithal and broad general skills to leave behind a job where they are intimidated. Working in fear is a terrible way to live, and a secret ballot can ameliorate much of that fear.

Michael A. Petronino (MBA ’64)
Stratford, CT

Free Choice Act Is Bad Policy

Damon Silvers’s description of the so-called Employee Free Choice Act, currently before Congress, was particularly misleading. Here are the facts: Today, union organizers are able to call an election in a nonunion workplace by obtaining the signatures of at least 30 percent of the workers. The National Labor Relations Board then notifies the business owner that a secret ballot election must take place within six weeks. During that time employers wishing to make the case to their employees that they would be better off without a union are free to do so, as long as they do not use co-ercive measures. The election is held, and the union is either accepted or not.

Unions are now trying to change the rules, by lobbying for passage of the Employee Free Choice Act, under which workplaces would be automatically unionized if union organizers secure signatures from at least 50 percent of the workers.

It is difficult to conceive of any policy that would be more destructive to American business innovation. Given global competition, it is not in anyone’s interest to force a union bureaucracy into businesses that must be innovative and nimble.

Karen Donahue Alden (MBA ’88)
Atherton, CA

Workers’ Rights Not at Issue

In response to the interview with Damon Silvers, it would be wrong to let the Employee Free Choice Act succeed. From my nearly four decades of experience with unions, I see three issues that make this bad legislation.

First is the high degree of corruption in union leaderships. Next, many organizers use high-pressure tactics to get cards signed. Probably the most damaging however is the impact unions have on innovation. Unions fight change — any change — on the factory floor. Over the years, management gives up trying to make factory improvements, and competitiveness is lost. Then jobs are lost, and the unions blame someone else.

Ron DiLiddo (PMD 50, 1985)
Rochester, MI

Document HBS’s Role in Crisis

I was happy to read in the March issue that the financial crisis has motivated HBS to write cases on the topic and to conduct a curriculum review. As part of this exercise, I hope the School’s researchers will make a record of the number of MBAs from HBS and other leading business schools at each level of the companies and government agencies that have played a role in the demise of our financial system.

How many HBS alumni have served on the boards, in executive positions, as consultants, analysts, etc., at each of these companies? How many HBS alumni have served on congressional committees that have made policy decisions that led to the crisis? How many HBS alumni have served at various levels of the Treasury Department, Fannie Mae, Freddie Mac, and other government or semigovernment agencies? Collecting and analyzing these data may be useful in the classroom and in understanding the impact that the School has had in this crisis.

Peter Jensen (MBA ’79)
Morgan Hill, CA

Financial Crisis Deserves Study

The HBS faculty’s response to the global financial crisis may be “extraordinary,” but it runs the risk of missing the mark. Studying “meltdown,” “executive pay,” “reporting,” and “liquidity” could be useful. Those subjects, however, are consequences not causes.

Please give some thought and study into the mentality of the people and the culture of the organizations that created the crisis in the first place, and those who enabled it in the second place. I look forward to your article in a subsequent Bulletin on “The Culture Behind the Crisis.” An interesting footnote to that could be a discussion of the implications for the HBS course of study.

Franklin H. Coursen (PMD 25, 1973)
Harwich Port, MA

Regulation Works

I am glad that HBS faculty members favor improved regulation to avoid future financial meltdowns. Regulation is not antithetical to market capitalism any more than traffic laws are to automobiling or catch limits to fishing. I spent my working years in book publishing, which is both highly regulated and furiously competitive. We need pro-business champions of the public interest like Teddy Roosevelt of my father’s time or Thurman Arnold of my youth.Â

John M. Pickering (MBA 5/’43)
Albuquerque, NM

Capitalism in Doubt

I was encouraged to learn in the March issue about the extensive response by the HBS faculty to the global financial crisis, with emphasis on diagnosis of its causes and analysis of solutions.

In our government’s response to the current financial crisis, I am alarmed by the magnitude of the bud-get deficits projected for years to come. Deficits of a trillion dollars a year cannot be sustained indefinitely. China, our largest creditor, is already very concerned about the dangerous U.S. fiscal situation. If we are unable to finance our huge deficits with international lenders, we will have to raise taxes further in the near term and/or increase domestic borrowing vastly. An expanded federal role in the economy will crowd out financing available for productive private investment and diminish growth and job creation.

The future of American capitalism is in doubt. HBS research and leadership should support the key role of U.S. business in ensuring our country’s economic recovery.

Daniel H. Taft (AMP 88, 1982)
Arlington, VA

Wall St. vs. Main St.

In the Anglo-Saxon/American capitalistic order, there are two important aspects of market capitalism — materialism delinked from ethics, and the heads Wall Street wins, tails Main Street loses formula that defines the relationship between Wall Street and Main Street. Moreover, government facilitates this order for the superrich in times of boom, and bails them out in times of bust. Today, we have government of banks, for banks, and by banks that must be bailed out at the expense of taxpayers.

As George Soros argued in his book The Crisis of Global Capitalism: “Capitalism and democracy obey different rules.... The interests that are supposed to be served are different: in capitalism it is private interests, in democracy it is the public interest. In the United States, this tension is symbolized by the proverbial conflicts between Wall Street and Main Street.”

For HBS professors to be able to contribute to solving the global economic crisis, they must think beyond the system that created them to be at its service. Can HBS and other business schools meet the challenge?

Abdulhay Y. Zalloum (AMP 93, 1984)
Amman, Jordan

AWOL Leadership

As an HBS graduate, Class of 1948, I was very pleased to see the December Bulletin devote so much space to the question “Who Will Lead?” I hope all business school deans will take this question personally.

I’ve always had the feeling that HBS was in the business of training leaders, and consequently I feel that you have to bear some responsibility for what your graduates have done to this country.

HBS and other business schools have long been aware of the dangers in the grotesque disparity of compensation between executives and workers; the dangers in the unsustainable and still growing levels of domestic and international debt; the dangers of securitization of mortgages; and the potential problems that could result from a financial failure of a mega-company in one sector of the economy.

Yet I’ve never heard a word of warning, much less some condemnation of these developments, from any business school leaders. In the future, starting now, HBS and other business schools should condemn these thoughtless and damaging lapses in both common sense and morality, and then help devise ways of limiting them in the future.

Edmund Coffin (MBA 3/’48)
Strafford, VT

Now Hear This

In your December article on Dean John McArthur, I could not help noticing an irritating little point. James Wolfensohn (MBA ’59) says that they (as foreigners) pronounced “schedule” incorrectly. That is not quite the way I would put it: They pronounced it differently from Americans. Several hundred million people around the world speak English, and there are differences in pronunciation of a variety of words. I wonder what Wolfensohn’s erstwhile countrymen in Australia would think if he told them they pronounced words incorrectly. Sorry for being picky on a seemingly minor point, and I promise not to take on American pronunciation of a host of words!

James Sinclair (MBA ’82)
São Paulo, Brazil

Dean McArthur Praised

I did not have the privilege of being Dean McArthur’s student while participating in the Central and Eastern European Teachers’ Program (CEETP) offered by HBS during the summers of 1992 and 1993. But I did have the opportunity to meet him at the end of the first leg of CEETP. We had a short talk, and I was impressed by his thorough understanding of the then important issues that countries in my region were facing. He radiated warmth while he shared his views on the future of education in modern business conduct.

At the end of our encounter, I received a copy of A Delicate Experiment, a history of HBS, with a very personalized dedication from the Dean. The book occupies the most important place in my library. In my classes I often talk about the HBS faculty and about the School’s formidable Dean. Your December article on Dean McArthur not only revived my good memories but also reinforced my conviction that I had met a man of exceptional human qualities.

Wladyslaw R. Switalski (CEETP ’92)
Warsaw, Poland

Admission by Proxy

I want to share an inspiring counterpoint to the grim events we are all enduring these days.

Upon my discharge from the Navy in January 1946, my new wife and I bought and refurbished a used house trailer and embarked on a three-month trip throughout the United States. Prior to leaving on our adventure, I applied for admission to HBS.

When we reached San Francisco, our final stop, I made one of my periodic phone calls back home. My father informed me that, in my absence, he had opened a letter addressed to me from HBS inviting me for an interview. Inasmuch as I was unable to get to Boston by the date specified (commercial air flight was not yet available), my father recounted how he had gone to Harvard on my behalf, taking two days off from his small business to travel by train from Altoona, Pennsylvania.

He must have done a pretty good job of convincing the interviewer of my sterling qualities. When I returned from California and appeared for a subsequent interview, I was told that my admission was a no-brainer based on having a father like that!

Richard A. Bobbe (MBA 11/’47)
Valhalla, NY

Bus to the Future

I read with great interest your December article on Energy Future, the 1979 book edited by HBS professor emeritus Robert Stobaugh and Daniel Yergin. It was a wonderful example of ideas surfaced here, forgotten here, pursued (usually in other countries)… and then “rediscovered” back home.

In 1970, while with the Port Authority of New York and New Jersey, I was the project director for the introduction of the Exclusive Bus Lane (XBL) on the New Jersey approach to the Lincoln Tunnel. This was the first contraflow freeway bus lane anywhere; it remains the highest hourly passenger-volume bus lane in the world. XBL helped focus attention on the potential of Bus Rapid Transit (BRT). But over time, BRT’s potential as a first-class, environmentally sound transit mode was forgotten. It was not until the late 1990s that BRT was “rediscovered” in Curitiba, Brazil, as part of the search by the City of Los Angeles for more effective and practical transit development. Now, BRT is “in,” with extensive applied and planned programs around the world.

In the future I hope we can hold on to our good ideas longer and move forward with them, instead of always having to rediscover them years later.

Leon Goodman (PMD 15, 1968)
Searingtown, NY

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