Simon School Communications Blog

Professor George Cook Featured on D&C Podcast: Hybrid Automobiles

Simon School Executive Professor of Marketing George Cook recently was featured on a podcast that focused on the marketing of hybrid automobiles. Hosted by Sean Dobbin of the Rochester Democrat & Chronicle, the podcast highlights how hybrid cars (like the Toyota Prius) are progressing through the product life-cycle.

Cook speaks to the challenges facing the industry and clarifies some public misconceptions. Is the hybrid's success dependent on ever-rising gas prices? Will future energy legislation help speed the move away from gas-powered autos?

To hear the podcast in its entirety (19 minutes), access Episode 21 from this link:  http://www.democratandchronicle.com/apps/pbcs.dll/section?Category=PODCAST09

Weathering the Economic Climate

• A distinguished panel of Simon Graduate School of Business faculty and alumni discussed the many facets of the current financial crisis at a standing room only public forum at GEVA Theatre in Rochester earlier this week. The public forum, "Weathering the Economic Climate," included time for questions and answers from the audience. Panelists were:

• Daniel J. Burnside '01, director of quantitative research at Clover Capital Management in Rochester, an adjunct lecturer in finance at the Simon School and a chartered financial analyst and certified financial planner;
• Ronald H. Fielding '76, senior vice president at OppenheimerFunds;
• G. William Schwert, Distinguished University Professor and professor of finance and statistics at the Simon School, an expert in stock market volatility;
• Clifford W. Smith Jr., Louise and Henry Epstein Professor of Business Administration, professor of finance and economics at the Simon School; and
• Toni M. Whited, Kuechenmeister-Bascom Professor of Finance, University of Wisconsin, who will be joining the Simon faculty in the spring.

The public forum, co-sponsored by the Rochester Business Alliance and GEVA Theatre, was viewed around the world via live streaming video on the Simon Web site. To view the public forum, click here.

Time for ‘Trickle Up’

Ronald W. Hansen, Simon School Senior Associate Dean for Faculty and Research, has an alternative view of the proposed Wall Street bailout. Hansen advocates tackling the problem by first addressing the core issue, subprime mortgages.

 

“The current ‘bailout’ proposals have been couched as rescuing Wall Street with some impact on Main Street.  Yesterday’s reaction on the stock exchanges has brought some attention to the effects on Main Street.  The current discourse often overlooks the role that Main Street played in generating the crisis.

Subprime mortgages are the most frequently cited source of the illiquidity. But rather than addressing the subprime mortgages directly, the political process has opted to bail out Wall Street first and then sort out the value of the mortgage backed securities.  This has led to the perception that Congress and the Administration are more concerned about Wall Street than Main Street. 

Financial Crises

Despite the concerning news this week on Wall Street, Simon School Dean Mark Zupan remains optimistic about the U.S. economy. Dean Zupan sat down with BusinessWeek yesterday at their New York City headquarters and discussed several topics including the recent financial crises. Zupan says the economy is still surprisingly robust. “While extremely painful, the events on Wall Street this week fundamentally underscore the resilience of the U.S. financial sector." Zupan said. "In Japan, it took over a decade to deal with such painful restructuring, post the boom in their economy in the 1980s. A similar restructuring in the U.S. will occur within a tenth of the time period."

As for job placements and starting salaries, Zupan said so far they are holding steady at the Simon School. However, he expects the top five business schools to feel a heavier impact on the placement front. An excerpt of his interview is posted on BusinessWeek's Facebook page.

Peter Simon Delivers Commencement Address

J. Peter Simon, son of the late U.S. Treasury Secretary and School's benefactor and namesake William E. Simon, received an Honorary Doctor of Laws degree and delivered the Commencement address during ceremonies held on June 8, 2008. Peter Simon, co-chairman of William E. Simon & Sons and chair of the Simon School Executive Advisory Committee, gave an inspiring speech encouraging graduates to be optimistic about their careers, their lives and the U.S. economy.

Watch his full speech here:

Some highlights: "Great people are those who are willing to risk total failure to achieve their dreams. When you have a dream, there is always a purpose for your life, but you will only realize your dreams if your are willing to take risks."

On entrepreneurship: "The Simon School's emphasis on entrepreneurship is exactly where Dad (William E. Simon) wanted it to be. Entrepreneurship is not for everyone. You have to be able to walk the tightrope without the net. It's in the risks you embrace and the challenges you overcome. Entrepreneurs are the unsung heroes of our modern age."

On the economy: "There are people out there who will tell you that your sacrifices are for naught, that the economy is in crisis. I'm no Pollyanna, but I see a very different America today. If we are in a recession, as the media is so eager to report, it is still a non-recession. We are not in a housing depression, four million mortgage loans are non-performing, the rest are performing. Lots of industries are thriving, 146 million people are bringing home paychecks. A recent Wall Street Journal article titled "Who Stole the American Spirit?" asserts that something else is going on here. We are in a cultural rut of pessimism draining us of possibilities, eroding our status in the world. Never underestimate the resilience of the world's largest economy, to which comebacks are old hat."

Philly Fed Chief Plosser Speaks at Simon Economic Seminar

Charles Plosser, president of the Federal Reserve Bank of Philadelphia and former dean of the Simon Graduate School of Business, gave his view of the economy during the School's recent 28th annual Economic Seminar.

Plosser said the economy is poised for growth, but that the Fed may still need to take action to control inflation.

Plosser, who served as dean of the Simon School from 1993 to 2003, was appointed Philly Fed president in August. His speech is available on the Federal Reserve Bank of Philadelphia Web site, http://www.phil.frb.org/.

Economic Costs of SOX

Our Simon School of Business Dean Mark Zupan has written a white paper about the economic costs of the Sarbanes-Oxley act along with Simon School Ph.D. student Ivy Xiying Zhang.

According to Zupan and Zhang, "The accounting and compliance costs associated with the Sarbanes-Oxley Act (SOX) are well understood and fairly easy to estimate."

"These costs, however, pale in comparison to the overall economic costs of SOX, which we estimate to be as high as $1.4 trillion on the basis of the stock market reaction to SOX-related news announcements."

Among these harder-to-measure, but much more substantial costs, are the fact that SOX diverts the attention of senior management from doing business.

SOX was intended to enhance corporate governance and thereby restore public confidence in the wake of some high-profile corporate scandals. But specific provisions of SOX, while well-intentioned, serve to put additional sand in the gears of our country’s economic engine. So is SOX worth it?

We have many researchers at the Simon School who are researching current business issues that many of you are thinking about. For more information on our research visit us at our web site. We welcome your input. Comment here or contact us by email.