"Like Virginia Woolf in The Hours, I cannot remember where I came from, and I lack certainty in where I am going....Let me tread into even more dangerous waters and speak to the impending conflict in Iraq." -- Pimco bond king Bill Gross, in a letter to clients, protesting a possible war with Iraq Economics has long been split among the quantitative folks, with their data, and the dissenters such as behaviorists, who say people often don't act rationally. Now, this divide is affecting course offerings at Harvard and Notre Dame, with implications for economics -- and for students -- nationwide.
Harvard professor Stephen Marglin is proposing a new introductory class as an alternative to one taught by Martin Feldstein, a top adviser to President Ronald Reagan. Marglin says his class "would provide a critical analysis of the assumptions of economics including the insights of behavioral economics." If Harvard agrees, it could boost behaviorists elsewhere, according to American Economic Assn. President Peter Diamond.
Marglin's move follows Notre Dame's proposed split of its economics department. Says associate provost John Affleck-Graves: "This will allow each group to have control over their own curriculum and hiring." And students to have more control over their education. Life after Napster looks pretty familiar -- at least for co-founder Shawn Fanning. On Feb. 24, the online-music pioneer's new owner, Roxio, which bought Napster's assets out of bankruptcy last year, said that before yearend Fanning would help to relaunch the site as a fee-based service.
That's not all Fanning and Napster's two other co-founders are up to. Each member of the twentysomething trio recently resurfaced in Silicon Valley with a new company in tow, saying he was hungrier and wiser in Napster's wake. "We were very naive," says Sean Parker, 22. "This time around, it's a completely different game."
Well, not completely. They're borrowing a few things from their past, such as a focus on consumer businesses that connect users through networks. Fanning won't give details about his new gig. Parker's startup, Plaxo, helps subscribers keep electronic address books current. Jordan Ritter's Cloudmark uses subscribers' spam reports to block unwanted e-mail across its network. Both companies are up and running. Says 24-year-old Ritter: "I'm not willing to make the same mistakes." Their new investors certainly hope not. It wasn't hard to read his lips. Meeting with the nation's governors in late February, President Bush told them: "We've got an issue with our own budget, and you've got issues with your budget."
Translation: It's time to do something about those out-of-control state budget deficits, which are expected to balloon to a total of $200 billion by next year, according to the National Conference of State Legislatures.
Like Bush, most governors came to office on a no-new-taxes pledge. But that may not last long. Here are states with the most likely tax increases. Meg Whitman and David Neeleman, the CEOs of eBay (EBAY) and JetBlue Airways (JBLU), respectively, spoke with Editor-in-Chief Stephen Shepard on Feb. 26 at BusinessWeek's "Captains of Industry" series at the 92nd Street Y in New York. Excerpts:
Meg, two years ago you said the tech slump would last 18 to 30 months. Here we are at the midpoint. What's your forecast now?
Whitman: It's another 12 months of pretty tough sledding. I sense a change in the optimism in [Silicon] Valley, but tech companies are having tremendous difficulty because enterprises are still not buying tech. But I do feel a significant change in outlook over the last three to six months.
How did you build your corporate culture?
Neeleman: I [try to] be a CEO that's with our people--for example, I fly at least one flight a week. I serve the customers snacks. They call me "Snack Boy" on the flight. I pick up trash, and when the plane lands, I help clean the airplane. I go out on the ramp and I throw bags. I think people feel proud to work for a company where the CEO isn't being driven around in limousines and flying in private jets.
How do you feel about expensing options?
Neeleman: It's the most nonsensical thing that's come down in a long time. Statistics [show] that the top five people in Corporate America listed in the proxy statement get 75% of the stock options. That's disgusting. It's hoggish. At JetBlue, people below vice-president level get 75% of our stock options. Why should you penalize our ability to give stock options to technicians, to dispatchers, and to pilots? It's been a way to really reward people for working hard.
Whitman: Every single employee at eBay has stock options. If we're required to expense stock options, which I think may well be coming, it will change the amount of stock options that we hand out. We might have to eliminate it altogether. I just think it's the wrong thing for new companies.
To see the Q&A, go to www.businessweek.com/mediacenter/ Could fears of terrorism and impending war be responsible for a boom in...paintball? The shoot-'em-up game, in which gear-clad players with guns tramp through the woods zapping each other with brightly-colored gels, is enjoying unprecedented popularity.
Online auctioneer eBay (EBAY) reports more searches for paintball items than for any other sports listing, including golf clubs and baseball bats, and says listings have gone from 3,267 in 2001 to more than 6,000 today. The Sporting Goods Manufacturers Assn. reports the number of paintball players is up almost 30% from four years ago, to 7.7 million, and spending on paintball guns, pellets, and other paraphernalia tops $225 million annually. Says Eugene Provenzo Jr., a University of Miami professor who studies toy and game culture: "It's a safe way of getting the thrill of being involved in the hunt and being hunted."
But the industry flinches at such talk. Burt Talcott, president of PaintBall.com, based in Tacoma, Wash., says the sport is more about teamwork and enjoying the great outdoors. "It gets your heart beating faster than any sport I know of," says Talcott. Yeah, staring down the barrel of a gun will do that.