Interview Series: Part 1

Jordan Summers & Muaz Halees

Lindsay Aspegren’s career has taken him from Goldman, Sachs & Co. to an M.B.A. from the Harvard Graduate School of Business Administration, to co-founding North Coast Technology Investors.  His illustrious background affords him a unique perspective on the issues entrepreneurs face in today’s volatile economy. Ever since he graduated with distinction from Yale with a B.A. in History, Lindsay has been heavily involved in the world of entrepreneurs. 

We were lucky enough to get a few minutes with Lindsay Aspegren, to gather some of his thoughts on entrepreneurship, career paths, and the current state of the economy:

 

The Method:                There has been a movement claiming that the bailouts, intended to save huge businesses, would be better served as investments into small business with big potential.  Where do you stand on this issue? 

Lindsay Aspegren:       My general belief is that small businesses can compete and compete well in all of the programs that have this “peer reviewed, grant process” associated with them.  Both big and small can co-exist and gain assistance from the stimulus package. 

TM:                              Don’t you feel that the thresholds small businesses’ must meet to gain stimulus help are much higher than those for large corporations? 

LA:                              In general they represent the product of political compromise and a theoretical idea in someone’s head, not the market’s needs.  But there are numerous government programs available to a company like Dow that a small company cannot participate in, and vice versa, there are programs that Dow cannot participate in that small companies have access to. 

TM:                              What types of opportunities would you pursue if you were starting over today? 

LA:                              If you were talking to me as an entrepreneur I would say molecular diagnostics.  Diagnostics based on gene identification and personalized health; they offer limitless opportunities.  That is the new game, because right now we are seeing the triumph of economics over finance, which is almost the exact opposite of the last twenty years.

TM:                              How does the triumph of economics over finance affect Wall Street?

LA:                              The Wall Street game will come back.  They will find a new way to re-invent themselves. 

TM:                              Isn’t this fascination with decreasing risk in the market, actually serving to create a de-motivating environment for investors.  Isn’t the risk what drives investment, otherwise we would all throw money into a CD.

LA:                              The classic issue with all regulation is that they’re trying to correct past mistakes that our now fully in evidence and now people make different mistakes. 

TM:                              Being on the front line in the late 1980s with Goldman, Sachs; how surprised are you with the current state of the banking sector.

LA:                              Well I was never in fixed income or mortgage backed securities, I was in the equity side.  I used to work with Hank Paulson while I was at Goldman, Sachs; I’ve been on a number of deal teams with him, I was an analyst, and even then he was quite a force of nature.  But the creation of derivate financial instruments just started while I was there, so things like interest rate swaps which had very legitimate uses were just being baked into the financial products sold at Goldman.  But what’s happened since is the decoupling of those swaps; now the swappers don’t know each other.  All of a sudden you lose track of who you’re dealing with, and the thing basically gets sliced up into many parts, and when one little piece pulls, there is a huge problem.  It becomes highly, highly, leveraged and it’s hard to find out who’s accountable to whom.  It only takes one small hit and everything starts to go away. 

TM:                              What beliefs did you hold in the beginning of your career that has changed?

LA:                              What someone told me once is when you look at your career in the beginning its difficult to see where you’ll end up, but in retrospect, when I look at my career and where I’ve been it makes perfect sense. The challenge is to look two steps ahead, the job I take today is great but what’s the next job, what am I shooting for.  Pinning those points together is a valuable thing particularly for guys like you or people reading this article because eventually it will all fit together

TM:                              So you don’t judge the job on its merits you judge it on how it fits into your life plan?

LA:                              Of course I do, that’s part of its merit.  When you look back your initial job will have this random characteristic, like “I never thought I’d work for a rental company,” but four years later you’re working in leasing and in ten years you’re in a specialty finance company and you’ll understand all the attributes of big leasing programs because of the three steps made in between. 

TM:                              What is the most overrated characteristic or skill for an entrepreneur that you’ve observed?

LA:                              I would say, the administrative skill set a typical MBA has, I don’t think it matters, I have an MBA, and you have MBAs, but as a predictor of entrepreneurial success it means nothing.  What is administration?  Why would you want to be a master at it?  Why do they call it a school; if you really wanted to go start a business go get passionate about something and learn it really well. 

TM:                              So you’d say the best prep course for our careers would be our experiences much more than our academics?

LA:                              I think that your career experiences are what matter, that’s your destiny, the tool kit is generic, and applicable to a number of fields.  Experience and the specialization that goes with success in a field is what make entrepreneurs.

Marijuana: The Real Stimulus Package

Muaz Halees

We need to legalize marijuana. I’ll wait for all the supporters and detractors to rid themselves of superfluous comments.

(Waiting.)

(Waiting.)

(Waiting.)

Now that we’re all ready to have an intelligent conversation about marijuana, I would like to continue. Legalization will improve a number of health, social, and economic issues we currently face as a society.

Let’s start with the numbers compiled by Harvard Professor Jeffrey A. Miron.  He asserts that “$7.7 billion per year in state and federal expenditures on prohibition enforcement would be saved and if it were taxed similarly to alcohol or tobacco, it would generate as much as $6.2 billion annually.”  You should probably re-read that last sentence to accurately grasp the potential profits available if legalization is realized.  This study does not account for the potential profit windfalls realized if the government serves as the sole proprietor of the marijuana industry, which would put the profits in excess of $30 billion dollars. 

Legalization would create two distinct revenue streams.  The companies that sell marijuana would have to pay income taxes and all sales of the drug would also be taxed.  The taxpayer money that is spent senselessly prosecuting marijuana offenders could be spent in a number of more efficient ways, or returned to the taxpayers.  The budget for drug enforcement may not have to be so large or could be re-focused on preventing far more dangerous sorts of drug abuse.  The jail space wasted on marijuana offenders could be better utilized to house real criminals. 

The war on drugs is a failure of nearly biblical proportions.  I am not employing hyperbole; in fact, I am actually understating the miserable results of this ill-fated war.  The only way to mitigate the losses incurred is by legalizing marijuana.  Prohibition has not prohibited anyone from acquiring marijuana, as evidenced by the 85% of high school seniors that admit to its use.  I don’t understand why we give credence to third party detractors on this issue while we routinely dismiss their moral and ethical arguments regarding the sale of cigarettes, alcohol, birth control, fur, caged chickens, or any number of other issues they decry. 

Opponents to legalization claim that its use causes crimes. This is a lie.  There is correlation between the two, but not causation.  Their argument is tantamount to claiming that abortions cause global warming.  Our prohibition of marijuana may actually be fueling the crimes associated with it.  Violence is used to resolve marijuana disputes because that is the only avenue available.  These violent methods were employed during the underground casino age and during alcohol prohibition.  The violence associated with these two industries decreased systematically after both industries were partially or completely legalized. 

Legalization of the drug would remove the pejorative connotation associated with it.  Scientists and doctors could research its health benefits without fear of castigation.  There may be more money allotted to researching those potential benefits.  Its legalization may also force parents to engage in serious, poignant conversations with their children on the topic of drug use.

The debate should take place, and the supporters of legalization should not be grouped into the same category as the potheads working at the local 7-11.  We are made up of a wide range of individuals, but most noteworthy are those in the economic field that support its legalization, such as Nobel Laureate Milton Friedman and a number of other economic visionaries. They signed a petition in 2005 extolling the financial virtues of marijuana legalization, so don’t be so quick to dismiss this argument. The arguments against legalization have always been stale and baseless; this economic downturn, however, may provide the motivation needed to overturn a failed referendum.

Book Review: The Wordy Shipmates by Sarah Vowell

Muaz Halees

Sarah Vowell is the girl you crushed on in high school, even though you were embarrassed because she was emo and nerdy.   She grew up to be a writer and now she is funnier, smarter, and more relevant than you.  But you can still connect to her through The Wordy Shipmates.  In her fifth book she has masterfully married sarcasm, pop culture, twitter tics, poignant one-liners, and the Massachusetts Bay Colony. 

Her pedantic attention to detail can be appreciated by even the most ardent, popped-collar wearing, Bud Light-drinking frat boy.  She is a high-browed historian, except her high brow is pierced.  The only nauseatingly pompous part of the book is her acknowledgments section, which is a master’s class in name dropping.  But alas, if the Puritans have downfalls, then so can she.   

She skips the more famous Pilgrims and focuses on their less noteworthy counterparts, the Puritans–along with their establishment of the Massachusetts Bay Colony.  The religious texts are keenly broken down by Vowell, who is a renowned atheist.  The Puritan religious message is praised and used to highlight the lowlights in the religious message of today’s holier-than-thou pontificators.  Vowell claims that the classic teachings of Puritan John Winthrop comforted her following Sept. 11^th and served as her inspiration for The Wordy Shipmates. 

The book begins with the departure of hundreds of English colonists and the difficulties faced as they establish the aforementioned Massachusetts Bay Colony.  She highlights the pains they went through dealing with the scarcity of food, shelter, and safety.  The Wordy Shipmates analyzes the lives of New Englanders during the tumultuous 1630s.

This book was my vessel, for one week, to escape the torpor and monotony of my daily grind.  She portrays the Puritans as they were: mirror images of us.  They were more than the cold, devout, dour individuals we perceive them to be.  They had conflicts between spirituality and society; they were intelligent, courageous, and awkward. 

There is an important story of America professionally placed within Vowell’s sardonic prose.  The Puritans left England to battle the brutal conditions of the new world.  They held onto England while forging ahead with their goals.  There are so many lessons in this book for us.  In a few short months we will face the hardships of a new world and we must stay the course and brave the treacherous conditions.  The Wordy Shipmates may provide some insight into ourselves while imploring us to laugh at the comedy of the human condition.

The Great Health Care Debate

Muaz Halees

We now have pretty good epidemiological evidence that the long-term health consequences of living under our deficient healthcare system are considerable.  There is something inherently American about catering to the “best” while giving much less attention to the average.  We excel at advancing the “best” but fail at moving the average from the middle closer to the front of the line.  The US healthcare system is a definitive “best” strategy.  This economic model of our healthcare system is demoralizing and divisive for what? To benefit the few.  Universal healthcare is the answer because privatized healthcare is obviously not.    

Nationalized healthcare would create a national database alleviating many of the wasteful inefficiencies doctors face during treatment and diagnosis.  Doctors would be able to avoid the insurance premiums, malpractice and liability insurance, insurance submissions, claims approval, and focus on their job—tending to the sick.  Doctors and patients could work hand-in-hand practicing preventative measures.  Patients avoid routine check-ups now because of the lack of coverage, and they pay with their lives later on and we pay as a society for our ignorance.

Many opponents of universal healthcare cite the massive price tag associated with providing it to the masses.  They claim that the only way it could work is through severe taxation or through compulsory coverage premiums. I am of the opinion that a small bump in my taxes is worth improving the lives of my fellow citizens, but I may be in the minority.  Let’s pacify these bottom-liners for a moment.  The Canadian system, which provides universal healthcare, spends 10.5% of its GDP on healthcare.  Juxtapose that with the whopping 16% the US spends on their embarrassing system.  Not to toot the Canadian horn too loudly, but their healthcare system actually outperforms the US system in the two most commonly used quality metrics, life expectancy and infant mortality rates.   

There is also a fear that US citizens may be forced to look elsewhere for medical assistance, à la the Canadians that come to the US for some of their healthcare needs. My counter to that? So what.  Americans are doing that today, as we speak; insured Americans are going to India and South America to get cheaper healthcare.  That option will always be there, and will always be used.  If that criterion is used to degrade universal healthcare, then it must be referenced when highlighting the failures of the current system. 

The next argument volleyed by opponents of universal healthcare is the inefficiencies of the government.  They claim that healthcare system would become the DMV.  But why couldn’t it be as successful and efficient as the US military, or the US-run anti-discrimination agenda, or the CDC.  These same opponents of the US government attack it while living in the safe confines that same inefficient US government provides to them.    

Public enterprise has merits, but the government has a responsibility to ensure the well-being and security of its citizens, not to ensure public enterprise.  The failed healthcare system in this country is our scarlet letter.  Our allegiance to it is deteriorating our sense of social solidarity and our efforts to address the needs and problems of the population as a whole.  We are failing the 50 million uninsured as well as the 100 million underinsured Americans. Universal healthcare is not some utopian edict that will improve the lives of every single citizen.  It is not a strategy for becoming the best; it is a strategy for becoming better. Potential imperfections should not cause us to lose sight of substantial improvements.

The Great Health Care Debate

Jordan Summers

Does our current health care system meet the standards of quality, accessibility, affordability, and equality that we as the most prosperous and free nation in the world should hold ourselves to?  To deny that our system is currently flawed is to take a position of ignorance and fail to recognize that our system is falling short in each of those categories.  Our current mix of private and public participation in the industry is clearly failing, and there seems to be two directions that health care reform can take. 

Our new administration’s plans for health care are consistent with many of the other strategies they’ve designed and implemented thus far.  As a result of the Obama administration’s initial spending, as well as the spending of the Bush administration, we have been somewhat desensitized to the mind-boggling spending by our government. Some of this spending dwarfs the potential bill for the president’s health care plan.  More central to the debate are the effects they will have on the quality and affordability of our health care, as well as the long-term effects they will have on one of our nation’s most profitable and stable industries.  The main reason for concern on both of these fronts is the more involved role the federal government will take in the health care industry under the proposed reforms.

Essentially, the proposal outlines a public plan in which the government would serve as a health-insurance company providing coverage to all.  However, a government-sponsored plan would immediately generate many problems.  Primarily, it will create an environment where the government will “compete” directly with private insurance companies.  Without being subject to the same risks and constraints that confront a private firm, the government would have a distinctly unfair competitive advantage.  With the ability to offer artificially lower prices, companies would be driven to move from the plans they currently provide for their employees to the new ‘public plan’.  This would directly undermine President Obama’s repeated claims that his initiatives would not have an effect on those who are currently satisfied with their health care plans. 

With a public plan, costs would be driven upward as hospitals, physicians, and drug companies will have no incentive to price competitively, similar to the way they do now.  With a single-payer system there would be no reason for individuals to be concerned with the prices of the service they’re receiving.  Currently this effect can be seen not only with employer provided insurance but also with Medicare, Medicaid, and SCHIP.  Essentially people have no incentive to make a conscious decision about the necessity of the care they are receiving or how much it costs because someone else is paying the balance.

The real solution can be found in increasing the amount of competition within the industry.  Driving down the costs and increasing doctors’, hospitals’, insurers, and drug companies’ incentive to provide service and products of the highest quality at the lowest cost, the same way that industries are forced to do in order to survive.  Many companies have seen a significant reduction in their health care after modifying their plans to provide a stipend for health care up to a certain amount, say $1,000.  In this instance the individual would be able to use that $1,000 for any health care service they receive, with insurance and a deductible kicking in for any expense beyond that $1,000.  If the employee doesn’t use the full balance in the year, what’s left is theirs to keep.  What this creates is the incentive for individuals to make health care decisions based on price and necessity.

Undoubtedly within a free-market approach like the one above there would still be a significant portion of the population who lack coverage; however with lower prices resulting from increased competition the need for insurance would be greatly reduced.  Also, with the emergence of social-marketing as one of the most effective methods of attracting customers, health care providers would be encouraged to extend their services to the least fortunate members of our society to increase their social impact. 

With increased competition in the pursuit of customers who are forced to shop around for their own care we can see the dramatic transformation of an industry which will provide the world a stark example of the best way to harness the power of personal choice and competition.

A Time for Change: Remaking the Grand Old Party

Jordan Summers

The Grand Old Party is suffering from some significant credibility issues.  After being completely overwhelmed during the 2008 election, the Republican Party is facing a period of significant choice.  After getting fat and happy, the party is confronted with a landmark decision regarding the direction the party should take in its pursuit of positions of influence.  As an individual who voted Republican in the two elections, I find the immediate reaction of the conservative base alarming. 

Take a look at the current faces of the Republican Party.  Sarah Palin, Rush Limbaugh, Dick Cheney, and to some extent George W. Bush are among the most recognizable and vocal members of the GOP.  Even those who seemed to show significant promise have fallen. Take for example Louisiana Governor Bobby Jindal, whose inept response to President Obama’s address in February sent him back into relative obscurity, or Nevada Senator John Ensign, whose recent revelation of an affair doused any presidential ambitions he may have had.  The call from many within the conservative base to reemphasize the party’s alleged hypocritical and irrational “values” will only amplify the leadership’s failure to live up to those values.

Undoubtedly many in the right are immeasurably frustrated by the fact that these individuals still represent the party.  Too often Republican leaders, who have most vocally preached the morals and values, have undermined the party’s credibility by violating the same principles and values which they have demanded of others.  The acceptance of the recent failures of the Bush administration, and taking responsibility for the poor decisions of many of the party’s leaders are the first steps back to relevance.

Ultimately, the problem is that the party has lost direction. Its leaders once took a stance of great humility, and deferred to the power of the American people rather than government programs and bureaucracies.  Currently, the party seems more focused on returning to power than self-improvement. The GOP should return to being a party that emphasizes the vital role of families in our society—without placing a constraining definition of what constitutes a family.  It should be a party that works to get out of the way of the people and businesses, a party that allows the true competitive advantage of the United States to take hold.

By becoming the party that leads by example instead of preaching, and by reaching across party lines when it’s reasonable, the party can transform its public image.  In fact, there are already signs of opportunity for the Republican Party to reach out to independent voters who support many of the Democrats’ social views but express significant concern over the fiscal policies of our new administration.  It is values like fiscal conservatism and personal choice that can help bridge the gap and attain voters

Softball Tonight

Luke Krombach

The Richard DeVos Graduate School of Management is sponsoring a team in the Midland Softball Associations men’s slow pitch Central Division. The early predictions for the team were optimistic. Team manager Jeff Nowaczyk stated that, “because of the number of players that had played collegiate sports, I thought we could make an easy transition to softball and therefore have a fighting chance. However, the lack of general softball knowledge proved me wrong.” Facing stiff competition from some of Midland’s finest, the team fell short of Nowaczyk’s original predictions. 

The team posted a 0 – 4 record with one of the losses coming by way of the “slaughter” rule. The bats of the mighty DeVos hitters seemed to be silent until the 5^th game when a whopping steroids era-esque16 runs were scored.

Help came from an unlikely source in the form of a Canadian hockey player with little conceivable athletic talent. Mike Budziakowski has gone the Rudy route from gaunt punch line to indefatigable team leader.  He has posted the highest batting average on the team and has received the game MVP twice. Fascinating diving catches and overall good play have encouraged the other players to follow suit. Even with the atrocious start to the season, the guts and will of the team has shown through and spurred them to scrape and claw their way to a record three straight wins.

On June 18th, the team showed its newfound confidence by winning both games of a double header. The only negative points of the game were Muaz’s embarrassing strikeout and allegations of Mike Budziakowski’s use of performance enhancers.  (Alas, not everyone can glean as much energy from two whole pizzas like Mike can.) Additionally, Jordan Summers nearly pitched two shut-out games, falling short in the second with a few base hits that scored one run in the top of the fourth inning. Besides the minor awkward strikeout, the general play of the team was positive and praiseworthy. Although this is only my first article, I feel our paths are now intertwined and forever connected. I look forward to interacting and entertaining you in the future and in the many more issues of Softball Tonight.

Open Mike Night

Mike Budziakowski

I know what you’re thinking.  For the record, no, I am not attempting to change my direction in life and become a columnist—nor a writer or blogger, for that matter. Instead I’m grasping the opportunity to break away from the mold and exercise, even if for a limited amount of time, both sides of my brain. 

For the past ten months, I’ve had to endure the monotonous daily grind as an MBA candidate.  I’m not saying that it hasn’t been worth the $50,000 to receive a sheet of paper that bestows credibility to my personal set of self-proclaimed skills.  Actually, in that respect it has.  I’ve been auspiciously exposed to a wide array of interesting characters, cultures, and backgrounds.  For this reason I wanted to express my gratitude by writing the lifestyle section of this newspaper.

I don’t want to come off as pompous, but on a bi-weekly basis I will be your voice in today’s fashion, entertainment, and a guide in self-expression.  With limited experience, I will attempt to utilize my personal intuition to recreate and describe my encounters and observations around our joyful little town of Midland.  With a population of just over 41,000, Midland provides many cultural opportunities in fields ranging from music and theatre to science and the arts. Stop laughing—it really does.  With big heavyweights like Dow Chemical and Dow Corning calling Midland home, it’s no wonder that this town has transformed into one of the most desired living locations in Michigan. Stop laughing—I’m serious.

I’m going to dip myself into the local cuisines, eateries, and social festivals and events so that I may truly experience everything that there is to offer in this community and its beautiful surroundings.  I will look into the latest fashion trends and faux pas so that all my readers will have the opportunity to get a straight guy’s *cough, cough* point of view.  Probably not a good idea to go shopping immediately after reading my articles; you may get a cramp. Let it sink in before taking my advice. Not all of us can pull off capris. 

Let me be your petri dish. I want to leave this town pregnant with all the joys and wonders it has to offer.  Before I master business I will master Midland, and you will be taken for a ride only Keanu Reeves can appreciate. Buckle up; its open Mike night. Until next time, wink.

Transforming the Way We Drive

Keilan McInnis

Most North Americans will tell you that the biggest difference between domestic and European vehicles is size. Europeans’ reluctance to use automatic transmissions has fueled this difference. Because vehicles have remained smaller, the desire for automatic transmissions has not been created.  There is however a growing trend among manufacturers to fuse the desire for more control (e.g. manual transmissions) and the better fuel efficiency of automatic transmissions into one comprehensive design.

Dual-clutch transmission combines the control you get from a manual with the reduction of engine and transmission wear you get from an automatic. This technology has manifested itself in vehicles from manufacturers around the world.  Some use an up/down or tiptronic system that allows the driver to shift the gear lever back and forth in order to control the gear selection without the use of a clutch pedal, while others offer the use of paddles located either on the steering wheel or steering column to shift gears.

It should not be any surprise that technology with roots in the racing world has made its way into the lives of daily drivers. Where once it was the realm of the F1 driver to focus on the path ahead with both hands on the wheel and no worries about missing a gear, now drivers of all ages and all abilities can feel the rush of gripping the wheel and shifting gears at the touch of a finger.

There is debate over which system works the best because each system works slightly differently. The premise behind these systems is that when you are on the open road, you will want to control as much of the speed or responsiveness of the engine as you can. On the flip side of this you can leave the vehicle in automatic mode when in traffic and conserve fuel while reducing the strain placed on your engine and transmission.

A further aspect of the dual-clutch transmission is its ability to shift gears faster than the driver. As fast as your reflexes can tap a paddle or move a gear selector up or down, you can change gears without the worry of catching the clutch or grinding the gears. Now even the most novice drivers can feel like they are in the pole position.