What Peter Drucker Would Be Reading
Recent selections from around the web that, we think, would have caught Peter Drucker’s eye:
1. A Step Back From the Brink?: Developments in Ukraine are unfolding almost faster than we can follow, but easily overlooked amid fleeing presidents and factional struggles is an underlying economic calamity. The nation might need tens of billions of dollars in bailouts in order to avoid default. The Institute of International Finance offers a closer examination of Ukraine’s economic travails in a paper by Ondrej Schneider and Lubo Mitov. The authors offer this warning: “Risks of prolonged political uncertainty still remain substantial . . . raising odds of delays in implementing reforms with potentially disastrous consequences for financial stability and growth.”
2. Poking the Eurozone Bear: As Ukrainians attempt to make sense of where they are going next, the Eurozone faces problems of its own. Economist Brigitte Granville suggests in Project Syndicate that the current approach appears to be the equivalent of playing dead and hoping that the bear—perilous economic fundamentals—goes away. But, she argues, either the Eurozone picks “sovereign-debt mutualization through Eurobonds, and thus the elimination of eurozone countries’ fiscal sovereignty,” or it must prepare for debt defaults from Italy, Spain and France. Currency unions have broken up before: “When the economic costs and divergences become too much of a threat, the political will to do what it takes to ensure the common currency’s survival collapses.”
3. The President and the Paupers: College costs too much. And university presidents, at least in the opinion of a number of Americans, earn too much, especially in proportion to the lowest-paid university employees. For that reason, according to Inside Higher Ed, the Faculty Senate of St. Mary’s College of Maryland is considering taking the following proposal to the school’s board of trustees: to cap the salary of the president at a maximum of 10 times the salary of staffers who are paid least. That wouldn’t mean a huge adjustment at St. Mary’s, but at other schools, like Vanderbilt University, such a rule would be pretty dramatic in its effects: “President Nicholas Zeppos [of Vanderbilt] makes about $1 million a year in salary and bonuses. Some cafeteria workers, who don’t work during the summer, have complained they make only $16,500 a year—or 61 times less than Zeppos.”
4. Comcast and Netflix Reach Deal on Service: The New York Times calls it a “milestone in the history of the Internet.” Netflix has agreed to pay Comcast for faster and more reliable access to Comcast subscribers. It will make Comcast the cable provider to nearly a third of American homes and the high-speed Internet provider for nearly 40%. The implications are still being hotly debated. The Times notes, “One fear is that if such deals become common, only the wealthiest content companies will be able to afford to pay for them, which could stifle the next Netflix from ever getting off the ground.