It took my going to Wharton to realize that the MIT cheer "we are, we are, we are the engineers" applies to me. At times I feel like a fraud in the analytical classes (statistics, optimization, etc.) - it's obvious that this stuff is too easy for me; it's as if I went to a high-school algebra class. I try to balance it out by being helpful to the others who are struggling. Later, it turns out that quite a few people feel that some of these classes are too easy, our common trait being the engineering background. At other times I feel like a fraud in the "softer" management/leadership classes - I clearly don't have the experience all these folks do, can't speak as eloquently without preparation, can't come up with interesting and relevant examples from my own work, my career is nowhere near theirs - should I even be here with them? Am I adding anything to these classes? I try to balance it out by taking notes and hoping to learn from them. And yet, more than ever before, I realize that I am an engineer from head to toe, in the broad sense of the word, and that it might not be that bad, after all.
Apparently, the wage premium for education has been increases over the past 15 years, partially explaining the widening gap between the social classes.
We discussed how fiscal and monetary policy affects the economies of the world, considering the examples of the US great depression, the Asian crisis of 1997, and the Argentine devaluation of the peso in 2002 (how timely for our trip). In the US, monetary policy is done by the Fed, and the figure of Alan Greenspan is familiar to many people who have absolutely nothing to do with economics. However, Alan is not only 78 years young, but also at the end of his 14 year full term, and according to the rules he cannot be reappointed. He will have to step down in January 2006, and it is our wonderful new-old president, who will appoint his successor (with Congress's blessing). Greenspan has been such a powerful figure and has been at the post for so long that something tells me that the market might become just a bit more rugged leading up to the change of leadership, if only due to the inherent uncertainty...
Nicely linking the last two points and sealing my dislike for the professor, I present to you the most arrogant remark of the semester.
- So, who do you think will be Greenspan's successor?
- Professor, might it be yourself [he works at the Philadelphia Fed right now, so the suggestion is not a huge stretch]?
- No, I don't think I could afford the pay cut - my younger daughter graduates from college in 2008, and the chairman's salary is only $178,000.
Come on, really, can't one send one's daughter to college on *just* $178K a year??? The average salary in our class is $165K, but the median is "only" $125K, so most of us do have "suffer" on salaries under the paltry $178K that the chairman gets.
One of our classmates is a brand manager for Campbell’s soups and he did a presentation, relevant to the topic of the day - how do you allocate fixed or overhead costs between different products? But you don't want to hear about that stuff. Some interesting and consumer-relevant notes from his presentation:
* Grocery stores account for only 65% of the food products' distribution channel, down from 75% just 5 years ago, and falling further. Where is the rest of the food sold? In warehouse clubs (Costco, BJ's, Sam's Clubs), chain superstores (Wal-Mart, Target), and convenience stores.
* Food companies hate selling stuff to Wal-Mart - due to their large muscle, they are very tough in negotiations and get the best deals; yet, they end up as profitable clients nonetheless, due to volume (which is the reason for their large muscle in the first place). Warehouse clubs tend to be even worse in negotiations and then pass on the savings to consumers. Conclusion: these places really are better for food shopping, especially for non-perishables, as they do get significantly better prices from producers and are shrewd in the negotiations.