Personal attention to each student, a willingness to tailor lessons to all learning styles, and a dedication to self-improvement in the classroom are traits that earned Associate Professor of Finance Paige Fields recent recognition as the recipient of the Academy of Finance 2010 Teaching Excellence Award. This is the only international teaching award available in the discipline of finance.

Paige Fields
Fields

Fields has also been nominated for a 2010 Texas A&M Presidential Professor for Teaching Excellence Award (the highest teaching honor at the university), as well as the John Robert Gregg Award in Business Education from the National Business Education Association.

Another testament to her classroom success, she has received the Texas A&M University’s Association of Former Students Distinguished Teaching Award at the university level (2000) and at the college level (1998), and a Mays Teaching Innovation Fellowship (2004-2006); received a teaching innovation grant from Mays in 2009; received the 1996 Distinguished MBA Faculty Award; and was a Center for Teaching Excellence Montague scholar in 1997.

After 20 years in the classroom, Fields is confident in her skills, but not satisfied with the status quo. “You really don’t achieve teaching excellence. You’re always striving for teaching excellence,” she says, noting that she participates in a Faculty Learning Community on Universal Design (classroom theory that incorporates teaching to all types of learners); she takes seriously comments from her students on teacher evaluation forms; and she is constantly trying to improve her curriculum and her style of teaching by attending and presenting at workshops dedicated to the craft.

“I believe that as faculty members, we should care deeply about each student and his or her learning experiences. The faculty/student relationship should be a mentoring relationship that is based on mutual respect. We should invest sufficient time in our students so that they know that we are going the extra mile to provide them with a top-notch learning experience.”
—Excerpt from Fields’ teaching philosophy statement

After teaching the “Honors Corporate Finance I” course for 14 years, Fields recently began teaching “Corporate Finance II” for Mays undergraduates. She has completely overhauled the course to improve content, ensuring students are better prepared for the workplace. She is also the curriculum coordinator for the course, so she works with other faculty members who teach the material to maintain consistent quality across multiple sections. The course is a requirement for all finance majors, and contains information vital to their success in the program and in the professional world.

RESEARCH NOTES

Fields and colleagues (including Mays Professor of Finance and Hugh Roy Cullen Chair in Business Don Fraser) are currently examining borrowing firms’ boards of directors and board members’ individual traits, including: gender, length of service on the board, number of outside boards on which they serve, whether they are independent, whether they serve an advisory role, and whether or not they are paid for their service to the board and how much. They also examine other important governance characteristics such as ownership structure, CEO compensation, shareholder protection mechanisms, and the firm/borrower relationship. One paper on this topic, “Corporate Governance and the Perceived Value of Bank Loans,” was published in September 2008 in the Journal of Corporate Finance.

Her current work examines how the quality of a company’s board of directors influences the cost of bank loans. If a firm has board members with many years of experience or one that is employed in the same industry as the borrowing company, then they are able to borrow at a significantly lower interest rate. The same is true if the board of directors is large and is dominated by independent directors.

It’s her personal touch that makes Fields stand out as a teacher at a large institution: she makes a point of supporting her students outside of the classroom by attending their special events including athletic games or other performances.

As if that wasn’t enough, Fields is involved in research in the areas of corporate governance, banking, insurance, and capital structure. Her current work examines how the quality of a company’s board of directors influences the cost of bank loans. If a firm has board members with many years of experience or one that is employed in the same industry as the borrowing company, then they are able to borrow at a significantly lower interest rate. The same is true if the board of directors is large and is dominated by independent directors.

Her research has appeared in the Journal of Corporate Finance, Journal of Finance, the Journal of Financial and Quantitative Analysis, and the Journal of Money, Credit, and Banking.

She assumes one thing that impressed the Academy of Finance award selection committee was that she has an active research agenda and still maintains a high level of teaching quality, as the other four finalists for the award came from schools where teaching was the primary requirement.

Catagories: Faculty

Tom didn’t set out to be financially delinquent—in fact, when he signed up for his first credit card as a freshman in college, he thought he was being quite responsible by building up a credit history.

By senior year, Tom had racked up several thousand dollars in credit card debt as he charged school-related expenses and other incidentals. Tom wasn’t worried about his mounting bills, as he would soon be entering the workforce full-time.

According to an April 2009 report from SallieMae, 84 percent of college undergrads have at least one credit card. Half of the students polled had four or more cards.
According to an April 2009 report from SallieMae, 84 percent of college undergrads have at least one credit card. Half of the students polled had four or more cards.

Tom did eventually find a job after a few months of searching, during which he used credit to float by. He intended to pay down his debt, but by that time he’d become accustomed to living slightly beyond his means, filling the gap with credit and making the minimum payment each month. His debt escalated, especially as his credit card rates steadily and stealthily increased from 8 percent to 15 percent for no discernable reason.

When the economy worsened and Tom lost his job, he knew he was in trouble. The credit card company raised rates on his large existing balance to 24 percent after a missed payment. Now broke and unemployed, Tom wonders how he got to the point where bankruptcy is an attractive option.

Tom’s is a common tale in the credit-saturated U.S. society, where “enjoy it now, pay for it later,” is the favorite message of marketers. As more and more Americans slide toward financial ruin, consumer advocacy groups that for years have spoken out against abuses by the credit card companies have finally been heard. On May 22, President Obama signed the Credit Accountability, Responsibility, and Disclosure (CARD) Act of 2009 into law, which will limit or change the way credit card companies do business starting in February 2010.

Will the bill make a difference to consumers or the economy? Kelly Haws says the effect of the legislation will be significant. Haws, assistant professor of marketing at Texas A&M University’s Mays Business School, has conducted several studies on consumer use of credit. “Consumers might actually change their spending behaviors as a direct consequence of this legislation,” said Haws. “Even if it has only a minor effect, it could be huge when it comes to how people are managing their personal finances.”

More disclosure = more responsible spending?

As the U.S. economy continues to languish, people are spending less, and so like many other industries, credit card companies have been making less. This situation led some creditors to come up with creative ways to boost revenues, such as “any time, any reason” rate hikes or hidden fees (Americans pay about $15 billion each year in credit card penalty fees). The CARD Act bans certain rate increases and unfair fee traps, as well as mandating more transparency between lender and borrower. When the bill takes effect in a few months, credit card companies will be required to notify consumers of rate changes 45 days in advance of the change. Also, companies will be required to display the consequences of credit decisions to consumers in periodic statements, such as how long it will take to pay off an existing balance with interest if the consumer pays only the minimum balance.

Haws says that this kind of stipulation is potentially positive, but that many consumers don’t take the time to understand financial statements. Benefits of that component of the act may be limited if consumers disregard notices from their creditors that seem too complex.

According to a study Haws conducted, people will modify their spending behavior when given greater information about the real costs involved with using credit. However, her study involved subjects in a controlled setting, a very different environment from the one experienced by most credit card holders on a daily basis. “In the real world, there are a lot of distractions that can influence those actions,” said Haws.

Even without full comprehension of the statements they’ll receive, consumers will benefit from their new protection under the law, which will ban credit card companies from increasing rates retroactively without cause. Companies will also be severely restricted from retroactively increase rates due to late payment.

Slow down, Junior

One area of the new law both Haws and colleague Don Fraser agree will be impactful is the age restriction. “This is one of the most important dimensions of the legislation,” said Fraser, Hugh Roy Cullen Chair in Business and associate head of the department of finance at Mays.

The CARD Act will prevent credit card companies from targeting potential customers under 21. Those under 21 that want a credit card must have a co-signer on the account, or show proof of independent means.

Currently anyone over 18 can get a credit card—and many do. According to an April 2009 report from SallieMae called “How Undergraduate Students Use Credit Cards,” (download a copy here) 84 percent of college undergrads have at least one credit card. Half of the students polled had four or more cards. The study also noted that undergraduates are carrying record-high credit card balances, with the average (mean) balance of $3,173. More than 20 percent of undergrads reported credit card balances between $3,000 and $7,000.

In the past, credit card companies were allowed to market aggressively on college campuses, incentivizing their offers with promotional gifts from tee shirts to iPods. “Removing the ease of accessibility to that market could really be transformational,” says Haws. College years are formative, making it an opportune time for credit card companies to lock in a customer for life on the debt merry-go-round, as young people often lack the knowledge or analytical skills to use credit wisely. Haws notes that some college campuses already ban credit card sales reps on their premises as a protection to students. Getting parents on board as potential cosigners is beneficial, too, as past research suggests that this could help prevent debt from accumulating during college years. “Studies show that the more parents are involved, the more responsible the student’s use of the credit card is,” she said. (( Palmer, T.S., Pinto, M.B., and Parente, D.H., College Students’ Credit Card Debt and the Role of Parental Involvement: Implications for Public Policy. Journal of Public Policy and Marketing, 20(1): 105-113 (2001). ))

Drawing the legislative line

Though the CARD Act passed through the Senate with a vote of 90-5, showing overwhelming support for regulation of credit card practices, some economists wonder if it was the right thing to do. After all, if a product is bad, shouldn’t consumers stop buying it? According to a 2009 Nilson report, 78 percent of American households have at least one credit card. Clearly, consumers are still purchasing these services. The free market philosophy that the U.S. economy is built upon argues that the consumer demand will regulate the market eventually on its own, without interference from the government.

KEY EFFECTS OF THE
CREDIT ACCOUNTABILITY, RESPONSIBILITY, AND DISCLOSURE ACT OF 2009
  • Consumer protection for those under 21
  • Bans unfair rate increases, including retroactive rate increases
  • Prevents unfair fee traps
  • Plain sight /plain language disclosures
  • Accountability

“My opinion is that the legislation was badly needed, as there were numerous examples of abuses by credit card lenders. It would have been better if these changes had been made some years earlier,” said Fraser, commenting that though some consumers (likely those with the best credit practices, who pay off their balance each month) will may see an increase in rates and fees, overall consumers will be better off as a result of the legislation.

Haws agrees that the credit card reform is positive, as the consumers that are often most affected by predatory practices by credit companies are the ones who can least afford to pay, such as those with excessive debt from medical or other unforeseen expenses. “This will provide protection for consumers that are already hurting,” said Haws.

Other detractors of the bill hypothesize that this increase in regulation will lead to a tightening of the credit market, which will hamper economic recovery. “From a macro economic perspective, I would expect that the legislations will reduce the amount of consumer spending and thus increase the amount of consumer saving,” said Fraser. “In the short run, this will tend to dampen any economic recovery, but probably not to a large degree. In the long run, however, it will encourage saving, something that will be a net benefit for the economy.”

Will the legislation force an overhaul of credit card practices as companies struggle to stay profitable? What will the future of the credit industry look like? “Obviously, to the extent that the new legislation is successful in limiting or reducing the abusive practices, the credit card issuers will have to seek alternative revenue sources from their credit card customers,” said Fraser. “This is especially relevant today as the bank issuers of these credit cards are often in serious financial difficulty and in some cases on the verge of failure. They cannot tolerate significant reductions in their revenue streams.” Fraser suggested that credit card lenders may increase their average interest rates, screen out certain less profitable borrowers who may not use their cards often or who pay in full at the end of the payment period, or deny cards to those with low FICO scores, in an attempt to stay profitable.

Will rewards programs and no annual fee cards disappear under the new model as some have predicted? “I’ll believe it when I see it,” says Haws. “It’s such a competitive market that it’s unlikely they will do away with all of these programs.”

Catagories: Faculty, Featured Stories

What’s at the root of our country’s economic woes? A lack of integrity, says Michael C. Jensen, emeritus professor of business administration at Harvard University. Jensen recently presented his theories about integrity and finance to an audience of faculty and staff at Mays Business School at Texas A&M University.

Noted scholar Michael C. Jensen recently spoke to Mays faculty and staff about the relationship between integrity and finance.
Noted scholar Michael C. Jensen recently spoke to Mays faculty and staff about the relationship between integrity and finance.

Jensen’s definition of integrity is divorced from concepts of morality and ethics. Instead, Jensen says we should think about integrity more like the law of gravity; gravity is neither good nor bad, and if you attempt to violate that law, you will experience negative consequences.

“Something is in integrity if it is whole, complete and sound,” says Jensen in a summary of his presentation, “Putting Integrity into Finance: A Positive Approach.”

According to Jensen, “Integrity is closely related to workability because an entity or system that is out of integrity will not be whole, complete and sound. Workability is the bridge to value. The farther out of integrity, the less well any given entity will work.”

Jensen asked the audience to think about a wheel with broken spokes: the integrity of the wheel would be compromised, and therefore the wheel would not work. “Without integrity, nothing works,” he said.

Jensen says he sees a lack of integrity within the capital markets, where managers and CEOs are expected to manipulate financial reports. Jensen questioned how a system could function where such basic information cannot be trusted. In his theory, as integrity declines, workability declines; as workability declines, value declines as well.

“Integrity matters, not because it’s virtuous but because it creates workability,” he said. “Workability increases the opportunity for maximum performance, which is necessary for maximum value.” As an example of a lack of integrity, Jensen cited a study of employment contracts for major corporations’ CEOs; in 96 percent of these firms, Jensen says that if a CEO is fired for breach of fiduciary duty to the organization, the CEO must still be paid the full amount of his contract. “This is a system that is out of integrity,” he said, and the effects to the global marketplace are obvious.


“Without integrity, nothing works,” Jensen told the audience.

Mays Professor of Finance Don Fraser said he appreciated Jensen’s presentation. “It was an insightful way to relate his in-and-out of integrity concepts to the existing academic literature in finance. As such, it provided a new perspective on that literature,” he said.

A scholar of renown, Jensen has done pioneering work in his core field of finance, founding and serving as the first editor of the Journal of Financial Economics, one of the field’s leading journals. In his article about the performance of mutual funds in the Journal of Finance, he developed a new risk-adjusted measure of stock mutual fund performance now widely known as “Jensen’s Alpha,” a measure used throughout the financial world.

Jensen is also well known for his work on agency costs, exploring how corporate managers frequently act in their own best interests rather than in their proper role as agents of the shareholders. This opportunistic behavior can have dire implications for the marketplace.

Jensen’s scholarship has appeared in numerous publications such as American Economic Review, Journal of Law and Economics, Journal of Financial Economics, and Harvard Business Review. He has also testified widely before Congress and a number of state legislatures on proposed shareholder rights legislation, and has served on various corporate and non-profit boards of directors.

Jensen is the founder of the Social Science Research Network (SSRN), and continues to serve as chair of its parent organization. SSRN has played a major role in electronically disseminating social science research.

Catagories: Executive Speakers

A think tank comprised of faculty members from Texas A&M University’s Mays Business School recently addressed a gathering of 160 Houston-area business people on the current economic crisis. “This is the first of what I hope will be many venues we will use to bring our faculty and their expertise to touch our former students,” said Dean Jerry Strawser. The panel featured eight speakers with different areas of financial expertise addressing the causes of the crisis, its scope, and potential solutions.

The popular idea that the burst of the housing bubble was a major factor in the collapse of the U.S. financial markets is not entirely accurate, according to the panelists. The group asserted that causes for the current financial situation are many and complicated, going well beyond even the subprime mortgage debacle, to things like corporate accounting practices.

David Blackwell, Mays’ associate dean for graduate programs moderated the event. The speakers were: Mark Dotzour, chief economist for the Real Estate Center at A&M; Mary Lea McAnally, associate professor of accounting; Donald Fraser, professor of finance; Arvind Mahajan, professor of finance; Michael Gallmeyer, assistant professor of finance; Sorin Sorescu, associate professor of finance; and H. Alan Love, professor of information and operations management and of agricultural economics. Also participating was Dale A. Whitman, Fred Parks Distinguished Chair at South Texas College of Law, and professor of law and dean emeritus at the University of Missouri-Columbia.

Cause and effect

The presentation began with a recap of events in the housing market that contributed to the financial crisis. Love stated that the bubble grew between 2000 and 2006, when the average home prices in the United States rose by 90 percent. “The real estate bubble was fueled by cheap and easy money, by financial liberalization that resulted in subprime loans, the idea that housing prices wouldn’t fall…these forces put in place a situation where a small economic hiccup of any type would burst the bubble and deflate it,” he said.

A panel featuring eight Mays faculty members with differing areas of expertise discussed the current financial crisis, addressing its causes, its scope, and potential solutions.
A panel featuring eight Mays faculty members with differing areas of expertise discussed the current financial crisis, addressing its causes, its scope, and potential solutions.

Since 2006, home prices have fallen 20 percent, meaning that many banks now hold loans for far more than the homes they represent are actually worth. Love says, however, the crisis is not spread evenly across the nation,

Dotzour agreed, saying that the market in Texas remains relatively strong, despite struggles in other parts of the U.S.

The liquidity of the mortgage market between 2002-05, when interest rates were lower than at any time in history, created extreme home price inflation during that period, said Whitman. The flip side of that coin is that this year in California, Nevada, and Florida, the rate of home price decline is greater than 10 percent. In many other states, prices are declining at a slightly slower rate. No state is showing positive growth beyond five percent. This raises the question, which came first, the collapse of the housing market, or the beginnings of the overall financial crisis? Whitman says they are intertwined. Currently, the downturn in the housing market is worsened by the recession and its consequent illiquidity of finances, tighter credit standards, and high rate of defaults and foreclosures flooding the market.

Gallmeyer brought clarity to the issue of credit default swaps and the decline of insurance giant AIG, explaining that banks purchased insurance on a variety of collateralized debt obligations (CDOs) including some containing subprime mortgages. That way if the borrowers defaulted, the lender calls in the insurance policy and doesn’t lose any money. AIG’s distress was caused by credit rating downgrades of both the securities that they had insured as well as AIG itself. This triggered a large increase in required collateral that AIG had trouble meeting. Gallmeyer said that AIG, along with many other entities in the financial markets, were not giving due diligence to these issues before they exploded in the current economic morass.

McAnally agreed with Gallmeyer, saying the credit default swaps, “took the monitoring away from the loan.” Formerly, one bank would be involved in a loan transaction. Today, different entities arrange the loan, make the loan, and buy and manage the loan. This fracturing of the process causes confusion about the value of the asset. McAnally reminded the audience that reliable, verifiable, and relevant accounting is important for evaluation of performance and valuation. The way these loans were recorded on the balance sheet was sometimes misleading, said McAnally, adding there needs to be better regulation in the way those items are categorized. “Accounting rules are not strong enough to understand the full risk of some of these financial instruments.”

This problem goes far beyond the borders of the United States, said Mahajan and Sorescu, who touched on the international impact of the financial crisis. The International Monetary Fund predicts that next year’s growth is going to be negative, reports Mahajan, adding there has been a uniform reduction in interest rates globally. Moreover, developing countries that rely on exports for a majority of their economy have been hit especially hard as American and European markets have declined. “Things are going to get worse before they get better,” said Sorescu.

Where we go from here

Moving forward is tricky agree the panelists, and fully understanding the causes of the crisis is imperative to solving the problem and preventing future ones. Gallmeyer reminded the audience that the government’s rescue plan is still in its infancy. “Basically we’ve taken the financial system and walked it into the emergency room and we’ve stabilized it,” he said. “We haven’t done anything else to the financial system yet. We haven’t addressed the deeper problems that are in the financial system. And there’s a long list. And until we sort out some of these issues, we’re going to face a great deal of volatility.”

Over 150 business leaders from the Houston area attended the panel discussion.
Over 150 business leaders from the Houston area attended the panel discussion.

Though Americans are familiar with the price tag on the U.S. financial bailout, McAnally says in truth it could get a lot more expensive than $700 billion. However, “with some clever planning, the government could actually even come out not so far behind,” she said, if things are handled well. She suggested that standardization must occur in the credit default swap market to defer future risk.

Sorescu recommended that in the future more regulation is needed for investors to understand their complex commodities and to punish those who manipulate securities. “I fully anticipate that there will be significant effort on the part of the government to try to bring some sort of clarification to these marketplaces, not just here but worldwide,” he said. Mahajan added that better risk assessment tools must be created so that future crises can be averted.

There is culpability at a federal level, said Love, who reminded the audience that many of the problems we’re now facing aren’t new. “We’ve learned these lessons already,” he said. The panel discussed the mistake the government made in repealing the Glass-Steagall Act, enacted after the Great Depression to regulate risk by preventing investment and commercial banks from mingling. The act was modified in 1999.

Some still question whether or not the bailout was the best way to approach the crisis. Fraser commented on the illogic of the bailout, which he says incentivizes taking on more risk that you can handle. Essentially, if you protect people from their risk, they take more risk, he said. In the long run, it can be a problem. However, in the short run, it’s necessary. Mahajan agreed, saying that at this junction the bailout is necessary to stop the bleeding.

The response from the audience was positive. “The faculty…presented an understandable, comprehensive, and unbiased look at the structural underpinnings of the current economic crisis,” said Jason Armenta, a vice president with the Calpine Corporation and a current A&M EMBA student. “As a finance professional, it was one of the best I’ve seen.”

“I felt the presentation was very timely, as most Americans do not understand the gravity of this worldwide financial crisis,” said Jay Wendell, chairman and founder of J.M. Wendell, LLC and Southern Mark Homes, LLC. Wendell is an ’08 graduate of the A&M EMBA program. “The more we discuss and disseminate this information, the closer we are to formulating an exit strategy out of this dilemma. My take-away is that this crisis will not be resolved by the U.S. alone, but the world leaders must come together in a united front.”

About the Texas A&M Executive MBA Program

The Texas A&M Executive MBA Program, delivered by Mays Business School faculty, equips today’s working leaders with the skills and knowledge they need to excel in a rapidly changing organizational environment. Based in The Woodlands just north of Houston, the unique program is built around an ongoing study of how value is created in all aspects of an organization’s operations. Peer discussion and real-world case studies replace the typical lecture-driven classroom format. The result is a highly interactive learning environment that provides each participant with knowledge they can put to work immediately. The 18-month program begins a new class each August. For more information, please contact the Texas A&M Executive MBA office at emba@tamu.edu.

Catagories: Faculty, Featured Stories, Programs

Clustered around two TV screens hanging from the wall of a local burger joint, a group of students watches the election results pour in from across the country on November 4.

Students in Len Bierman's class gathered on election night to track the election returns as they came in.
Students in Len Bierman’s class gathered on election night to track the election returns as they came in.

As they compare the coverage from Fox News on the left and CNN on the right, they discuss issues in the individual swing states with more depth than your average undergrad: Will the failing economy in Ohio land the all-important state in the Obama camp? Or will racial prejudice in the state’s large, rural population deliver the vote to McCain? Will the Yucca Mountain proposal, which would bring millions of dollars as well as tons of radioactive waste to Nevada, be attractive enough to residents to keep the state red?

Nearby, two other students share a table as they discuss the candidates. One student, a Muslim and a Democrat, originally from Pakistan; the other, a Texan, a Christian chaplain in the Corps of Cadets, and a staunch Republican. With total respect, they express very different ideals for the country.

“Americans need to unite against poverty and domestic injustices,” affirms the first.

“We need to have safety and security before we can fix anything else,” says the second. Both watch the screens, wondering which opinion would carry the night’s election.

For a group of 24 upperclassmen at Mays Business School at Texas A&M University, the 2008 election was filled with more political dialogue than most, thanks to an innovative class taught by Management Professor Len Bierman called “Business Issues and the 2008 Presidential Election.” According to Bierman, the purpose of the once-weekly upper division class was to get students talking about issues they may not have considered when it comes to the intersection of money and politics. “Rarely are things black and white in this arena,” he said. “Even on extreme issues, there are shades of gray. Things are more subtle and complicated than you might think on first blush.”

Rhetoric and dialogue

One thing that set this class apart, said class member Miguel Abugattas, a senior finance major, was its “Ivy League” format. “This class wasn’t about scantrons and textbooks,” he said, but about reading up on a current topic and exploring it through debate. Bierman assigned no textbook for the class, instead asking students to subscribe to the Wall Street Journal and read it everyday to keep informed.  Several of the class periods featured guest lectures from experts in fields such as national security and education funding, who provided students with an insider look at the issues.


“Rarely are things black and white in this arena,” says Mays Professor Len Bierman. “Even on extreme issues, there are shades of gray. Things are more subtle and complicated than you might think on first blush.”

The discussion and debate style of the class was important to Bierman, who says his objective was simply to get students to see both sides of the two-party coin. Class assignments forced students to research and examine issues from all angles.  Through written assignments and oral presentations, students were challenged to think critically about issues such as energy, tax policy, healthcare, transportation infrastructure, and communication regulation. “There aren’t any easy solutions to these kinds of problems,” Bierman told students. The remedies to the nation’s problems students proposed will likely never end up before Congress, however, Bierman said that more than anything else, he hopes the class has turned them into more informed citizens.

Bierman noted that the class has also been writing intensive, with each student writing two individual and two group papers. Bierman teamed with the Mays Center for Effective Communication to grade these papers so that students received both feedback on content as well as style and grammatical concerns.

Class discussions focused on the most timely of public policy issues. While the subprime mortgage crisis was in the news daily and investment banks were disappearing, Mays Professor of Finance Don Fraser paid a visit to Bierman’s class to cut through the jargon and explain the state of the economy to students in a guest lecture. Similarly, Tom Saving, director of the Private Enterprise Research Center and a distinguished professor of economics at A&M, spoke to students about the looming problem of Medicare and Social Security, which, if left unchecked, will bankrupt the government in 50 years. As they explored the topics, students asked both professors: How did we get here? Who’s responsible? And what is to be done?

One of the most provocative lessons was from Jim Olson, former CIA operative and current professor at the George Bush School of Government and Public Service. Olson asked students to consider the importance of a well-funded intelligence network, giving examples from the news and from his own 30-year career in espionage. “We are going to be hit again,” he said, in reference to the 9/11 attacks, telling students that sufficient funding for intelligence is essential to national security. “Innocent American lives are stake.”

Olson’s lecture resonated with Jordan Allen, a senior marketing major from Mesquite, Texas. The most important issue in this election for her was national security; Olson’s lecture reinforced her support of John McCain. She says that she feels young people are often ignorant about what candidates really stand for. “People tend to blame who ever is in control when things aren’t going well,” she said. “This class opened up my eyes.”

Swing vote

When guests weren’t presenting, Bierman turned the tables on the students and had them teaching each other. He broke the class into six work groups and tasked each one to present on a swing state, providing their classmates with a comprehensive picture of which issues would be important when it came to capturing that state’s electoral votes. Looking at demographics, local legislation, voting history, and current statewide events, students predicted (with a high degree of accuracy) which party would win Missouri, Florida, Ohio, Virginia, Colorado, and Nevada. Elise Hilgemeier, a senior finance major, says she was most interested this assignment, which helped her to understand how issues specific to one geographic region can impact the entire nation. This type of research kept her involved in the political race, said Hilgemeier.

CLASS BLOG
  • To read a blog from a participant in Bierman’s Business Issues and the 2008 Presidential Election class, click here.

“I was kind of disillusioned with this election,” she said. “I don’t think I would have kept up with it if not for this class.”

Classmate Kaylee Heathcott said Bierman’s class got her more involved as well. “I’ve always had a shallow party affiliation,” she said. After examining issues more thoroughly from both sides, she’s made up her mind. “Now I’m not just a Republican because my parents are.” Heathcott, a senior management major, said that this election had special significance for her and her classmates most of whom are nearing graduation. “For the first time, we are voting about issues that are going to directly affect us in the workplace,” she said.

Like Heathcott, Shez Ismail, a senior marketing student, says this election and the class has helped him to realize his role in politics and society. When he and his classmates graduate, he acknowledges that they will have a special obligation due to their education. “As business people, we are hopefully going to be doing pretty well. It’s our responsibility to look out for others with the wealth we will create,” he says, citing his support of the Democratic Party.

Catagories: Featured Stories, Students