Author: Robert Toews

Stanford’s Graduate School of Business ranked first among business schools nationwide in post-graduation satisfaction among alumni, according to a recent survey by Forbes. University of Pennsylvania’s Wharton School and the University of Chicago’s Booth School rounded out the top three.

Of the MBA class of 2004, 17,000 graduates from 103 of the premier business schools in the country took part in the survey, which asked participants about satisfaction with their current jobs, their MBA education and how well their business school prepared them for the job market.

Five of the schools ranked in the Forbes satisfaction survey also show up in the overall top ten of the Forbes best business schools ranking.

Stanford was also the top-ranked business school program in the category of returns on graduates’ investments. Students had a median salary of $82,000 before entering the GSB and a median salary five years after graduation of $225,000, highest among all U.S. business schools.

Two GSB alumni who remain associated with the school attributed the ranking to what they saw as several unique aspects of the school’s character.

“[Stanford’s] GSB’s size and culture are unique competitive advantages that meaningfully contribute to alumni satisfaction,” said Pulin Sanghvi, who graduated from the GSB in 1997 and now serves as its director of career management.

“The school creates a tight-knit community with strong ties between students, faculty and alumni,” he said, adding that the small student body size<\p>roughly half that of other top schools<\p>–<\p>allowed students to interact closely with faculty and “get to know all their classmates by graduation.”

Jennifer Aaker, who teaches marketing at the GSB and graduated from the school in 1995, said the experience at the school benefited from the mentality of its student body.

“Stanford brings together a group of people that are in general more idealistic and more effect-driven,” Aaker said.

Current students seemed equally satisfied with the GSB experience.

“The atmosphere is great,” said Nadya Malenko, who is currently a Ph.D. student in finance at Stanford and frequently takes classes at the GSB. “The faculty members are very responsive to students and are always willing to help, and it is a pleasure to attend their seminars.”

The school’s diversity, Sanghvi said, was also a strength, with a third of the student body composed of international students, representing more than 50 countries.

“My own class included managers, consultants and entrepreneurs, but it also included an Olympic swimmer and a shrimp farmer from Ecuador,” Sanghvi said.

“Students spend two years at the GSB believing that anything is possible in their careers,” Sanghvi added.

Speaking on the elimination of nuclear weapons worldwide, former U.S. Secretary of State George Shultz (middle), physicist Sidney Drell (right) and moderator Phil Taubman '71 (left) addressed a packed audience in Tressider Memorial Union on Monday at and event hosted by Stanford's Center for International Security and Cooperation (CISAC). (ARNAV MOUDGIL/Staff Photographer)

Former Secretary of State George Shultz calls for ‘hard-boiled democracy’ toward Iran

In front of a packed audience in Tresidder Memorial Union yesterday, former U.S. Secretary of State George Shultz and renowned physicist Sidney Drell spoke about the dangers of nuclear proliferation and their joint efforts to rid the world of nuclear weapons.

The event was organized by Stanford’s Center for International Security and Cooperation (CISAC) and moderated by Phil Taubman ’71, former Daily editor in chief and Washington bureau chief of The New York Times.

Shultz and Drell have been working with former Secretary of State Henry Kissinger, former Secretary of Defense William Perry and former U.S. Senator Sam Nunn for several years to encourage international governments to reduce and eventually eliminate their nuclear arsenals.

Shultz explained the motivation for his efforts by sharing an anecdote that took place during his years as Secretary of State under President Reagan.

“In one of our private one-on-one meetings one evening, [Reagan] said, ‘Not since Britain burned down the White House in 1814 has our national security been so directly threatened as it is now, by the existence of nuclear weapons,’” Shultz said. “We decided if we could just get rid of them, the world would be a much safer place.”

Prof. Drell spoke at length about the international landscape of current nuclear proliferation policy, emphasizing the urgency of the need to fight the spread of nuclear weapons.

“One huge difference between the Cold War days and today is that there are no longer just the two superpowers, but rather, we are in a world where many more countries possess the know-how to create nuclear weaponry,” Drell said. “We are seeing that with North Korea and Iran. What we end up with is an extremely unstable situation that we should not be comfortable with going forward.”

One of the most prominent themes that ran throughout the two men’s commentary was the necessity – and difficulty – of coming up with specific tenable strategies to prevent the spread of nuclear weapons.

“It is all fine and well to say that you want to rid the world of nukes, but how do you do it?” Shultz asked. “In a sense, the battle of rhetoric has been won… almost everyone agrees that getting rid of nuclear weapons is a good thing. But now the battle of action is in front of you… North Korea has nuclear weapons, Iran wants them and there is seemingly very little we can do about it. How do we handle these countries?”

Much of the discussion focused specifically on Iran. The country has a nuclear development program in place but states that its uranium enrichment facilities are intended only to provide nuclear energy to civilians. Because of this, the Iranian government has resisted international pressure to shut down these facilities.

Shultz addressed this issue in an interview with The Daily.

“Anyone who thinks Iran is enriching uranium for energy purposes needs to have their head checked,” Shultz said. “Why would a country with all the oil in the world need a nuclear power plant? They are clearly trying to achieve nuclear power, and the time has come for them to be stopped.”

The former Secretary of State called for “hard-boiled diplomacy” in America’s policies toward Iran, calling the country an “illegitimate state” under the current administration. He even suggested that naval officers should have the authority to attack Iranians who approach American ships in the Persian Gulf.

Shultz also expressed skepticism at the alternative of allowing nations to maintain nuclear weaponry and rely on deterrence and mutually assured destruction to preserve world peace, as during the Cold War.

“As more and more countries have nuclear weapons, and more people know how to make them, there’s more fissile material lying around,” Shultz said in response to a question from the audience. “Parties might get hold of nuclear weapons who simply are not deterrable – who want to use them.”

Drell spoke positively of the policies and attitudes of the Obama administration on the question of international nuclear policy. He stressed that the issue was a non-partisan one, transcending political parties and affecting all humans equally. He also, however, dwelled on challenges that lay ahead for the current administration and called for more specific objectives and policy aims from the president.

“The challenge that the administration faces is articulating a policy that makes clear what we want to do, what we don’t want to do and what kind of steps we want to take to get there,” Drell said. “Be it specific kinds of reductions, comprehensive test bans, controlling the nuclear fuel cycle or what have you, step by step we need to create a new culture where these things are clarified and prioritized.”

Over a distinguished career, Shultz has served as professor of economics at MIT and University of Chicago, Secretary of the Treasury under President Nixon, president of Bechtel Corporation and Secretary of State under President Reagan. He is currently a distinguished fellow at Stanford’s Hoover Institution.

Drell is a professor emeritus at the SLAC National Accelerator Laboratory and a senior fellow at the Hoover Institution. He is a noted theoretical physicist and has won numerous awards in recognition of his achievements, including the prestigious Enrico Fermi award.

The audience seemed generally stimulated by the talk and wowed by the speakers’ combined experience in the field.

“The fact that Mr. Shultz was there in the highest reaches of American government throughout the Cold War, in the conference rooms and on the phone with presidents literally shaping American nuclear policy, lends so much credibility to his opinions on the matter and makes it fascinating to hear what he has to say,” said Kelsey King ’11, a comparative studies in race and ethnicity (CSRE) major.

Others, however, had reservations.

“Of course, it was fascinating to hear what two figures who have had decades of experience in the area of nuclear proliferation had to say,” said Stephanie Majerowicz ’10, a political science major. “Nevertheless, I left the talk feeling the speakers had not really made any concrete suggestions in terms of how to achieve their oft-mentioned goal of disarmament.”

Stanford professors featured heavily in last week’s annual conference of the American Economic Association held in Atlanta, Georgia.

The event, which took place from Jan. 3 to Jan. 5, featured presentations from many of the top minds in the field of economics, including Federal Reserve Chairman Ben Bernanke, Nobel laureates Joseph Stiglitz and Paul Krugman and Yale economics Prof. Robert Shiller.

Serving as chair of the conference’s program committee was Robert E. Hall, economics professor and senior fellow at the Hoover Institution, who is also the current president of the AEA.

“The event went very well this year,” Hall said. “We accomplished all we had hoped to. People don’t like Atlanta, but attendance was at an all-time high.”

The highlight of the event was Bernanke’s controversial speech on the causes of the housing bubble. Of central importance to the speech was the so-called Taylor rule, developed by Stanford economics Prof. John Taylor, also a senior fellow at the Hoover Institution.

In the aftermath of the collapse, some argued that the extremely low interest rates set by the Fed throughout the decade led to cheap loans and reckless lending by banks, contributing to the financial crisis. But in his speech, Bernanke argued that insufficient regulation of lenders, not overly accommodating monetary policy, was primarily responsible for the downturn.

“Stronger regulation and supervision aimed at problems with underwriting practices and lenders’ risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates,” Bernanke said in his Jan. 3 speech.

The Federal Reserve is the institution that sets interest rates, and Bernanke has served on it, first as a member of the Board of Governors and then as its chairman, for most of the decade. Bernanke’s attempt to downplay the importance of low interest rates to the financial crisis may tie to the issue of the Fed’s responsibility in the development of the crisis.

Many who disagree with Bernanke’s assessment point to the Taylor rule to support their arguments, which Bernanke acknowledged through directly addressing it in his remarks.

The Taylor rule, one of the most significant equations in macroeconomics, indicates what the interest rate should be based on current levels of inflation and GDP. Throughout the decade, the actual rate set by the Fed was significantly lower than the interest rate prescribed by the Taylor rule.

Bernanke dedicated nearly a third of his speech to a justification of this deviation. He used a modified version of the Taylor rule to attempt to demonstrate that interest rate levels were, in fact, appropriate over the past several years. His adjustments focused upon the sensitivity of many data inputs that factor into the rule, according to The Wall Street Journal, and included a shift from using actual inflation measures to forecasts of inflation.

Taylor disagreed with Bernanke’s defense of the Fed’s low rates and his modifications of the rule. “I do not agree with his proposed modification,” Taylor told The Daily. “One issue is: whose forecasts should you use? The Fed’s forecasts of inflation were too low at that time.”

Taylor also indicated worry about the policy implications of Bernanke’s speech going forward. “His speech raises the concern that the Fed will keep rates too low for too long again in the future,” Taylor said. “That would be a mistake because it would lead to another boom-bust cycle.”

Taylor, who authored the textbook used in Economics 1A, has taught at Stanford since the early 1980s, receiving several teaching prizes. He has also been active in politics throughout his career, serving as the undersecretary of the Treasury Department during Pres. George W. Bush’s first term.

Others, though, were more receptive to Bernanke’s arguments.

“I think he [Bernanke] was basically right,” Hall said. “His interpretation of the Taylor rule fits my thinking, but it disagrees somewhat with John Taylor. The question will continue to be debated.”

Another important function of the AEA conference is professional, especially for young scholars. Hundreds of new Ph.D. candidates attend the event every year to network and interview with prospective employers.

“Job listings were down 20 percent this year, but there were still lots of activity in the job market,” Hall said. “Perhaps the most important purpose of the conference is this role of bringing new Ph.D.s and employers together.”

About 15 Stanford graduate students attended the event this year.

“The event is pretty spectacular,” said Bill Komiss Ph.D. ’09. Komiss graduated from Stanford’s economics graduate department last year. He attended the event in 2009 as a new Ph.D. looking for a job, and he returned this year as a recruiter for his new employer, the Center for Naval Analysis.

“It’s a great chance to listen to research that you have been interested in and to become interested in new things,” Komiss said. “The struggle to get a job is a bit jarring. I remember having 17 interviews in a three-day span, spread across five hotels. There was not enough Starbucks coffee in San Francisco to fuel us all.”