The Gould Standard Fall 2016

THE GOULD STANDARD DECEMBER 2016 ISSUE 1, VOL 6

WWW.THEGOULDSTANDARD.COM UNDERGRADUATE COLLEGE

The Airbnb vs. New York City Debate

Post-Election: The Longer Version of a Facebook Post I Wrote

The Rise of the Gaming Industry

MARKETS

OPINION

FEATURES

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Fireside Chat with Valuation Guru

Aswath Damodaran

Source: Fernando Nogueira da Costa's Blog

Devyani Nijhawan and Sanchit Kumar

Professor Damodaran discusses his passion for valuation and teaching, along with helping people across industries and countries value companies (and much more)

So What Does Stern Student Council Actually Do? STUDENT LIFE

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A Day in the Life “I am ver y much a creature of routine.

Here, for instance, was a typical Monday this semester.”

5:30AM - Wake up and run 4 miles (side note: he runs 360/365 days) 7:30AM - Take the train from New Jersey 8:45AM - Get into work 9:15AM - Answer emails: “Every morning and evening, I spend 45 minutes answering emails. I get about 250 emails a day, 80% of which are not from students but from people around the world. One minute I spend answering a Saudi analyst’s question about what risk-free rate he should use probably saves his team two and a half hours of debate and discussion.”

10:00AM - Prepare for class 10:30AM to 12:00PM - Teach 12:15PM - S end a follow-up email to students with a class summary and checkyour-understanding quiz 12:15PM to 4:00PM - Day dream, tweak stuff, and eat bon-bons

Class of 2018

ll When January 23rd comes around next year, 280 juniors and seniors will be flocking to Paulson Auditorium to attend Professor Aswath Damodaran’s ‘Equity Valuation’ class, while more than 25 others will be anxiously anticipating to get off the waitlist and into the course. The course, in Damodaran’s words, aims to teach how to “separate fact from fiction, sense from nonsense, and real analysis from sales pitch in equity research reports, valuations, and general discourse.”

A Stern veteran who joined the school in 1986 and a valuation pundit who is hailed and revered across the globe for his finance knowledge, Damodaran has authored eleven books on equity valuation, corporate finance, an d p or t fol i o m an age m e nt . In a d d it i on to being the youngest recipient of NYU’s University-wide Distinguished Teaching Award, he has also been awarded the Stern School of Business Excellence in Teaching Award by eight graduating classes. Moreover, he was named the most popular business school professor in the United States in a poll of MBA students conducted by Business Week in 2011.

Describing himself as a teacher first, he is admired by both students and professors alike.Charles Murphy, one of Stern’s most eminent Finance professors renowned for h is ‘F i nanc i a l S e r v i c e Indust r y ’ c ou rs e, des cr ib es him as “t he Michael Jordan of professors.” Further, David Perkal, a professor in the Accounting department famous for his ‘Financial Modeling & Analysis’ course, says, “Professor Damodaran is the preeminent profe s s or of an d fore m o s t aut h or it y on corporate finance and valuation. As a full-

time MBA student at Stern in the late 1990's, I was fortunate to have enrolled in Corporate Finance and Equity Instruments and Markets, and can unequivocally assert that his impact indelibly shaped my career aspirations in the financial services industry. In fact, I base my lecture on discounted cash flow valuation on Professor Damodaran’s materials that I used as a student." Adding on to his list of admirers, Abby Lyall, a Stern junior concentrating in Finance and C omput ing & D at a S cience with a minor in Computer Science, took his Corporate Finance class and said, “I liked his unconventional teaching style and admire how he has made a name for himself in the world of valuation by using simple reasoning and common sense. Many people fall into the trap of relying too heavily on traditional valuation methods, such as DCFs, without thinking critically about them – being skeptical is one of the most valuable lessons I learned from Professor Damodaran’s course.”

The Gould Standard sat down with Professor Damodaran to get an inside scoop from the valuation guru himself.

What motivated you to pursue a career in teaching versus another career?

“I like to be my own boss. Yes, I could be a banker or an equity research analyst; there are other people who are better suited than I am to those fields. But, I was given a gift to teach, which gives me an inherent advantage in the classroom. Essentially, we all want to make a difference, impacting the way people live or think. In my own small way, I believe I can make the biggest difference in the classroom.

I focus on impacting one person at a time – It’s all about incremental change that adds up and ripples out. People say they want to change

the world, and they get frustrated because the world is a big place. Dream smaller and once you find what you like doing, while helping a few people along the way, changing the world will take care of itself.”

Can you tell us about a time when you were surprised by an event?

“I am surprised all the time. It is what makes what I do interesting. For example, when Facebook went public, I valued it at $30 per share. I assumed Facebook to be a Google wanna-be. I used revenues similar to Google’s for the first 10 years, and I arrived at this conclusion. However, every time Facebook has come up with an earnings report, the company has created contradictory evidence to my story. They seem to be expanding their vision as a business, and I could choose to ignore it. But as they got more successful with mobile and consumers began spending more and more time on Facebook, I revisited my story. So at the start of this year, I explained how I was wrong before and this version is my new story for Facebook. It does not mean I got it right this time but I will have a chance to revisit it again. Ever y valuation I do is in-process and never quite done. Finding excuses does not make your mistakes go away.

Reframing my story is my response. I valued Apple 28 times in the past 6 years. I call it ‘keeping the feedback loop open’.”

What piqued your interest in valuation?

“Valuation brings together a lot of things.

I’m a natural numbers person. I love telling stories. As a teacher, storytelling is part of your craft. Recently, I got an email from a wildlife enthusiast in South Africa who is trying to attach a value to a rhinoceros because he wants to understand how much to fine someone who

kills a rhinoceros. I thought to myself, ‘How do you value a rhinoceros?’ The rest of this week as I am on my morning run, I will think about how to value a species. Valuation connects the dots and gets away from the laziness that is so common to business and people sounding good. When someone throws in a buzzword (such as ‘synergies’), you question what does that mean?”

Do you have any advice for students?

“Be yourself ! Especially at business school, people are going to school and taking classes because you are told to plan ahead. You are told to work backwards, to start with the job you want to have and constructing an education that will get you there. All too often in business school, the answer is ‘I want an Investment Banking or Consulting Job and accordingly fill my resume’. Not only is that a ver y bad way to structure an education but it is an incredibly dangerous way to plan your life.

Who knows what 4 years from now will bring?

Will investment banking or consulting even exist? The way I view this education is you came to learn. Your test for taking a class is not whether it is easy but whether you could have learned the material on your own, which means taking classes that appeal to your weak side and not your strong one. This approach may be in direct conflict with your investment banking path as it may affect your grades. But you need to understand that this is a world in which you are going to be judged based on what sets you apart from the rest. Think how you can create a unique combination of who you are as a person, your life story, and what you learned in school to bring something to the table that no one else does.”

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The Airbnb vs.

New York City debate: Who is Responsible for Illegal Rentals?

Source: Airbnb

Lauren Tai

Class of 2017

ll On October 21, just hours after Governor of New York State Andrew Cuomo signed legislation imposing hefty fines on those who post illegal short-term rentals online to Airbnb, the peer-topeer online community marketplace company sued, refuting the law for being unconstitutional and a violation of freedom of speech. This lawsuit is not unique, however, falling in line with those recently filed against San Francisco and Santa Monica, California, for similarly imposing laws to fine the company for listings published on its platform which the cities claim were illegal.

The New York law makes it illegal to advertise rentals for homes or apartment units for less than 30 days when the host is not present, even if it is the hosts' primary residence. Hosts who break the rule could be fined anywhere between $1,000 to $7,500, while Airbnb itself could face penalties of up to $1,000 per violation.

Airbnb claims that the law violates the Communications Decency Act, which frees Internet companies of liability over content uploaded by their users. The company stated that the law would “hold Airbnb liable for the content of rental listings created and posted by third-parties on Airbnb’s platform” whereas the act states that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” In its suit against the state’s attorney general and city mayor, Airbnb claimed that the law “is a content-based restriction on advertisements, in the form of rental listings, which are protected under the First Amendment.”

The company also states that it already advises its hosts and guests to be aware of and comply with local laws in listing and renting, as a disclaimer for the platform not being responsible if hosts are

found to be violating laws. However, with this new law, Airbnb could potentially, without due process, be held liable for listings posted by renters who might not even be aware they are breaking the law.

Since Airbnb is simply the platform over which hosts and guests can connect, holding Airbnb liable for host posts and in turn making Airbnb screen each host for potential criminal violation would thus be unreasonably burdensome in the company’s eyes, a responsibility it should not have to take on as an open Internet platform.

As the largest rental market in the country, with 46,000 hosts who posted listings as of October 1 for New York, the city faces opinions from all its stakeholders. While supporters see Airbnb as a catalyst for entrepreneurship in providing efficiency and convenience to renters, others see it as a threat to safety, and a contributor to the skyrocketing of rents and the deterioration of communities. Regulators and advocates of affordable housing see Airbnb as providing an incentive for people to illegally rent out apartment units to short-term travelers.

This in turn hurts the real estate market by taking units off the market for long-term residents and driving housing prices higher. Airbnb has been called out by regulators for exacerbating the New York housing crisis, as landlords have been found to push out their lowerincome tenants in order to rent out the units on Airbnb. In a report published by the New York State Office of the Attorney General Eric T. Schneiderman investigating Airbnb’s impact on the city, nearly 72% of the listings for New York were found to be made in violation of the state’s law while Airbnb was estimated to collect $282 million from those short-term bookings. In addition, the report found that 37% of revenue generated by Airbnb hosts came from hosts who had over three or more listings. Though Airbnb has proposed putting a

one property limit for hosts, regulators say the company needs do more to prevent illegal listings from being advertised.

Since its founding in 2008, Airbnb has struggled with rental regulations all over the world. Though the company has grown to help rent out over one million rooms in over 190 countries, it still faces battles when it comes to facing rentals laws that do not particularly address short-term accommodations in spaces meant for permanent residents. In seeking to grow its user base, Airbnb takes firm stances where it can it order to protect its hosts, in the hopes of increasing its rental offerings and helping middle-class citizens increase their income. However, with the discovery of more hosts renting short-term stays or hotel-like services in residential buildings, and facing pressure from other residents, New York city is increasingly cracking down on Airbnb postings that it considers illegal.

With its $30 billion valuation, Airbnb claims that its platform encourages tourism by offering rentals of unoccupied space at prices less than those charged by hotels, and allows homeowners the opportunity of additional revenue streams. As the company is also disputing legislation in Amsterdam and Barcelona, which also fines hosts who list illegal rentals, and in Berlin, which has outlawed most short-term rentals, the outcome of Airbnb’s lawsuits has the potential of changing Airbnb's overall business model.

Though Airbnb recently dropped its lawsuit against New York, the question remains of whether Airbnb will start doing more to monitor and eliminate listings that violate local laws, or else face action from city governments.

EpiPen Price Hike and Controversies Over Pricing Power in the Pharmaceutical Industry Pooja Narayanan Class of 2019

ll Mylan, a global pharmaceutical company, has recently faced intense scrutiny over the significant price increase of its life-saving drug, the EpiPen Auto-Injector. EpiPen is an allergy injection that keeps anaphylactic shock, a severe allergic reaction, at bay. It administers epinephrine, which keeps airways in the lungs open. Over the last eight years, the price of the EpiPen Auto-Injector two-pack has increased by 500 percent, from $100 in 2008 to $600 in 2016.

Though an EpiPen two-pack costs $600, each EpiPen only contains one dollar worth of adrenaline. Mylan CEO Heather Bresch justified the price increase by arguing that the company has to pay distributors, pharmacy benefit managers, and insurance companies. According to Mylan, in 2015, 80 percent of commercially-insured people using the My EpiPen Savings Card did not have to pay for an EpiPen. Additionally, over 700,000 EpiPens have been distributed to American schools at no cost since 2012.

According to Bresch, Mylan only makes a $50 profit on each pen after factoring in discounts and rebates required by insurers. However, the Wall Street Journal reported that Mylan reduced its calculation of profits by factoring a tax impact of 37.5 percent, though the company’s effective tax rate was 7.4 percent in 2015 and 4.2 percent in 2014. Therefore, realized profits are likely much higher than Mylan’s calculations.

The scrutiny follows the recent investigations of Turing Pharma-

ceuticals and Valeant Pharmaceuticals for raising the prices of life-saving drugs. Turing Pharmaceuticals raised the price of Daparim, a drug used to treat HIV/AIDS patients, from $13.50 a tablet to $750 a tablet. Former Turing CEO Martin Shkreli said the price reflected increased investment in research and development. However, a study published in the American Journal of Sociology and Economics found that pharmaceutical companies actually invest proportionately less into research and development. The study also showed that between 1988 and 2009, pharmaceutical companies earned profits three to 37 times the all-industry average. Therefore, price hikes on drugs are often seen as efforts to rake in more profits. However, according to a study by the Congressional Budget Office, in the pharmaceutical industry, research and development spending as a percentage of sales has increased from 12 percent in 1970 to about 20 percent in 2004.

Pharmaceutical companies have also cited the limited window of time as a reason for high prices. Patents are awarded for about 20 years, and after drug development is completed, companies only have 10 years to generate as much profit as they can to offset costs. Once generics hit the market, sales can drop up to 90 percent. However, generics have been increasing in price as well. A 2016 Government Accountability Office report revealed that around 20 percent of a basket of established generics had at least one price increase of 100 percent. Manufacturers cite a lack

EpiPen prices are up by five times since 2009 as insurers and employers continue negotiating of competition in the generic drug market for generic price increases.

Competition is influenced by the availability of resources, consolidation, and the wait for FDA approval.

Ironically, government programs also lead to higher prices. According to The Economist, the biggest customer of pharmaceutical firms in the United States is Medicare, which spent $112 billion in 2014 on medicines.

The program cannot negotiate drug prices. Additionally, doctors under Medicare are incentivized to prescribe costly drugs. So while the government expects drug prices to decrease, it has created an environment that encourage price increases.

In response to increased pressure, Mylan plans on introducing a half-price generic EpiPen that sells for $300 per two-pack, which it says will not be ready until the end of the year. Even with this price decrease, however, Mylan still holds over 90 percent of the epinephrine autoinjector market. Though generics like Adrenaclick are far cheaper, they are no match for Mylan’s intensive marketing campaigns and cannot fill prescriptions specifically for EpiPens. Therefore, until Mylan faces significant competition from other brand-name prescriptions or generics alike, the price of an EpiPen is not likely to decrease anytime soon.

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Bankers vs. Mattresses:

The New World of Negative Interest Rates Tim Udelsman Class of 2018

ll NIRP? ZIRP? ECB? BoJ? QE? It’s no doubt that the modern world of interest rates and central bank monetary policy is confusing. According to standard economic theory, manipulation of interest rates on sovereign debt allows central bankers either to stimulate economic growth or stave off potential recessions. While this has been typically the goal of monetary policy, its use today is very different than before.

Central bankers reserve the ability to alter their country’s money supply, thus raising or lowering interest rates according to changes in the macroeconomic environment. Previously, a widely-held belief prevailed that the lowest that interest rates could go to was 0%, the hypothetical lower bound. Yet, in recent years this boundary has been blurred as the European Central Bank (ECB), Bank of Japan (BoJ), and others have adopted a negative interest rate policy (NIRP).

What does this mean? With negative interest rates, banks pay to store their reserves in a central bank rather than receive interest. Thus, holding money with the country’s central authority degrades the value of assets over time. For example, a commercial bank in Europe that deposits $1 billion of customer assets through the ECB, charging a -0.4% deposit rate, will incur a $4 million charge annually.

While negative interest rates are not currently being passed onto consumers but instead being absorbed by commercial banks themselves, the rates still beg an interesting question: Why don’t banks withdraw their electronic deposits from central banks and store them in vaults to avoid fees? The answer is that the costs of withdrawing, storing, counting, moving, insuring, and etc. are greater than the costs incurred in storing them in the central bank. According to original theory, negative interest rates will incentivize commercial banks to withdraw funds from the central bank and lend to consumers, rather than incur costs to hold them with the central bank. Despite this theory, there is little proof commercial banks are adopting this strategy.

While negative interest rates may seem unprecedented, other countries have effected negative rates before. Switzerland implemented negative rates in the 1970s to counter currency appreciation while Sweden and

Denmark used the same tactics in 2009 and 2012 to counter “hot” capital inflows which originate from foreign investors and can cause economic instability. However, the difference now, is the broad scope of its usage.

To spur economic growth, the ECB initiated negative rates in 2014 while the BoJ, in a country that has been reeling from deflation and stagnant growth for decades, started in 2015.

So, where does that leave us today? Currently, over $13.4 trillion in outstanding negative yielding sovereign debt, up nearly 15% from just a few months ago, is sitting across global financial markets in the hands of institutions and investors. Central banks continue to tie up more of their countries’ wealth – the BoJ’s balance sheet has reached as far as 90% of Japan’s GDP. Meanwhile, growth across the Eurozone has remained stagnant, and Japan continues to miss its inflation targets. Criticism has been sharp - Warwick University Professor Emeritus of Political Economy Robert Skidelsky describes negative rates as “a desperate measure by governments that can think of nothing else to do.”

Despite the questionable effectiveness of NIRP, tying up such a large amount of money and artificially lowering rates to such an extent can lead to immense risks. The most prevalent risk is the possibility of another asset bubble. Warren Buffett explains that “interest rates are like gravity on asset valuations,” as rates drop stock valuations continue to be priced artificially high. Furthermore, as sovereign debt yields have been so low, investors have been piling onto higher yielding, riskier debt in search for returns. If government yields return to normal levels, investors could flee this risky debt and cause prices to collapse, creating volatility and financial damage.

Where interest rates will go and what moves central bankers will take next in an effort to jumpstart their economies are unclear. What we do know is that an enormous amount of negative yielding debt continues to grow as more money gets tied up in this experiment in monetary policy. Whether this accumulation of negative yielding debt leads to massive economic revival, a devastating economic bubble, or something in between, this unprecedented monetary policy is sure to make history.

Chart showing the range of negative yielding debt available across the Eurozone and how long the negative yielding debt can extend.

Demonetization in India: What is the Risk Reward Ratio?

Devyani Nijhawan Class of 2018

ll Imagine one day you wake up and discover that the money in your wallet holds as much value as the paper currency used in a game of Monopoly – that’s exactly what happened to India on November 8 this year when Prime Minister Narendra Modi announced the demonetization of 500 (US $7.50) and 1000 (US $15) rupee notes, the largest denomination Indian rupee bills. Accounting for a whopping 86 percent of India’s total cash in circulation, notes worth $224 billion will, in the PM’s words, be “worthless pieces of paper” starting midnight of November 8. Instead, the Reserve Bank of India (RBI), India’s central bank, has issued new 500 rupee notes along with a higher denomination 2000 (US $30) rupee note.

The rationale behind this unexpected policy decision is to curtail unaccounted money and eliminate counterfeit currency from the economy. Backed by the International Monetary Fund, this currency policy apparently promises positive long-term results but suffers from implementation issues threatening to derail the economy.

The immediate aftermath of the announcement was a liquidity crunch in the country. Ambit Capital, a Mumbai-based equity research firm, reported that 90 percent of India’s transactions in 2012 were cash-based.

So, groups that heavily rely on cash, including street vendors, small business owners, daily wage laborers, and farmers, felt the real impact of the announcement. Limits on daily exchange and withdrawal have further exacerbated people’s hardships. Moreover, many rural Indian households don’t have any kind of identification, let alone access to a bank account.

The systems in place to facilitate the exchange of currency notes have fallen far short of expectations. People have had to leave work and stand in long lines outside banks for hours to exchange old bills (imagine Black Friday for exchanging currency notes). Several complaints have arisen from citizens, including accusing banks falling short on cash and on smaller denomination notes for exchange. Moreover, two weeks after the announcement, people were still unable to access ATMs. The Indian Finance Minister Arun Jaitley said that the country’s 200,000 ATM machines could not be recalibrated ahead of time to “maintain secrecy” of the operation, explaining that secrecy was crucial to refrain from tipping off cash hoarders and counterfeit currency users, the main targets of this policy decision. Acknowledging people’s difficulties, the government relaxed restrictions for India’s vulnerable groups, including

farmers and small traders. And Modi, using emotional appeal, has been reiterating that the move is geared to aid India’s poor; he is pleading everyone “to make short-term sacrifices in the interest of long-term gains.”

But the big question remains whether demonetization will attain the goals it was set out to achieve? The answer is complex, and experts remain divided on the issue.

The government believes that demonetization will help erode “black money”, or untaxed wealth, currently estimated at $420 billion or 20 percent of GDP, from the economy, with Modi contending that demonetization is just the “beginning” of his fight against corruption. He cited the formation of a Special Investigation Team (SIT) on black money and mandating the disclosure of foreign bank accounts, among other efforts to tackle corruption. But pundits seem to be split into two camps. Mauro F. Guillen, a professor at the Wharton School, favors the move, saying “in the short term, it could stifle some businesses that are legal and clean, if they use cash payments” but remains optimistic saying that everyone will eventually adjust. On the other hand, Kaushik Basu, former World Bank chief economist, says that “demonetization is not good economics”, adding that “its economics is complex and the collateral damage is likely to far outstrip the benefits.” Moreover, Kunal Kumar Kundu, VP and India economist at Societe Generale, argues that cash makes up only 5 to 6 percent of India’s parallel black economy, as evidenced by tax raids, adding that “the equipped can find ways around demonetization by converting their existing cash to other assets through middle men.”

Moreover, issuance of the 2000-rupee note remains perplexing. The main premise of demonetization is to deter people from hoarding cash.

Wharton professor Mauro Guillen explains that “large-value currency is an important source of problems, such as corruption, terrorism, black money, and counterfeit currency.” He provides the example of the European Union that is permanently abolishing the 500 euro note, with its contribution to crime in recent years. Then why is India’s central bank printing an even bigger denomination bill? Experts claim that the 2000 rupee note is the central bank’s response to rising inflation in the economy. But, largely, no clear stance exists on this decision.

Furthermore, fake Indian currency notes (FICN) are increasingly being deployed by terrorist organizations, smugglers, and traffickers to finance their operations. Corroborating the risk, Financial Action Task Force, an intergovernmental policy-making body, reported in 2013 that

India came in third with 575,747 FICN in terms of number of notes reported as counterfeit by different countries. Demonetization claims to flush out this counterfeit currency that poses a serious threat to national security. While the government claims that the new notes are difficult to counterfeit with their additional security features, concerns still prevail.

Fake 2000 rupee notes have already been discovered in several parts of the country.

Financial inclusion and digitization have been pitched as added benefits of demonetization. The government’s assumption is that the 50-day deposit window for the old currency notes will compel the ‘unbanked’ to open bank accounts. Data reveals that 65 percent of India’s adult population is financially included, with literate individuals accounting for 71 percent of this number. Skeptics argue that the government has held its expectations too high, magically expecting the country’s rural poor to tackle the system with limited access to banks. Additionally, Modi is pushing for a cashless economy, urging the country’s youth or, the “Whatsapp generation”, to adopt e-banking for their daily transactions. To facilitate this transition, all online transaction fees have been waived until December 31st. Modi is trying to inspire the younger generation by putting the onus of the country's development on them.

As far as the macroeconomics are concerned, the verdict is uncertain.

Overall, the Indian economy will experience a significant disruption in the short-run. Demand for discretionary goods and services will shrink by a sizeable amount. Real estate, which is largely funded by black money, will be hit hardest until a price correction takes place, explains KV Kamath, chief of the New Development Bank of BRICS countries. Economists predict that more money in banks would cause a drop in interest rates and inflation. Manmohan Singh, India’s former PM and a highly revered economist, expects demonetization to cut 2 percent from India’s GDP. Meanwhile, the government remains optimistic about the country delivering growth at a much faster pace after the cleanse is complete in two to three quarters.

Systemic corruption today is woven into the fabric of Indian society.

Many people are frustrated and are willing to give the PM’s audacious decision a chance. It’s a gamble, to say the least, but there is indeed a riskreturn tradeoff. Whether demonetization will hit a grand slam or result in an unmitigated disaster, no one knows yet. Until the verdict is out, let patience be thy friend.

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Potential Marriage Between Two Agribusiness Giants NOT WITHOUT CONCERN Pooja Narayanan Class of 2019

ll The potential merger between German chemical giant Bayer and American seed and fertilizer giant Monsanto has the potential of restructuring of global agribusiness. In midSeptember, Bayer AG announced the acquisition of Monsanto for $66 billion, including $10 billion in debt, in an all-cash deal. Bayer manufactures and wholesales chemicals and pharmaceuticals, while its popular product lines include Aleve, Aspirin, and Claritin. Monsanto, on the other hand, sells agricultural products such as seeds and herbicides. Pre-market trading for Monsanto the day of the announcement was stagnant at $106 per share, while its stock faced a steady decline, indicating that investors did not believe the merger will go through.

The Bayer-Monsanto merger comes in response to a global grain surplus that has lowered crop prices, hurting farmers and reducing purchases of fertilizers. The merger will strengthen Bayer’s crop sciences division. If the deal goes through, Bayer’s cropscience sales is projected to rise to around 50 percent of revenue, compared to 30 percent in 2015. This deal also allows Bayer to expand beyond its stagnant home market. On the other hand, the acquisition will give Monsanto the ability to pursue research and development, reducing the risk of market saturation in corn and soybean producing areas by spurring innovation.

According to the press release following the announcement, the deal would lead to “significant value creation with expected annual synergies of approximately $1.5 billion after year three; plus additional synergies from integrated solutions in future years.”

Source: Bloomberg

Bayer expects significant sales and cost synergies. The merger would also diversify each company’s distribution channels.

Though the acquisition may catalyze innovations and synergies, it comes with its fair share of challenges from a regulatory standpoint. The biggest concern is oligopolistic pricing. The merged company would be the largest supplier of seeds and pesticides by sales. In addition, the Bayer-Monsanto merger is one of many deals in the global agriculture market in recent years, with others including DowChemical and DuPont, ChemChina and Syngenta, and Agrium and Potash. Approval of all these deals will consolidate and significantly reduce the giants dominating the global agribusiness market. Over 80 percent of the U.S. corn seed market would be in the hands of only a few companies, leading to a drastic reduction in competition.

The acquisition needs approval from regulators globally, including those from the US, Canada, Brazil, and the EU. However, EU regulators are anticipated to be hard-pressed to approve the move, hoping to prove they have consumers’ best interests at heart.

Margrethe Vestager, EU Antitrust Chief, said that her agency would consider the fact that all three mergers are in the same industry when investigating antitrust concerns. "We will consider the concerns you have raised over the effects of the Bayer-Monsanto merger on prices, the variety of available seed products as well as on research and development," said Vestager in an online letter.

“This consolidation wave has become a tsunami”, says Iowa Senator Charles Grassley, chairman of the Senate Judiciary

Committee, reflecting the US government’s take on the deal. Grassley also expressed concern over the pressure on farmers, who are already hurting from lower prices due to the grain surplus. Despite the prevailing skepticism, Bayer is willing to divest $1.6 billion of its business needed to pass antitrust regulations though it is not yet clear what the company will choose to divest. However, according to analysts at Sanford C. Bernstein & Co., cottonseed and canola seed herbicide assets may have to be divested to clear certain regulatory hurdles. Bayer has also explored the idea of selling its dermatology business.

The public has also expressed unease over the massive number of consolidations. Over 700,000 people have signed a petition urging the US government to reject all three acquisitions.

Andrew Kimbrell, the executive director of the Center for Food Safety, expressed worry for “the availability and genetic diversity of seeds that are critical to a sustainable food system and to our ability to respond to the impacts of climate change.” Other groups worry that the mergers would raise prices for farmers already ailing from the global grain glut. Processors and shippers will be affected as well.

The deal is expected to close at the end of 2017. If the acquisition is rejected, Bayer will have to pay Monsanto a $2 billion break-away fee. Though it is unknown how large the effects will be, it is clear that the consolidation of Bayer and Monsanto, alongside those of other agricultural behemoths, will have a profound effect on the global agricultural market.

Source: Bloomberg

Intangible Assets in GDP: Updating an Antiquated Measure Alexis Datta Class of 2020

Among the many measures that are used to measure ll an economy's performance, the most significant is Gross Domestic Product (GDP). This measure was first proposed by Dr. Simon Kuznets, who realized a correlation between growth and production in an economy. He quantified the measure with the following equation: GDP = Consumption + Investment by business + Government spending + (Exports - Imports). In the early 20th century, the GDP measure was considered a reasonably accurate measure of an economy's performance, as it factored in consumer and corporate behavior, the actions of the government, and externalities in the form of imports. However, one drawback in the equation was that only a static form of consumption was included, such as a consumer purchasing a car, or groceries. With the increasing impact of technology and intellectual property on consumption, it has been argued that the “Consumption” part of the equation is not as valid.

As a result of the dotcom bubble at the end of the 20th century, the BEA (Bureau of Economic Analysis) modified the GDP measure to account for software. Software then became

accounted for as an “Investment” in the updated model. In 2009, the BEA released another report stating that “some have suggested that investment in intangible assets now roughly equals investment in tangible assets.” This recognition has resulted in significant changes to the measurement of GDP, including what exactly can be considered as intangible assets.

Technology and Intellectual Consumerism

While the initial GDP model was created to measure the quality of life in a country, it was later modified as a result of World War II to measure the ability of a country to engage in warfare. This was largely based on a country’s tangible assets: military equipment and consumer goods. After the war ended, companies shifted focus to R&D activities as a method of differentiating themselves from competitors. This resulted in a deficiency in the GDP model as the accounting value of R&D was not included in the explicit costs of building a product. Recent changes have modified this, and R&D is now considered as a long term investment and is included under

the “Government” section of the GDP equation.

However, this does not imply that the GDP model is comprehensive. The BEA will have to continue modifying this equation in the future in order to reflect other intangible assets, such as intellectual property: patents, copyrights, designs, etc.

Innovation, the Driver of Economic Change

Most of these measures fall under the title of innovation.

The BEA gives an example in their 2009 report of the transistor, which “over 50 years ago gave rise to wave after wave of new goods that have transformed the economy…like the semiconductor.”

Innovation is a significant part of any economy, as it causes the development of these other products, but it hasn't received the recognition that it deserves. As economies develop and continue to see shifts in antiquated measurement systems, the BEA will continue to modify this computational system so that GDP will once again be used with its initial intention.

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FINANCIAL MARKETS

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With President-elect Trump, Trans-Pacific Partnership in Jeopardy Pooja Narayanan Class of 2019

ll The Trans-Pacific Partnership (TPP) is a free trade agreement that includes twelve Pacific Rim countries: the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile, and Peru. Its objective is to create a market more attractive to investment through reduced tariffs and corruption, as well as stronger protection for intellectual property. Though the TPP is intended to stimulate global trade and boost global GDP, it comes with several risks.

According to the United States government, the TPP eliminates over 18,000 tariffs on Made-in-America exports. The Obama administration touts the TPP as a better opportunity for American products to compete in the global market. With this bloc of nations responsible for 40 percent of global trade, the government also hopes to create jobs-- every $1 billion of exports supports around 5,800 jobs. However, economists from Tufts University estimated that the TPP would decrease US economic growth by around 0.5 percent over 10 years and lead to 448,000 American jobs lost.

Despite this, The TPP is expected to increase global GDP by $223 billion. Because the TPP is set to increase demand among signatories, an increase in FDI is predicted to follow for members and some nonmembers as well. According to a study by the Peterson Institute for International Economics, the United States expects to see increased FDI inflows of a little over $20 billion.

One risky feature of the TPP is that it lacks restrictions or penalties for currency manipulation. Japan, Malaysia, and Singapore have a history of manipulating their currencies. In fact, according to the Economic Policy Institute, Japan depressed the market value of the yen by 35 percent between 2012 and 2014, and Vietnam has been following closely in its footsteps. Currency manipulation has contributed to the 2 million American jobs lost as well as the rising $178 billion trade deficit between the United States and other TPP nations. The TPP is set to exacerbate this trade deficit.

Critics also view the TPP as an attempt to undermine China, a powerhouse of global trade. China has proposed the Regional Comprehensive Economic Partnership (RCEP), which includes 16 countries: the ASEAN nations and 6 other countries. Together, they

make up about 30 percent of global GDP. The agreement excludes the United States. Chinese leaders are trying to steer global trade in the direction of a China-centric future.

Many believe the agreements will complement each other.

According to United States Trade Representative Michael Froman, the TPP can become a “building block” for free trade agreements in Asia. The pacts are expected to improve rules-based trading in Asia. The two agreements may lead to a regional free trade agreement that includes the United States and China; in 2014, at the Asia-Pacific Economic Cooperation Summit in Beijing, leaders began looking into the possibility of regional free-trade agreement.

Others claim that not approving the TPP will only embolden China. Conflicts in regards to the South China Sea, have created tension between China and its Southeast Asian counterparts. The United States is also seeing a weakening relationship with the Philippines, which is increasingly following China’s lead. Despite the creation of a new defense agreement in 2014 between the United States and the Philippines, Filipino president Rodrigo Duterte has repeatedly slammed the United States and stated that the Philippines will be following China. The failure to approve and implement the TPP may only drive countries in the region away from the United States and closer to China.

Though the TPP would increase free trade and boost global GDP, it also comes with risks. The U.S. government must take measures to ensure that the agreement would not hurt the domestic economy; otherwise, it risks letting the TPP amplify the negative effects of past failed free trade agreements.

However, as the Obama administration comes to a close in preparation for President-elect Donald Trump, the White House has conceded that the TPP will not pass Congress. In January 2017, both houses of Congress will be controlled by Republican lawmakers, who have fiercely opposed TPP. Not only has Presidentelect Trump repeatedly attacked the TPP on his campaign trail, but the proposal has also faced much opposition from the public.

Despite its positives, the TPP will most likely not be ratified due to protectionist policy proposals of President-elect Trump. It remains to be seen whether this will impact United States trade relations in the future.

What is the TPP? Negotiated by the Obama Administration, the Trans-Pacific Partnership (TPP) writes the rules for global trade and is essentially a free trade deal between the US, Canada, and 10 countries in the Asia-Pacific region, including Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Mexico, Chile and Peru.

What will it do?

The TPP is seeks to strengthen economic relations between the member countries by eliminating tariffs on goods and services and standardizing regulations in order to bolster growth.

Why is it such a big deal?

The 12 member countries have a collective population of approximately 800 million, and are accountable for roughly $28 trillion of annual gross GDP that represents 40% of global GDP and almost a third of world trade. The agreement includes some of the US's biggest commercial partners.

Why does Trump oppose it?

Criticism against the TPP had been a key theme throughout his campaign, as he and those who oppose the TPP see it as a failed attempt of globalism and loss of US jobs abroad. He criticizes the Administration for failing to achieve the deal's goals and argues that the deal would result in a low growth rate for the US. He has plans to withdraw from the trade deal as soon as he is in office.

Multilevel Marketing: Though Appearing Harmless, Still Controversial Joanna Jang Class of 2020

ll Most have heard of Amway. If not, they probably have heard of either Herbalife or Nuskin. Though these companies’ products are consumed throughout the world daily, it is unlikely that anyone has seen advertisements for their products. The reason is that these companies do not advertise through traditional mass media streams. Instead, they use multi-level marketing, a special form of marketing and communication, to push their products.

According to the Federal Trade Commission (FTC), multilevel marketing, also called network marketing or direct selling, involves selling products to the public often by word-of-mouth and direct sales. Profit is derived as distributors earn commissions, not only for their own sales but also for sales made by a salesforce and the subsequent salespeople they recruit. Since distributors earn fees from the salespeople they recruit, they are continuously incentivized to invite more individuals to join. This mode of marketing has been continuously growing throughout years. In 2014, the global sales through multilevel marketing reached $182 billion.

Although multilevel marketing may seem harmless due to its as a non-forceful tactics, it remains a controversial form of marketing, as not all multilevel marketing plans are deemed legitimate. According to the FTC, if money is made based on sales to the public, then the marketing plan is legitimate. However, if the money made is based on the number of recruits and sales to them,

the marketing plan could easily fall into a pyramid scheme, which often results in participants losing money.

Companies that pursue multi-level marketing appeal to new recruits by touting their reputation and ease of turning personal profits. Most of the individuals who participate as salespeople in multilevel marketing plans consider the work as a supplementary source of income to their everyday lives. Thus, distributors lure in new people by telling them the firm does not expect them to devote a lot of time and efforts for the work.

Though multi-level marketing may seem attractive, many recruited salespeople have stated that the work ends up not as they had expected. Usually new salespeople are required to pay an upfront fee when getting into the business, which is often criticized for being too expensive. In addition, salespeople are pressured to sell products through personal connections in order to meet quotas.

In terms of law, multi-level marketing is sometimes seen as closely related to a pyramid scheme, an illegal marketing structure. In a pyramid scheme, profits are built on new recruits rather than selling products or services.

Companies that exercise multilevel marketing, however, are not necessarily all harmful. For example, Amway still possesses a lot of loyal consumers. Meanwhile, Bill Gates said in the past that “if I would be given a chance to start all over again, I would choose network marketing.” At the same time, not all companies that

exercise multi-level marketing are sound either, which is why a potential recruit should be cautious of the responsibilities required before getting involved. Though multi-level marketing is currently allowed in the US, many argue that such incentivized recruiting is an ethical violation and urge the FTC to take actions against it. While the government has some regulatory infrastructure in place, whether the government will impose even more regulation in hopes of catching multilevel marketing schemes that become illegal is yet to be seen.

Companies that exercise multilevel marketing are not necessarily harmful. Amway is a huge firm that possesses a lot of loyal consumers while Bill Gates has said in the past that “if I would be given a chance to start all over again, I would choose network marketing.” At the same time, not all multilevel companies are sound either, which is why one should be cautious of the responsibilities required before getting involved. As such, though multilevel marketing is currently allowed in the United States, many argue that incentivized recruiting is an ethical violation, urging the Federal Trade Commission to take actions against it.

Though the industry has some regulatory infrastructure in place, it is yet to be seen whether the government will impose even more regulation in order to catch multilevel marketing schemes that become illegal.

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OPINION

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Post Election: A Longer Version of a Facebook Post I Wrote Aditi Shankar Class of 2018

On Tuesday, November 8, I had a midterm. ll My professor, Manjiree Jog, commented that morning, “It’s a privilege to live in a democracy.

Use it.” She asked earnestly who in our class had the opportunity to vote, and who had done so. I raised my hand proudly, excited for what the day held for me personally. The following is a recap of my emotions in the aftermath of November 8. Full disclosure, I’ve been an intern with the Clinton campaign since February and a die-hard Clinton fan for as long as I can remember. I am not claiming to be a pundit, nor am I claiming that this loss affected my life more than anyone else’s. I am simply a millennial girl, a dreamer, an optimist, but also a realist. Here’s it goes.

At approximately 11PM on Tuesday night, I was seated on the bleachers behind the podium where Secretary Clinton was supposed to give her acceptance speech. I sat next to fellow interns on my team – we had worked countless, grueling hours together (for no pay, of course) and this was our victory night. Every single news outlet had their cameras pointed towards us. At this point, The New York Times had given Mr. Trump a 95% chance of winning. For all intents and purposes, it was over. I prayed to some gods that I, quite frankly, had never believed in. We sang Journey’s hit Don’t Stop Believin’ before campaign chairman John Podesta essentially told the public to go home and come back in the morning. There was a twinkling of hope when Podesta addressed the staff privately – he even mentioned the possibility of challenging the media’s projections for some incredibly close states.

I left the Javits Center feeling empty. I walked alongside my peers, all of us in silence, in shock. I cried

in the cab ride home. I called my dad crying before going to bed. On a larger scale, my contributions to the campaign were quite insignificant. But I was a part of it. And more than anything, I believed in it wholeheartedly.

I have been following Secretary Clinton’s career for quite some time now. I saw her as an inspiration for all women, young and old, to express their opinions, to be unafraid, to challenge the status quo. When she announced her candidacy for presidency, I was elated, and not only because this country saw another chance of electing a female president, but because the policy proposals she put forth aligned with my own beliefs.

I supported the Secretary because I believe in progressive values. Throughout this campaign, I have tried my best to separate gender and identity from policy. And ideally, that’s how we vote – based on tangible policy proposals rather than on accusations and identifications. On the surface, many Americans voted this year based on identity.

They struggled to relate with Secretary Clinton – they saw her as a liar, as conniving, as manipulative.

They saw Mr. Trump as an agent for change, as the non-establishment candidate. Regardless of my own beliefs of Mr. Trump’s bigotry and temperament, he was essentially the non-establishment candidate, and this aspect struck a chord with many Americans disenchanted with, and ultimately disenfranchised by, the American ‘system’. Pundits will spend years analyzing and theorizing the specific factors led to this massive upset. For me, however, the factor that bothers me the most about this election is the role of identity politics. And, as I previously stated, while I have always separated the individual and the policy, I cannot help but feel devastated at this loss for both

progressive policy and, mostly, for women.

I grew up with a working Mom. I also grew up with an incredibly understanding Dad. I have always had the privilege to fully express my opinions. If I could boil down this election to one personal lesson, it is that the privilege I have had to fully express these opinions was most certainly a privilege, and not a right. And I only have this privilege because of my family, community, and women who came before me.

As a ‘minority’ woman hoping to enter the policymaking sphere, I was incredibly disheartened the night of the election. For me, 2016 was finally our time to shine (I know, this line sounds like it’s straight from an an advertisement for OurTime, a dating website for seniors). How could I expect to enter this sphere at all if a woman who had dedicated her entire life to public service couldn’t achieve her dreams? As I sobbed to my dad on the phone at 3AM on November 9, I thought of the Javits Center.

I thought of the glass ceiling. And I thought of how close we came to shattering it, and how far we would be set back for not doing so. I wanted to run away from any career in politics.

I woke up the next morning still disappointed.

I dragged myself to Secretary Clinton’s concession speech, surrounding by equally somber staff members. I smiled politely while waiting in line. I felt empty. But then she spoke. And I don’t know if it was the cup of coffee I downed before the talk, or her line: “To all the women and especially the young women who put their faith in this campaign and in me, I want you to know that nothing has made me prouder than to be your champion,” but it finally hit me. And I realize this is incredibly cliché, but that stirred the fire within me once again. I wept on and off for four

hours straight. But there was optimism within me.

Maggie Hassan won her Senate seat that afternoon, against Republican incumbent Kelly Ayotte. I felt elated. And slowly, I felt the pull towards public service once again. And even stronger than I had ever felt it before.

Don’t get me wrong. I am still sad. I am sad because I am sad for Hillary. I am sad for her family. I am sad that she has worked her entire life towards something that she could not achieve.

Am I dropping everything (i.e. quitting my banking job) to enter into local politics? Probably not, but maybe someday. Will I get involved in non-profit organizations and government funded programs that promote progressive policies? Yes. And this newfound drive is because of Hillary, and because of the inspiring women (and men!) I surround myself with. And that is the beauty of American democracy – participation, love, equality, the list goes on.

This is a call for unity, for civic involvement, for public service. Regardless of our political affiliations, the current arena of both politics and policy is deeply divided. President-Elect Trump won fair and square, and his victory marks a significant shift in voter turnout based on demographics. Impassioned Facebook posts (and even op-eds like these) are simply not enough, and this election highlights the need for civic participation especially amongst those of our generation. As college students, we are sitting in the driver’s seat for the next stage of policymaking.

If we can channel our voices through tangible participation in social programs, and at every level of the government (even those seemingly random school boards), we have the power to affect change.

Be a champion for those who need it.

Vine Shutdown: What Does it Mean for Twitter?

Lauren Tai

Class of 2017

ll On October 27, Twitter announced plans to shut down its shortvideo sharing app Vine, which was popularized for its 6-second video loops. The app allowed users to capture casual moments in their everyday lives and broadcast them to friends, changing the way people went about storytelling while paving the way for countless memes and a plethora of cultural references.

Without disclosing a precise date, the company stated that the discontinuance of the video uploading feature will take place “in the coming months,” while all uploaded videos will remain preserved on the website. The announcement came in conjunction with Twitter’s overhaul of its core business as it prepares itself to be sold to potential buyers, in which it has not been so far successful as interested parties such as Disney, Google, and Salesforce have all backed out. The company also announced that it will be laying off 9 percent of its employees, about 350 people, across its sales and marketing departments in a push toward profitability. In its third-quarter letter to shareholders, Twitter stated that the restructuring, “allows us to continue to fully fund our highest priorities, while eliminating investment in non-core areas and driving greater efficiency.”

Twitter has been under pressure from shareholders and investors for a while now due to the company’s stagnant user growth and its failure to implement any significant new plans that could provide the company growth. Meanwhile, the company lost more than $500 million in 2015 and has been struggling with profitability year over year. Without a takeover in sight any time soon, this move to end Vine and cut headcount is a strong signal of a potential turnaround for the company, with a refocus on its core business and an increase in its bottom-line through cost-cutting.

Vine was bought by Twitter in October 2012 for $30 million and was the pioneer of short-form video before Instagram and Snapchat took over. While Vine had its potential in creativity and monetization, it failed to innovate beyond its core offerings and grow its user base in order to protect itself from rivals. After peaking in 2014 with X million active users, Vine reportedly had around 200 million active users in Oct 2015.

Since then, Vine usership had been on a downwards trajectory after Instagram, which introduced its video-sharing features in June 2013, and Snapchat emerged as the primary mass-market video sharing app among friends.

In addition, Vine struggled to retain its popular creators on its platform, as over half of its top 9,725 accounts either deleted their profiles or stopped posting since the start of 2016, according to research done

by Makerly. From a report by The Wall Street Journal, Vine’s stars were found to be leaving Vine for competitors like Facebook, Instagram, and

YouTube, taking their followers with them as they left.

Vine’s demise is mostly attributed to its unclear vision, failure to monetize and high rate of executives churn. While brands were once willing to pay Vine stars to create content that they could use to advertise their products to their millions of followers, they no longer saw it as a competitive platform once Instagram and Snapchat grew their base to hundreds of millions of active daily users. Whereas Instagram increased the limit on videos from 15 to 60-seconds, allowing celebrities to be promoted through the “explore” tab, and Snapchat introduced the “stories” concept, allowing users to send 10 second videos to friends privately and also broadcast publicly, Vine did not move fast enough to differentiate itself. Although Vine loosened its 6-second video limit earlier this year, it could not gain traction as Snapchat and Instagram took over as the main lifecasting apps used by people. Vine, once a leader in social video, was unable to revive itself due to its failure to add new features that could compete with its rivals, and consequently was shut down by Twitter.

Now, Twitter is stated to be refocusing on its core live streaming capabilities through its main product Periscope, in an attempt to compete with Facebook Live, and also to better leverage its streaming capabilities for events. With a new, content-heavy strategy in mind, Twitter made bold moves towards streaming by signing a deal with the National Football League to stream Thursday night games. Twitter is also looking to do the same for other sports, political events and entertainment, most recently proving it can pull off a new live stream format with its US Election special, which featured live streams of political channels alongside relevant tweets from users. Twitter hopes that its moves toward streaming and the video-first method of display will help attract new users. thereby eradicating the confusion of users setting up an account and then deciding whom to follow. The company hopes that this new strategy will make Twitter a more versatile platform that users would turn to on a more frequent basis.

With a valuation of more than $16 billion, Twitter is valuable for its data, but it needs to prove that it has potential to grow its user base before a potential buyer takes over. Though the Vine shut down comes as disheartening news to its once loyal fans, this move may give Twitter an opportunity to refocus its business model and improve upon its core offerings. This can perhaps provide Twitter with a more distinguished identity and a clear strategic direction as it prepares to find a buyer. Any buyer will have to take on Twitter with its new strategy but whether or not the refocus will grow its user base is yet to be seen.

Timeline of Social Media Landmarks >>2010 October 2010 - Instagram launches as a free mobile app >>2011 July 2011 - Snapchat launches as an iOS-only app >>2012 April 2012 - Facebook buys Instagram June 2012 - Vine founded October 2012 - Twitter buys Vine December 2012 - Snapchat launches and adds video sharing capabilities to app >>2013 April 2013 - Vine became the most-downloaded free app October 2013 - Snapchat launches Snapchat Stories December 2013 - Instagram launched Direct, allowing users to send other users photos December 2013 - Snapchat allows users to replay one snap a day >>2014 May 2014 - Vine launched web version August 2014 - Snapchat adds “Live” section to platform October 2014 - Snapchat announces it will begin publishing ads >>2015 January 2015 - Snapchat launches “Discover” to feature content from brands August 2015 - Vine introduced Vine Music October 2015 - Instagram launched Boomerang, an app to shoot one-second burst photos >>2016 March 2016 - Instagram extends video limit to 60 seconds June 2016 - Vine expands video length limit to 140 seconds July 2016 - Snapchat adds Snapchat Memories, allowing users to post photos from camera roll to Snapchat Stories August 2016 - Instagram launches Instagram Stories, similar to Snapchat Stories October 2016 - Twitter announced it would discontinue Vine, but keep existing Vine content on its website

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OPINION

Financial Literacy and Inclusion in India: Demand and Supply Sanchit Kumar Class of 2018

ll During the launch of Pradhan Mantri Jan Dhan Yojana (PMJDY) in 2014, India’s Prime Minister Narendra Modi declared, “If we want to eradicate poverty, we need to get rid of financial untouchability.” Fast forward two years, and Modi’s PMJDY scheme to foster inclusive development appears to be eliminating financial ‘untouchability’ as over 75 million bank accounts have been opened.

Yet, a study by the Organization for Economic Cooperation and Development (OECD) in 2016 suggests that the Indian population has not been ready for this widespread initiative.

Demand and Supply Although over 75 million accounts have been opened, many of them are empty and 70 percent of them are used once a month.

These underused bank accounts indicate a lack of interest and trust in financial services. An OECD survey corroborates this explanation as low levels of awareness in major financial products and services have been noted, “including crop and livestock insurance (27% and 24%, respectively) and pension products, such as the Employees Provident Fund (38%), National Pension Scheme (36%) and Family and/or Employee Pension Schemes (30%).” While the government has targeted the supply-side to scale financial inclusion, demand-side barriers such as financial literacy must be equally addressed to complement the increased access to financial products.

Financial Literacy The National Strategy for Financial Education has been developed to improve efforts in schools and towards community outreach workers. The Reserve Bank of India has undertaken “Project Financial Literacy” and instructed banks to open Financial Literacy Centres to instill and diffuse general financial concepts to target groups like university students. Yet, these steps still need to be further bolstered. The 2014 Financial Literacy and Inclusion Survey by the National Centre for Financial Education suggests that the critical challenges facing a financial education agenda are the

The Outdated Electoral College Arjun Gheewala

urban-rural and gender gaps. “Urban residents showed higher levels of knowledge than rural residents (differing by 7.4 percentage points on average) and men showed higher levels than women (differing by 7.0 percentage points on average).”

In rural areas, microcredit has been used for “home purchases, weddings, health, funerals, and school fees.” This indicates that borrowing is used for consumption and not for investment. For any policy objective, it will be important to understand that access to credit is not as relevant as the use of credit. For women, their husbands enhance ownership of household assets by departing from wage based work to self-employment as men use the loans - given to their wives - to start their own businesses. Laws that safeguard women’s control over loan based assets and that allow collateralisation of loans with cash flow, property or equipment must be introduced. Furthermore, discriminatory policies, in which men sign documents for women in banks, are still in place and should be removed.

Trust appears to be the biggest issue. Banks have promised financial returns to garner small deposits, creating up a trust deficit.

Entities like the National Stock Exchange (NSE) and structured financial intermediaries are pivotal to creating trust through awareness. The NSE academy has helped women form self-groups across states like Andhra Pradesh, Tamil Nadu, and Rajasthan. By identifying a middle layer of trainers to disseminate information to these women, the NSE has instilled the basics of managing money more efficiently. Yet, to implement a large population-wide initiative in India, state governments will need to play their part by using their existing broadcasting infrastructure to increase the reach to local schools and rural areas. Ultimately, any initiative will take time.

Regional coordination at the state level will be necessary to reduce rural and gender based inequalities and incentivize these target groups to trust financial services. In the long term, traditional power structures and norms will collapse as job creation and female entrepreneurship are promoted.

Education Reform: a Chance to Get it Right Aditya Garg and Sami Siddiqui Class of 2018

ll In the aftermath of the presidential election, we are left thinking about how policies will change and what Presidentelect Donald Trump’s priorities will be. Many in the coming days will comment on the underlying social and economic currents that launched Trump to the presidency. I would like to take this opportunity to discuss a stakeholders group that the president has the chance to take the lead on: education and teachers.

In today’s political and social environment, the aforementioned conditions are all too common for teachers and those entering the education field. Yet, they receive virtually no attention. Indeed, instead of reform, we have heard politicians such as Rand Paul and Michelle Bachmann voice opinions to rid the country of previous educational reforms, funding, and even the Department of Education.

While other countries are redoubling their investment in teachers and education, the United States continues to restrict and scale back its investment in those sectors.

In states across the country, legislators are moving backwards on reforms. In North Carolina, for instance, the General Assembly passed a bill in 2013 eliminating teacher tenure, automatic pay increases for teachers who earn a master’s degree and the NC Teaching Fellows Program.

I am glad to see that our country has such great values.

Rather than encouraging teachers to enter the field, the United States education system has made it harder with legislative roadblocks and limits.

Teachers are the foundation of our society, the stimulators of intellectual curiosity and experimentation, the progenitors of a future that will only be marked by increased complexities. And yet, what do we do?

We continue to pay them the lowest salaries of any profession.

According to the National Association of Colleges and Employers, teachers have an average national starting salary of just over $30,000.

Professions with comparable training and education levels, such as computer programmers, public accounting professionals, and

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registered nurses all make around 50% more.

We continue to repeatedly restrict their classroom budgets and capabilities. Teachers spend over one and a half billion dollars of their own money on supplies for their students, according to Dave Nagel of The Journal.

We continue to discourage bright talent from entering the noblest of all fields. Studies and surveys done by the National Education Association show that nearly 50% of new teachers leave the profession within five years of teaching. 37% of teachers who quit attribute their decision to low pay.

Such a sense of oppression and frustration is simply unacceptable.

Our society rests on the shoulders of our teachers and yet we show no sign of appreciation or gratitude. Instead, we pelt them with continued restrictions and abuses such as the common critique that teachers “get summer off”.

According to PayScale, the vast majority of work teachers do like planning curriculum, grading, tutoring, etc., happen outside of the traditional 40 hours and teachers are not compensated for that overtime. Also, teachers are not paid during summer vacation and frequently have to take on second jobs to supplement their income.

Education is important. It changes lives. It ends poverty. It invites prosperity. The future of our society depends on the teachers that build it. If nothing else, we must stop the continual demoralization of teachers and the use of education policies as a means of expressing political or ideological differences.

If we do not give teachers the respect they deserve, the pay they are worth, the resources they need, we are digging the hole for our own future.

There have been multiple bills introduced in Congress and it is time to enact comprehensive education reform. Teacher pay should be increased. Funding for school supplies and early childhood programs should be increased. These should not be controversial issues.

I hope legislators are listening.

Class of 2019

ll In wake of the surprising election outcome, anti-Trump protests have brought the electoral college into the spotlight. Many argue for the elimination of the electoral college in favor of a voting system that would simply focus on popular votes, viewing it as a fair alternative to electing our country’s highest representative.

Despite Hillary Clinton having garnered over 900,000 more individual votes than Trump, Trump received 58 more electoral votes, which are votes representatives cast on behalf of their states based on its popular votes. So, how does a candidate that received fewer popular votes still win the general election? Why do we have the electoral college?

Alexander Hamilton wrote about the electoral college in the “Federalist No. 68” (1788), stating that it was not only vital, but “desirable” for the American democracy. Fearing submission to another monarchy, Hamilton advocated that the electoral college’s meant Americans could choose a president counter to the popular choice.

The fear was founded on legitimate concern that the US could fall under the reign of a charming elitist monarch who would win the popular vote and later act against the interest of the free people. To eliminate this potential catastrophe, the Founding Fathers built a fail-safe method to protect democracy. Now, this unfortunately also means that popular votes garnered from one region are only meaningful until a certain margin is achieved.

Flaws of the electoral system were known by the sixth presidential election in 1824 when neither Andrew Jackson, nor his opponent John Q. Adams, received enough electoral votes to win the general election. Jackson narrowly beat Adams in both popular and electoral votes but got the short end of the stick when the Adams became president from a vote by the House of Representatives. Since then, five presidential elections have been the subject of this controversy due to flaws in the electoral process.

But let’s be honest: we have moved past legitimate fears of electing a monarch. More importantly, our voters have significantly more ways to vet our candidates now than in the 1800s. Our population is more literate and has access to the Internet.

The National Center for Educational Statistics (NCES) estimates that the US had an approximate white illiteracy rate of 14 percent in the 1820s, compared to less than 0.1 percent total today. A quick search on any candidate reveals multiple articles on how many emails they’ve deleted or how many bankruptcies they’ve declared. But literacy and the Internet aside, our nation has numerous resources to compensate for any lack of knowledge. Coast-tocoast political rallies, nationwide campaign broadcasts, and relentless news coverage bring each election into every American living room. Awareness and information are pervasive.

While the system made sense 200 years ago, today, however, it mocks the ability for our developed nation’s citizens to make an accurate and informed decision on who they want as president. In the 200 years since the electoral college was ratified by the 12th amendment, it has not once been used for obstructing the seating of an unfit candidate. All five times have been technicalities that worked in the favor of the unpopular candidate. Every losing candidate in the five disputed elections has received more popular votes than the winning candidate. The most undeniable fact against the electoral college is that it was designed to avoid a totalitarian leader. In stark contrast to the 1800s, this kind of fear is more than irrational at present.

Perhaps what’s most surprising is that we seem to understand that the electoral college doesn’t make sense. According to Gallup, an overwhelming 65 percent of Americans support swapping the electoral college for popular votes. In contrast, 56 percent of Republicans support keeping the electoral college. Interestingly enough, out of the five electoral college controversies in American history, Republicans have benefited every time.

This isn’t a question about parties. The system should be rethought for the sake of fairness in voting. What is the point of advocating plurality of choice and encouraging vocalization of opinion if ultimately the electoral college looms overhead?

We share this antiquated system with only eight other countries including Kazakhstan, Myanmar, Trinidad and Tobago and Pakistan. The one characteristic most of these countries have in common is their relatively new and unstable government. These modest sized countries are faced with real threats, like a hostile takeover or infiltration of a radical faction in their political system. Under such severe circumstances, it is understandable that an electoral system can help protect the country’s democracy.

Alternatives to the current voting system have been proposed several times.

But America’s bipartisan political landscape severely limits the creativity of new voting systems. Third parties in America have historically received far less votes than their bipartisan counterparts. In the 2016 election, over 95 percent of American’s voted Democrat or Republican.

There are no two ways around it: the majority of voters who cast their ballot on November 9 wanted Hillary Clinton to be sworn on Capitol Hill this January. But only (and truly only) because of our 200-year-old fear of the next monarch, Donald Trump will be our 45th president instead.

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THE RISE

OF THE GAMING INDUSTRY League of Legends Worlds 2015 (Source: Riot Games via lolesports)

Victoria Chen Class of 2019

Staples Center, Barclays Center, Madison Square Garden— ll while most would think this would just be a list of the homes of the Los Angeles Lakers, the Brooklyn Nets or The New York Rangers, these venues have hosted some of the biggest and most recent tournaments in eSports. As of last year, eSports’ largest game, League of Legends, had a live-stream viewer count of 32 million people. This number eclipses the ever-popular and often-discussed Super Bowl, which registered only 3 million viewers for its livestream. Once a dream, displaying eSports’ finest moments on the same stages as multi-billion dollar sports teams is now a reality as the video gaming industry has grown significantly in recent years.

Beginning as early as the 1940s, the video game industry started with computer and arcade games before adding in console. The gaming industry grew alongside advances in technology, allowing for better consoles and more games to be developed.

As video game companies started shifting their focus to be on quality over complexity, technological advances allowed for more complex games to be developed at lower costs. This enabled the rise of free online games. Before, many video games had excessive turnover due to a very steep learning curve, making them unattractive to potential players, or due to a pay-to-win game structure. According to Charles Onyett from Imagine Games Network, the pay-to-win structure seemed to work well in certain countries such as China, but certainly not in the US. So, by offering quality games for free, this model became a highly attractive one that many game designers have adopted in recent years.

These games tend to appeal to a younger audience, many of whom seek the thrill of competition and glory. This transition was facilitated by changes in the game revenue model: premium in-game content no

longer helped you win, for it was purely aesthetic. Winning became dependent on skill and chance alone, and these games soon captured the attention of adolescents and adults around the world.

Riot’s League of Legends is the prime example of a free-to-play game catering to those seeking to test their skill. Undoubtedly the most popular game of this past decade, and still continuing to grow, this multiplayer online battle arena (MOBA) pits one team against another, and the two teams compete to get to the opposite side of the map. League of Legends brought to consumers a way to satisfy competitive spirit and laid-back casual gaming in one fell swoop: this stems from the game’s one simple objective, which is to destroy the enemies’ base. In its early years, League began with only 40 different characters to play and a professional scene limited to only North America and Europe; nowadays, League of Legends has 133 characters and a professional scene with competitive prize pools of $2 million.

With 100 million monthly users worldwide and acquired by Tencent 2015, League of Legends has grown to be the industry’s largest game.

In PwC’s recent forecast of the entertainment industry, gaming is expected to grow slower than internet access and advertising, but faster than cinema, TV, music, and books. With a growth rate of an estimated 3.6% a year, PwC projects the gaming industry to reach $20.3 billion, far surpassing many of its entertainment rivals.

With this rising momentum, perhaps we should look at what Stern has to offer in this respect. Stern has just one class on the gaming industry: Business of Video Games. Adjunct Assistant Professor Joost van Dreunen, who teaches this class, commented on how Stern was already “ahead of the curve,” and that it was Stern that had invited him to come teach. However, it seemed that we both hoped for more support for students who were aspiring to work in the industry. As Professor van Dreunen explains, the gaming industry consists of the

“suits” and the “creatives.” Especially as the industry grows, it becomes “increasingly important for the suits to understand the creatives.”

Therefore, there is hope for the gaming industry to be taken more seriously, and studied with the respect that other entertainment industries have garnered.

With the gaming industry’s incredible growth and potential, why hasn’t more been done? First and foremost, there is the seeming paradox of “studying games.” Games involve play, and there is a continuing stigma around the idea that play is for children, when in reality, adults also need play, as it is a vital part of social interactions. Moreover, gaming is very different from other entertainment industries as for what is displayed. Drawing upon the example of film, and how there are actresses who walk down red carpets, Professor van Dreunen noted the dichotomy between film and games. When a game is created, the “end product is the one that is heavily displayed, and not the people who contributed to it.” Gaming draws up a new, unfamiliar model that is different from many others in entertainment industry, and perhaps, this unfamiliarity makes people more resistant towards it.

Nonetheless, there is a thriving community of students interested in the gaming industry. As an example, Professor van Dreunen’s class has grown rapidly over the years, starting from a summer class with just a handful of students to now a regular semester class offered under the Marketing department that usually has a waitlist as well. More and more Stern students are demonstrating interest in this up-and-coming industry, and there is increasing potential for the school to aid students in exploring more unconventional career paths, such as being a “suit” in the gaming industry.

Break into the Not-for-Profit World with CEO and NYU Professor Aria Finger discusses the business of nonprofits Tristan Harris Class of 2020

ll Stern students are increasingly looking for ways to leverage their business backgrounds in positions that allow them to have a meaningful and rewarding career. The launch of the new “Sustainable Business” co-concentration falls in line with a movement within the Stern community that serves to emphasize business as a force for good in society.

Working in the not-for-profit sector is one of the many ways that Stern students can leverage their degrees to affect social change.

To explore why Stern students may want to consider working in the not-for-profit sector, The Gould Standard reached out to NYU Professor Aria Finger. Professor Finger is the CEO of DoSomething. org, one of the US’s largest youth movement organizations with over 5.4 million members. Apart from her full-time job as a CEO, Finger teaches a course entitled “The Business of Nonprofit Management.” Her course encourages students to view not-for-profit organizations as organizations that are operated much like for-profit businesses, while also educating students on the unique challenges that not-for-profits face.

After graduating from Washington University in St. Louis with a degree in economics, Finger started her career in the not-for-profit sector because she “wanted to do good in the world.” She saw starting with DoSomething, then a small organization with only five people, as one

of the many ways to do good in the world. She emphasized that the opportunity to work at a small organization granted her an “outsize influence,” exposing her to diverse and high level experiences at a young age. In response to whether she would recommend staying at the same organization for an extended period, like she has at DoSomething for the past eleven years, her guidance is to make sure that you are at an organization where “you are always learning.” She stayed at DoSomething because she saw it as a way to “have a big impact on the world,” while also allowing her to continue growing professionally, for example, such as having the opportunity to launch DoSomething’s consulting spin-off TMI (“Too Much Information”).

Finger considers herself extremely lucky to have landed at DoSomething and encourages students to not take a negative view of the sector just because of one bad experience. Her advice to students wanting to break into the not-for-profit world is to “keep an open mind for everything.” She recommends that “people who want to change the world should keep an open mind about the for-profit world” and that Wall Street should not be seen as the only avenue since “not everyone needs the same thing.” She does encourage students to consider the fact that “your coworkers and the people you spend a lot of time with shape who

you are” and that “no matter what career you decide to do, be careful of being in a bubble.”

For students considering starting a not-for-profit themselves, Finger warns “starting something should be the last thing you do after looking exhaustively at all the other options.” She does not undermine the fact that starting an organization is an admirable endeavour;however, she urges students to consider the administrative costs that come from starting a new organization, so “make sure you are adding something unique to the space.” Sharing some personal insight, she admits that “even after eleven years in the sector, I have so much more to learn” and encourages to “be humble in the work that you do.”

For students seeking internships in the not-for-profit sector, Finger recommends students apply to the DoSomething paid semester or summer internship program – “we love Stern students”. Information can be found on DoSomething.org. For students looking to learn more about the not-for-profit world, consider taking Finger’s course which can be applied to the new Sustainable Business Concentration, the Social Entrepreneurship Stern/Wagner minor, and the Public Policy and Management Stern/Wagner minor.

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Online Streaming Sites

And How They Came to Dominate Class of 2020

ll At its peak, Blockbuster was the leading brand in providing movie content to consumers outside of a movie theater. All consumers had to do was go to the store and walk out with a movie rental. In this day and age when convenience has become a top priority, consumers find it too tall an order to go to a store and rent a DVD. Thus has emerged the idea of delivering content through the internet, so that consumers can receive it without any effort on their part. At a flat fee per month, consumers are able to watch TV shows, movies, and everything in between. Netflix., which pioneered the idea of streaming content, has become one of the biggest household names in the streaming industry.

Netflix claimed an idea that created and revolutionized the streaming services industry. It was so influential that Amazon introduced Amazon Prime video in order to compete with Netflix. Not only did Amazon launch its Prime video feature, but it also bought Twitch.tv, an onlinegaming streaming website, at nearly $1 billion in cash. Today we see that a significant number of American consumers obtain their content through streaming. With competition from Hulu, Amazon Fire TV and other streaming services, the cable box has become a relic of the past.

Netflix and Hulu currently have nearly 100 million subscribers.

Their annual revenues have increased by 50% over the last two years.

The streaming service industry has expanded, owing to the convenience of its program. Content is playable on iPads, iPhones, and laptops. One of the most appealing characteristics of streaming services is the reduction in advertising. When users watch Netflix as opposed to cable and other platforms, they save on average 160 hours per year. Another selling point of streaming service is the ever-expanding premium content to which subscribers have access. Unlike most other companies, netflix is able to deliver ad-free content and popular programs to its users for a small monthly fee.

Source: RCN

Aaron Choi

Streaming services can extend beyond broadcasting the everyday TV-show or the newest Tom Hanks movie. For example, Twitch.tv, owned by Amazon, holds a substantial share in the e-sports streaming industry. In 2015, it held a 43% market share of the gaming content industry, equivalent to $1.6 billion in revenue.

In a survey of Stern students, it was found that 73% of respondents subscribed to Netflix, either its streaming, DVD service, or both. Of these students, around 40% reported watching less than 2 hours a week, 40% reported watching between 2-6 hours a week, and 20% reported watching over 6 hours a week. An overwhelming 80% of sampled students reported binge-watching a show.

Binge-watching is an activity in which consumers continuously watch episodes over an extended period of time, typically spanning over six hours. Of those who binge-watched a series, most stuck to either the Emmy Award Winning series The Office and / or the Emmy Award Winning Netflix original series, Orange is the New Black. Among students who subscribed to Netflix, 41% reported subscribing to Amazon Prime video. A subscription to Amazon Prime allows users to download or stream video through Amazon Prime Video. Twitch.tv was largely unpopular, with only 10% of survey respondents reporting watching its content.

Netflix’s subscriber base continues to rise, but faces threats from other streaming services. Needless to say, streaming services bring premium content to the average consumer and can expect to grow into the future.

CONTENT ACQUISITION SPENDING over the last fouryears *

*Subscription Video on Demand

Source: Wall Street Journal

Source: Nielsen

95

Escalation of the Ad Blocking War Mona Chen Class of 2020

ll A 2016 Adobe study showed that over two-thirds of consumers believe that online ads have either stayed the same or improved.

Despite this, there is continued growth in the usage of ad blockers.

Ad blocking software such as AdBlock Plus allows users to browse online without encountering advertisements, including pop-ups and video ads. In 2015, consumers around the world used this type of software 40% more than they had previously used. Blocked advertising resulted in a global loss of revenue that was estimated to be $21.8 billion in 2015, and that is projected to increase to $41.4 billion in 2016. In effect, the evolving industry may have longstanding ramifications for advertisers, ad-blockers, and consumers.

Gaming websites, social network platforms, and search engines are among those that have been impacted by the financial costs of the growing popularity of ad blockers. In recent years, a number of websites have taken to displaying messages to alert users that the ad blockers are depriving businesses of revenue and to prompt the users to disable the ad blockers before they can access the website’s content. While in some cases these efforts successfully convinced users, in other cases they encouraged users to find alternative websites, which hurt the businesses.

Earlier this year, Randall Rothenberg, President of the Interactive Advertisement Bureau, insisted that ad blocking negatively affects consumers by limiting their access to information. He also condemned ad blockers for disrespecting freedom of the press and creating a business model based on censorship. Stern Advertising Professor Dan Cohen believes that these types of claims are extreme. He pointed out that while there are upsides to ads, ad blockers see an opportunity to make a profit and ultimately “deliver value to consumers, which is the foundation of a capitalist market.”

Consumers complain that ads slow down websites, compromise users’ privacy, and disrupt the web-surfing experience. Taking these concerns into consideration, businesses have been focusing more attention on improving users’ experiences so they are less tempted to turn to ad blockers. For example, The Guardian created a new email address to receive tips about slow ads on the site. Additionally, The Coalition for Better Ads, which Google and Facebook are members of, aims to improve the digital advertising experience for consumers by setting standards for ads, implementing those standards, and increasing consumers’ awareness of those efforts.

Once people start using ad blockers, they are quite unlikely to stop. This trend, in addition to an increase in mobile ad blocking, necessitates speedy responses from business. Companies and advertisers looking to dissuade people from using the software recognize that they need to not only act fast but also look at the situation from multiple angles to come up with innovative solutions to combat ad blocking.

A Look into the Start-Up Culture at Stern Tristan Harris Class of 2020

ll NYU boasts an impressive pedigree of startups ranging from Twitter to Etsy. The location of Stern in the heart of New York City means that students are also in the heart of “Silicon Alley.” Many students decide to attend Stern due to ease of access to both the city’s and the school’s abundance of resources. For a school so famous for its finance program, however, the rising startup culture often goes unnoticed.

Freshman Elliot Waxman came to Stern with plans to create a company after graduation, if not while at Stern. Waxman has been greatly impressed with Stern’s initiatives and encouragement of student entrepreneurship. He points towards the Leslie eLab, the design thinking program taught to all freshman through the required Cohort Leadership Program, and initiatives such as the Reynolds Changemaker Challenge and the 300k Challenge as allowing students to gain access to startup education, mentorship, and community as early as in their freshman year. The design thinking component of Cohort Leadership Program is new this year and encourages students to help explore solutions to food related issues such as food waste on college campuses. Stern has partnered with VSA Partners, IDEO, and Fahrenheit 212 to develop the program. It is through these programs that Waxman believes that NYU is inspiring “stern and non-Stern students to pursue their passions for entrepreneurship and challenge their perceptions of start ups.” Waxman hopes to win funds in the near future through a Stern competition, and

create a startup that he hopes will enable him to tackle Colony Collapse Disorder (when worker bees abandon their Queen for unknown reasons), a phenomenon that has resulted in decline in bee populations causing skyrocketing costs in the agricultural industry.

Stern Junior Joshua Sakhai who is currently the COO at NYU start-up Ephemeral, a company that produces a tattoo ink with a safe removal solution. Ephemeral won $75,000 under the “Technology Venture Competition” category of the 2014-2015 $200k Entrepreneurs Challenge hosted by Stern’s Berkley Center for Entrepreneurship & Innovation. The startup also graduated from NYU’s Summer Launchpad Accelerator. Ephemeral recently won Inc. Magazine’s “Coolest College Startups” championship round in 2016 and is currently working towards testing their ink for safety and efficacy. Sakhai commented that the “general interest in startups and tech have increased” within the Stern community, however he laments that “we’re on the right track, but we’re not quite there yet.” He does, however, look towards “the progress we’ve made as a whole is great,” specifically commenting on the involvement of more students in entrepreneurship and more resources available for startups.

Stern’s location, alumni-base, diverse student body, and resources all position it to be a hub for startup culture. As NYU continues to direct more funding and faculty to entrepreneurial initiatives, students will

increasingly feel more driven and supported in launching startups while on-campus, instead of waiting until graduation. Although Stern doesn’t offer an Entrepreneurship Concentration, many students are now pursuing the Data & Computer Science Concentration as a way to gain the technical skills needed for their start-up ideas. For students looking to get more involved in entrepreneurship, they can consider attending Office of Student Engagement sponsored speaker series and workshops hosted by the Entrepreneurial Exchange Group.

To help develop the design thinking component of the Cohort Leadership Program, Stern partnered with the following organizations:

Source: Company websites

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STUDENT LIFE

So What Does Stern Student Council Actually Do? Victoria Chen Class of 2019

Stern’s Cantor Board Room was absolutely packed on November 10th. With lots of uproarious laughter and good company, Stern Student Council’s Third Annual Charlie Brown Thanksgiving was a phenomenal success. This year, StuCo’s programs have attracted many students, allowing students to feel like they belong and are part of the Stern community. But this leaves the rest of us to wonder: besides being glorified event planners, what else is in the works from Stern Student Council?

StuCo has always been a vital part of the Stern community. StuCo is responsible for many of the event highlights of the year, and coordinates with the Office of Student Engagement to improve the quality of the Stern student experience. This year, StuCo has started a few initiatives, such as being more active in the university-wide Senate. Stern is fortunate this year to have quite a few students on Senate leadership, and the goal is to make this level of proactiveness more sustainable, such that Stern continues to have a way to make an impact at a university-wide level. By taking policies from a school-wide level to a university-wide level, it is StuCo’s goal to set an example for other schools to do the same.

Also in the works are new programming ideas and initiatives.

With an emphasis on literal “new programming,” Stern is currently collaborating with the Tandon School of Engineering in the hopes of hosting a joint-school, fintech Hackathon. Stern has also partnered with CAS to host a debate series, highlighting key issues such as free speech. These partnerships with other schools highlight another key goal of StuCo this year, which is to shift away from Stern-centric programming and collaborate with other schools to produce more large-scale events that can positively impact the student body. ll

news.paper

The Rising Popularity of Data Science at Stern Kelly Xie

Class of 2018

Names left to right: Goodness Osih, Arianna Chang, Pedro Tenreiro, Devon McLeod, Kobi Dent (Source: Victoria Chen)-

Even with this new goal in mind, StuCo’s priority is still to address the needs of the Stern student body. With serious issues ranging from Stern grading guidelines to more humorous issues such as two-ply toilet paper, StuCo has specific committees dedicated to focusing on individual issues proposed by students. These committees cover a broad range of topics, including academic affairs and alumni relations. Each committee addresses the related issues, and anyone is welcome to submit additional issues.

Thus, it seems that StuCo does do more than plan events. Through partnering with other schools and continuing to address internal issues that Stern students face, StuCo definitely has much work to do in this upcoming year.

The Career Path Less Traveled Andy Fang

Class of 2017

Confession: I chose to study business at NYU Stern because I did not know what I wanted to do and who I wanted to be. I was clearer on what I didn’t want to do, being self-aware enough to already know that anything involving high-level mathematics or science was not for me. Studying business, with its all-encompassing generality, sounded respectable enough and also offered an appealing vagueness that meant I didn’t really have to commit to anything just yet. I was privileged enough to have some time to figure things out.

Consequently, I approached my time in college as a way for me to broaden my horizons. The city offers countless opportunities in a wide array of fields and I wanted to take advantage of that, exploring different walks of life and encountering people from diverse backgrounds. Having always been interested in food and the restaurant industry, I asked, in my freshman year, a Japanese chef to give me a trial at his Williamsburg restaurant Okonomi as a ramen cook and I’ve been working at the restaurant in various capacities ever since.

In my sophomore year, I also took on an internship at Milk Gallery, a contemporary photography gallery in Chelsea. I was passionate about photography and wanted to dive into the industry head-on to learn as much as possible. Following my internship, the gallery director asked me to stay on as a gallery associate, and I spent my junior year working both part-time jobs at the gallery and the restaurant.

Working at an art gallery or working at a restaurant are not typical choices Stern students make professionally. I completely leapfrogged the infamous on-campus recruitment for the coveted junior year summer internship. Consequently, as a senior, I definitely felt incredibly overwhelmed at times recruiting for a full-time position with the eclectic experiences on my resume. Yet I wouldn’t change the choices I made one bit.

Through my non-business jobs, I enjoyed experiences that I could never have gleaned from a typical business internship, from enjoying a surprise 2 Chainz performance and interviewing established fashion photographers at Milk, to learning Japanese and visiting a farm in the Berkshires with the restaurant team. In addition, my unique job experience also provided me with skills that could translate to a more business-centered career as well. During fulltime interviews, I had a resume that set me apart and experiences that I could speak about with genuine interest.

Working in the restaurant industry, I didn’t just learn about how to make delicious noodles, I also acquired time-management and customer service skills. At the gallery, I learned how to leverage e-commerce, a growing space within the art industry, as well as targeted social media campaigns to yield growth in revenue. Finally,

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Senior Andy Fang takes customers’ orders during an evening shift at Williamsburg restaurant Okonomi (Source: Andy Fang)

by participating in both the restaurant and the gallery’s close-knit professional teams for an extended period of time, I gained firsthand teamwork experience in a way that most college students don’t encounter prior to entering the workforce.

Nothing exists in a vacuum, and even though I worked in completely different fields than most Stern students do, I still obtained transferrable skills that supplemented my business education at Stern, albeit in a more unconventional and personably enjoyable way. I realize that my approach is atypical and perhaps not for everyone, especially those who have already defined their career path. But for those who haven’t yet solidified their career goals and desire to explore opportunities beyond investment banking and consulting, I urge them to relax and pursue their interests. There’s always more than one road to reach a destination.

ll Spend 15 minutes sitting in Tisch Hall and prepare yourself to be inundated with finance buzzwords: Sales & Trading, Investment Banking, Venture Capital, Private Equity, Asset Management… the list goes on. But nowadays you’ll also hear a different variety of buzzwords hovering in the air: from Business Analytics to Data Science, Information Technology, FinTech and more. Amidst a busy recruiting season for many Sternies, an underlying trend is gaining momentum: More and more students are making the switch from the reigning finance concentration towards the more tech-oriented data science track.

Stern’s new initiatives reflect this shift. This semester, Assistant Dean Ashish Bhatia announced Stern’s partnership with companies such as Google and HBO, allowing students to explore opportunities in tech and digital media. Eager to seek out the talents of students who crawl the fine line between business and technology, these companies have offered a series of events for these students. Earlier this semester, Google hosted an AdWords workshop, while HBO hosted a panel of recruiters to discuss the media company’s summer internship opportunities. These events, among others, have highlighted the practical applications of emerging technologies in fields like marketing, entertainment, and entrepreneurship.

Not a beat too late, Dean Rohit Deo has announced the rebranding of the Information Systems concentration to Computing and Data Science to “better reflect industry terminology.” This announcement comes as a timely change, pivoting the fate of this concentration towards a different and more focused direction. After all, analytics is less about the collection of large amounts of consumer data, and more about synthesizing and leveraging insights from that data to improve a business’s bottom line. “I like the change,” muses Colin Hong, a junior at Stern, “since it better reflects what I’m actually learning in my quantitative, data-driven courses.”

With tech gaining traction at Stern, clubs like Strategic Venture Society have stayed ahead of the curve. Paul Sondhi, founder and president of the club, remarks on how “SVS fits in this interesting overlap between tech and investing” in the world of venture capital.

One of the club’s priorities is to help business students with little coding experience break into the business-tech field. How? “Running a speaker series, partnering with clubs such as BAC and EEG, and keeping our members up-to-date on what's happening in VC and tech through workshops are how we'll get there,” explains Sondhi. These endeavors are perhaps the first step in exposing business students to a world of possibilities that they may have not been previously aware of, at a time of great expansion in the tech industry.

Whether through classes, clubs, or internships, some Sternies are diving in head first.

Cathy Zhang, a junior concentrating in data science, was drawn to the versatility of the field. She remarks on “how eclectic data analyst positions are - they span from traditional financial services firms to academic research centers”. Zhang finds value in her financial information systems class, where she is learning “how digital currencies and encryption are changing the financial services industry”.

Thien Tran, a senior concentrating in marketing and data science, gained experience in the field through his internship with SFX Entertainment, where he harnessed the power of data to optimize consumer targeting. Beyond graduation, Tran aspires to create a “start-up that would aim to solve inefficiencies with today's digital marketing techniques and fulfill opportunities that still have potential, like the mobile market.”

Trends at Stern mirror trends in the real world, and for a good reason. Whether in academia or in the workplace, big data rules.

With the emergence of new technologies, business fields that have historically been driven by qualitative-backed strategies are becoming increasingly numbers driven. Whether or not you are well versed in Python, SQL, or R, recognize that the ability to think algorithmically and visualize data strategically is invaluable, now more than ever.

Adaptability is key to keeping pace with the technology age. The digital wave is upon us, and it is up to us whether we want to drown in a fight against the current, or ride the wave out to new opportunities.

STUDENT LIFE

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Examining the Political Climate at Stern Aditi Shankar Class of 2018

ll In mid-October of this year, NYU Liberal Studies professor Michael Rectenwald was let go from his post as an assistant clinical professor after creating a “anti-PC” Twitter account dubbed “deplorable professor”. Prior to his termination, Professor Rectenwald was interviewed by The Washington Square News and subsequently faced criticism from his colleagues for his unorthodox beliefs about safe space initiatives and campus culture. In the interview, Rectenwald contends that “Identity politics on campus have made an infirmary of the whole, damn campus.” He goes on to establish a parallel between campus culture and a hospital ward. In response to these accusations, Members of the Liberal Studies Diversity, Equity, and Inclusion Working Group wrote in a letter to the editor of The Washington Square News: “Professor Rectenwald’s rhetoric repeatedly suggests that mental illness invalidates the ideas and feelings of those who live with it.” In a Washington Post op-ed, Professor Rectenwald critiqued his colleagues and the administration for “seeing political correctness as a means of asserting administrative control.”

As reported by Fox News, Professor Rectenwald has been re-hired by New York University to teach full-time in mid November. While the controversy surrounding both his allegations and the university’s response was relatively short-lived in the often myopic minds of millennials, his commentary does shed light onto NYU’s stereotypically left-leaning (“Social Justice Warrior,” as Rectenwald dubs it) political, and furthermore, campus culture. Rectenwald claims that the liberal-leaning “political correctness” on campus further fuels the alt-right: “every time a a

speaker is booed off campus…because they might say something that bothers someone, that just feeds the notion that the left is totalitarian.”

After the 2016 Presidential Election, grief swept the blue city of New York. Many expected a resounding victory for Secretary Clinton and were shocked by the surprise upset, and fair victory by Donald Trump.

While a variety of theories have floated around television and news sites, one seems to dominate the minds of most, if not all, pundits: that Donald Trump fed off the American public’s unhappiness with their own lives and the government’s inability to fix it. While both Secretary Clinton and President Obama asked, even demanded, that the left accept and support Donald Trump as President, protests have erupted across the country in cities and college campuses. Many leaders see the deepening partisan divide as a significant issue going forward.

Throughout his campaign, Trump rallied against the “political correctness” of the left. Rectenwald’s comments seem to hold true here – in doing so, Trump galvanized alt-right support as evidenced by Steve Bannon’s (Brietbart News Executive Chairman) strong influence on the campaign. As students protested against the election of ‘#NotOurPresident,’ the NYU administration, and Stern administration, disseminated their official responses to November 8th’s results. President Hamilton asked that students “heal divisions” and emphasized the university’s dedication to upholding the values of “academic excellence, open discussion, diversity, and inclusion.”

Acting Undergraduate Dean Rohit Deo provided a list of community support events, stressing “reflection” and “wellness.” By forwarding President Hamilton’s original email, Dean Deo reaffirmed NYU’s (and specifically Stern’s) “dynamic community.”

In early May of this year, New York Times columnist Nicholas Kristof wrote “A Confession of Liberal Intolerance” in reference to the question of “whether universities stigmatize conservatives and undermine intellectual diversity.” Rectenwald, a selfidentified “left communist” created his Deplorable twitter account to shed light onto this very issue.

Kristof found that the proportion of professors in the humanities that are Republicans ranges between 6 and 11 percent, and in the social studies between 7 and 9 percent. Kristof asserts that this “bias on campuses creates liberal privilege.”

As numerous peer-reviewed studies find, this liberal bias does exist on campuses across the country. An anonymous Stern junior who identifies as “socially liberal, fiscally conservative” finds that his views actually reflect those of a good portion of Stern students. However, he now feels as if this camp has “been grouped in with Trump supporters.” He also emphasized freedom of speech as one of the core facets of the American creed, and found that the norm of ‘safe spaces’ is in direct conflict with this basic liberty. On the question of NYU’s campus political culture, he did notice a difference between political culture within Stern and at other NYU schools: “I think Stern students tend to recognize the role of the economy and taxes, while NYU as a whole seems to care overwhelmingly about social issues.”

Another Stern Junior agreed with the previous interviewees sentiments about these visible differences between NYU culture and Stern-specific culture, noting that conversations in Stern often “drift back to the economy, or money,” and in result, political leanings may represent this fiscal awareness.

While the previous interviewee identified as “socially liberal, fiscally conservative,” this Stern junior, who

also wished for his comments to remain anonymous, commented that he has “felt shamed by NYU and Professors for voting Republican or for wearing Donald Trump apparel to class.” Rather than citing freedom of speech as an argument against safe spaces, he found that this culture “blinds us from the real world and the harsh reality of people that have for more hate than [he does] about these issues.”

Furthermore, this Stern student found issue with the administration’s overall response to the election. He found the emails “biased” as the responses “don’t recognize that [President-Elect Trump] won fair and square.”

Both Stern students expressed a desire for the administration to motivate students to become more actively involved in civics, rather than to provide spaces for remorse. As President-Elect Trump’s surprise victory sinks in, this notion of the ‘liberal bubble’ dominates the minds of journalists, political pundits, and students. Stern Professor Jonathan Haidt’s website, “Heterodox Academy” discusses the growing problem of the “loss of lack of ‘viewpoint diversity.” He states that “universities are unlike other institutions in that they absolutely require that people challenge each other so that the truth can emerge from limited, biased, flawed individuals.” While Rectenwald’s actions took an extreme turn, his twitter account and newspaper interview highlight these same concerns. The deepening political divide in this country could in fact start on college campuses, and therefore, deserves more attention on campus.

Haidt comments, “If [universities] lose intellectual diversity, or if they develop norms of ‘safety’ that trump challenge, they die.”

How My Time in Ghana Changed Me

Karan Magu Class of 2017

ll "For the duration of this trip, patience will be your new middle name," our friend Chris, an administrator at NYU Accra, duly warned us on the very first day of our arrival in Ghana. The term patience usually entails the capacity to endure delays and inconveniences with composure. I didn’t take his words too seriously. Yet as our group of 20 fresh-faced volunteers left behind the urbane bubble of Accra and headed deeper into rural Ghana, it quickly became clear that some of us would soon need to consider adopting new middle names. Two days into our trip, we had arrived eight hours away from the nearest semblance of urban life and were in the Woadze Tsatoe village, where the group would be spending the next two weeks working on community development projects. We had already been through gallons of bug spray, enjoyed hours of bumpy bus rides, acquainted ourselves with the blistering heat and made ourselves at home in the stationary bus as unforgiving rain flooded the streets. As I looked forward to our time in Woadze, I remembered Chris’s words and thought to myself, ‘This is going to be one slow and long-winded trip. I don’t know how I’ll get through this.’

Fast forward two weeks later, and I found myself staring at the mirror back home in New York, wondering if I was still seeing the same person who had taken that flight to Africa on the last day of spring semester. The rest of our time in Ghana had swept us by at a surprisingly fast pace, as if it had all just happened in a flash of colors, sights, sounds and smells.

Yet as I stood here, I could still not help but enter a flashback, trying to relive the past few days in Ghana and make sense of it all. I will never forget the looks of awe on the faces of those 5th grade students in the village school when I taught them how to use a computer for the first time! They huddled around me in a close knit circle under the tin roof of the school, and I slowly introduced to them the various parts of a laptop.

The inclined angle of their heads, and the gasps of wonder they emitted as I connected the charger to the single dusty electrical outlet in the school and booted up the machine were clears indication that the device had them transfixed with curiosity.

I started off by explaining the different parts of a computer, equating terms like hardware and software to their bodies and brains. ‘Just like your body has a brain that it needs to think, the hardware needs the software to function and think’, I said to them. Then I allowed them to interact with the keyboard, to touch and move around the mouse pad.

As for navigating the computer, I explained it to them through narrating a story of the adventurous ‘mouse’ who needs to find his way around a living room (the home screen) with their help and direction. I told them

that the icons for internet explorer or other applications, were magic windows which the mouse could click to enter and explore! Most of them had no idea what a computer even looked like before that day, but by the end of our class, most were able to transcribe notes from their school textbooks onto word documents on the PC. My flashback ended and I jolted back into the present.

This experience had confirmed my hypothesis that given the right environment and basic infrastructure, it is possible for anyone to learn how to interact with technology, even without any prior experience.

Through the support and encouragement from our professors and contributions from the SIV Ghana class, we managed to donate 3 laptops to the village school. During the school semester, I had also been independently working on a prototype for a sub-$100 affordable PC suited for use in offline and disconnected rural areas, which we were also able to donate. In the span of one day, a school which previously had no access to any digital infrastructure and where the students learned about IT from outdated textbooks now had a fully functioning computer lab.

In a village where fishing and farming had forever been the status quo and the only future available to these children, the possibility of working at an IT company, whether as a typist, an engineer or a programmer had now opened up. I now realized that the look on their faces was not one of awe alone, but a look of hope and imagination of the endless possibilities they could now access with the technology they were witnessing for the first time today.

As I faced the mirror, reflecting on that experience inspired me to choose a career path that would involve leveraging digital technologies to connect the disconnected and providing people access to a world of information at their fingertips. I formed a sincere belief that responsibly scaling accessible and affordable technology to everyone has the potential to eradicate illiteracy, income inequality, information asymmetry. From the African continent to the Indian subcontinent, digital technologies like mobile phones, computers and the internet are already well on their path to becoming the great equalizers, and will pay tangible socio-economic dividends going forward. Connecting people on well designed digital platforms can also solve various socio-economic-political challenges in the increasingly fragmented first world as well. Ghana made me realize that I want to be a part of this technological revolution that will only gain more momentum in the coming years, especially in emerging economies where inequality of all kinds is currently a way of life.

In those moments that flashed by in my mind’s eye were several that left an indelible mark, changing my perspective on my own life plans and my outlook on the world. I guess I had learned a new, broader meaning

Children at a school in Ghana huddle around a computer and learn about its purpose and features. (Source: Karan Magu)

of patience, as I realized that often our struggle to obsessively plan for and control all the elements of our life comes to no avail, especially when certain experiences we go through or certain actions we take have the unexpected effect of altering our preconceptions in ways we could never have planned for. We can only keep an open mind and act in the moment, then look back to realize that something wonderful happened.

We can retrospectively dissect and analyze what we learned, but in the moment, often we are not fully conscious of what our senses are taking in or what are actions may lead to. It is in this vein that I will forever cherish those moments from Ghana, the conversations I shared, the connections I formed with others and the lives I was able to hopefully inspire through my contributions. As they say, time is a relative concept, and sometimes we do not know the true value of a moment until it becomes a memory.

SPOTLIGHT

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Stern's International Business Exchange

IBEX

While Study Away is the most popular way for Stern undergraduate students to go abroad, IBEX (International Business EXchange) provides undergraduates in their junior or senior year an opportunity to experience cultural and social life at a local university in another country.

Rather than studying abroad at an NYU campus, IBEX specifically offers Stern students a highly immersive experience by placing students who apply to top business schools abroad at one of 18 partner schools in countries that include Australia, China, Denmark, England, France, Italy, Korea, The Netherlands, Singapore, Spain, and Thailand. Courses taken through IBEX can completely major and minor requirements or can be approved for Stern and non-Stern elective credit.

For elective courses taken at the campuses, students gain the valuable opportunity to learn more about the culture of the host country and even have the option of taking language courses as well. To apply, students must be in their sophomore or junior year (have to be junior-standing to go abroad and must apply one year in advance), have a minimum GPA of 3.0, and have the credit capacity to take at least two elective classes of 6-8 credits. The application process and information sessions take place in the beginning of each Fall semester, see online for more details.

Two students currently participating in IBEX for the Fall 2016 semester share their travels through photographs below: Sabrina Chow (Class of 2017) in Milan at Bocconi University and Dominique Nguyen (Class of 2017) in Hong Kong at the University of Hong Kong.

MILAN HONG KONG

Photos by Sabrina Chow

The Italian Gothic Cathedral is one of the most famous sights in Milan, crafted by artists like DaVinci.

Arco della Pace (Arch of Peace) stands as the city gate to Milan.

Cinque Terre, Rio Maggiore

Photos by Dominique Nguyen

Waiting during rush hour at Admiralty Station.

Visiting the Goldfish Market before classes begin.

THE GOULD STANDARD EDITORIAL BOARD Editors-in-Chief Devyani Nijhawan Lauren Tai Managing Editor Sanchit Kumar Markets Editor Aditya Garg Features Editor Aditi Shankar Student Life Editor Andy Fang Opinion Editor Karan Magu

Marketing Director Yishen Zhou Design Editor and Webmaster Kelly Xie Design Team Lauren Tai Alisha Thanawala Marketing Team Victoria Chen Aaron Choi Faculty Advisor Sunder Narayanan Venezia, Ponte dei Sospiri (Venice, Bridge of Sighs)

A fish seller in Sai Kung.