COURSE CONNECTOR

 ARTICLE SUMMARIES AND QUESTIONS

"The Lehman Crisis: One Year Later: Lessons of the Crash of '08," pp. 72-74: A whole year has passed since Lehman Brothers failed, sending the entire American financial system into such a tailspin that even the most optimistic economists feared a disaster of epic proportions. While we're far from out of the woods yet, 12 months of distance from that seminal event have given us a chance to reflect with cooler heads on what went wrong. We've learned some important things — chiefly, that the world's capital markets have become increasingly powerful relative to central banks, and that governments around the globe are more determined than ever to protect the multinational financial giants that survived last year's meltdown. So what does this mean in plain terms? Simply that for all the political bloviation about our current mess having transformational qualities, Wall Street remains fundamentally the same. It still operates on the principle of taking care of itself first, really big and important customers second, and everyone else last. So as memories of the worldwide panic of a year ago fade, and life gradually returns somewhat back to normal, the chances of genuine regulatory reform taking effect decrease with each closing bell.

Students take a closer look at the lessons learned — and not learned — in the year since Lehman Brothers collapsed.

Discussion Questions:

1. Why did the U.S. government bail out Bear Stearns in the name of saving the world financial system but let the much larger Lehman Brothers fail six months later? How was the Lehman crisis a beta test for the "too big to fail" doctrine?

2. What do you think the unidentified Wall Street broker quoted in the article meant when he said, "Greed got us into this, and greed will get us out"? Do you agree? Explain.

3. Describe Treasury Secretary Tim Geithner's financial regulatory-reform proposal. What is author Allan Sloan's solution? Which do you think sounds more feasible? Why? Why does Sloan feel that neither is likely to gain much traction?

"The 50 Most Powerful Women: The Enforcer," pp. 116-124: What is it about those celebrity CEO types? They always seem to have a mostly silent but undeniably strong deputy toiling behind the scenes to keep their massive enterprise humming. At Apple, it's Tim Cook, who has dutifully stepped in for his higher-profile boss, Steve Jobs, during his various health crises. Over at Oracle, the gregarious Larry Ellison has Safra Catz, the company's co-president (alongside onetime research analyst Charles Phillips) and the driving force behind Oracle’s stellar financial performance. While the former investment banker is nearly unknown in the broader business world, and is something of a mystery even within Oracle, Catz is Ellison's effective right hand. She not only acts as his proxy, but also translates her boss's ideas and ambitions into reality — a level of clout that has earned her the No. 12 spot on FORTUNE's annual listing of the 50 Most Powerful Women. Asked point blank what her role at Oracle is, the secretive Catz replies, "I'm here to help Larry," but given that the easily distracted Ellison prefers to rule from a distance, the buck routinely stops with Catz. Could succession be in her future? True to form, Catz's lips are sealed.

This article profiles Safra Catz, the influential but largely anonymous second-in-command at Oracle.

Discussion Questions:

1. How has Safra Catz's financial and operational acumen transformed Oracle since she joined the company in 1999? How is the deal for Sun Microsystems, which Catz helped spearhead, expected to affect the tech industry?

2. Describe the relationship between Catz and Oracle CEO Larry Ellison. How does Catz make Ellison's job easier? In your opinion, how does the low profile she keeps work in her favor?

3. Why do some insiders believe that Oracle co-president Charles Phillips is more likely than Catz to be tapped to succeed Ellison? Do you agree? Explain.

"The Capitalist Who Loves North Korea," pp. 128-139: A new international university is scheduled to be dedicated this month. It boasts a top-notch faculty, free Internet access for all students, a rigorous MBA program, and coming soon, an industrial park just off campus housing global firms looking to hire grads. Sounds pretty sweet, right? There’s just one catch — it's located in Pyongyang, the capital of Communist North Korea. No, it's not a joke. It's the Pyongyang University of Science and Technology (or PUST), the first privately funded university ever allowed in the Democratic People's Republic of Korea. PUST is the brainchild of James Kim, a native Korean turned American businessman, educator, and evangelical Christian, who was once imprisoned by North Korean leader Kim Jong Il on the suspicion that he was an American spy. So just how did PUST become a reality, with so many potential strikes against it? That's what state department officials, diplomats and others who conduct business in North Korea are wondering. Whether Kim cut some sort of deal with the Dear Leader is unclear, but what is clear is that, thanks to him, the Korean people will soon have access to educational opportunities previously unheard of in their isolated nation.

In this article, students read how James Kim fulfilled his seemingly impossible dream of founding a first-class university in North Korea.

Discussion Questions:

1. What was James Kim's primary reason for emigrating from South Korea to the U.S. in the 1970s? What does he hope to accomplish through the establishment of Pyongyang University of Science and Technology (PUST)? Why?

2. In practical terms, how did Kim's evangelical Christian faith enable him to build PUST, and before that, the Yanbian University of Science and Technology (YUST) in China? How did YUST's success help pave the way for PUST?

3. What compromises has Kim had to make to allow YUST and PUST to operate within Communist nations? Why do you think North Korean leader Kim Jong Il agreed to let Kim found PUST? Will PUST meet Kim's expectations? Explain.

"How Pot Became Legal," pp. 140-162: Is marijuana poised to follow the same path as alcohol and gambling in the U.S.? Maybe. In February, the Obama Administration indicated it would no longer subject individuals complying with state medical marijuana laws to federal drug raids and prosecutions, as was standard practice under former presidents George W. Bush and Bill Clinton. This understated act has enormous consequences for state and local governments dealing with budget gaps that could be plugged with the additional tax revenue medical marijuana sales would generate. For a model of how it could work, one need look no further than California, where 700 marijuana dispensaries currently operate as a result of a 1996 proposition allowing medical use of the drug. Many are run by legitimate businesspeople in an apparently safe, responsible manner; others, however, have become dens for the recreational distribution of marijuana. The key to a positive outcome appears to be early and careful municipal regulation. For example, Oakland limited its dispensaries to four, each of which has served the community beneficially. Los Angeles, meanwhile, began regulating its dispensaries late, and now is overrun with about 600 facilities, a number of which are disreputably operated, tarnishing the overall image of the industry.

Students examine the impact that the increased acceptance and legality of medical marijuana use can have on individual communities and American society at large.

Discussion Questions:

1. According to the article, why has the nation's 40-year war on drugs largely been a failure? What financial benefits could the legalization of marijuana reap?

2. Why is it important for states to tightly limit what "medical use" means when devising medical marijuana laws? While it is fairly easy to obtain a prescription for medical marijuana in California, why are some doctors still squeamish about prescribing the drug to patients?

3. What was the goal of California's Senate Bill 420, which took effect in 2004? Why does criminal-defense attorney Bill Panzer suggest that most of the state's dispensaries are not operating legally under the terms of the bill?