Breaking Points with Krystal and Saagar - Mini Show #24: SCOTUS, Olympics, Family Dollar, Corporate Evil, and More!

Episode Date: February 26, 2022

Krystal and Saagar talk about NBC's disastrous Olympics ratings, a rat infestation of a major food chain, the record of judge Michelle Childs, and how the MBA is the root of all corporate evil with new contributor James Li!To become a Breaking Points Premium Member and watch/listen to the show uncut and 1 hour early visit: https://breakingpoints.supercast.com/To listen to Breaking Points as a podcast, check them out on Apple and SpotifyApple: https://podcasts.apple.com/us/podcast/breaking-points-with-krystal-and-saagar/id1570045623 Spotify: https://open.spotify.com/show/4Kbsy61zJSzPxNZZ3PKbXl Merch: https://breaking-points.myshopify.com/James Li: https://www.youtube.com/c/5149withJamesLi Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

This is an iHeart Podcast. of dollars doing it. To help support our mission of making all of us hate each other less, hate the corrupt ruling class more, support the show. Become a Breaking Points premium member today, where you get to watch and listen to the entire show ad-free and uncut an hour early before everyone else. You get to hear our reactions to each other's monologues. You get to participate in weekly Ask Me Anythings, and you don't need to hear our annoying voices pitching you like I am right now. So what are you waiting for? Go to BreakingPoints.com, become a premium member today, which is available in the show notes. Enjoy the show, guys. There's some new reporting out on a woman who is now a top contender for a potential Supreme Court

nomination. This is Michelle Child. She is the choice of Jim Clyburn, who we know has a lot of sway with this administration. There's sort of an unholy alliance of Jim Clyburn and Lindsey Graham who are pushing Michelle Childs. We've previously brought to you how her early career was spent working for this union-busting law firm, where she also was on the management side of a lot of civil rights and discrimination cases. Now we're getting new reports about her time as a judge. Let's go ahead and put this tear sheet up on the screen. This is from the American Prospect. Apparently, shortly before she was nominated by Barack Obama to head to the U.S. District Court. She sentenced a man to 12 years in prison

for selling eight ounces of weed. Twelve years in prison for eight ounces of weed. The man's name is Willie Goodwin. After hearing the prosecution's argument, she sentenced him to 12 years because it was a non-paroleable third strike offense. That meant that Mr. Goodwin was compelled to serve a minimum of 85 percent of that sentence, locked up with violent offenders, 10 plus years of hard time, regardless of good behavior. The quote from Mr. Goodwin, he said, I had more time than people in there who killed somebody. It was crazy for bull crap. They had me sleeping next to murderers on a weed charge and they were going home before me.

For what I had, man, it was crazy. I lost my family. I had a daughter and couldn't take care of her. And by the way, highly significant that this decision came just before she's nominated to federal district court by Barack Obama. Politics of criminal justice reform were way different back then. That was still in 2009. It was different. Still, when it was seen as like being tough on crime was the way to get ahead.

So she throws the book at this man and he says, you know, Mr. Goodwin says, Charles was shooting for that seat trying to make an example out of me, didn't care what kind of lives she destroyed. So this is now a top contender put up to potentially be on the Supreme Court. There was a giant puff piece about her in the New York Times. Seems to me that the case is really building in her favor, especially with the potential bipartisan support. And it's just a perfect example of how damaging hollow identity politics ultimately are, where, you know, she checks the boxes of being a black woman. And so all of this record, which is completely at odds with what the Biden administration claims to stand for, is just completely disregarded. Yeah. And as you point to, she's still very likely to get the tap, right? Like she's getting all the hagiographic profiles.

Clyburn is pushing her because she's from South Carolina. She critically has, if you have the Lindsey Graham support, that would put you at a 51 and then Kamala Harris wouldn't even have to vote in order for the tiebreak. So there's a lot of support behind this. And I mean, the egregious part on those union cases, it was so recent that she was repping, you know, the management in a lot of these things, contrary to a lot of her social justice talk and a lot of talk from Clyburn and all those people as well, as addition to her very clear, what I think this shows me, especially given that she was up for a promotion right after this, is that she's willing to go along with the tides

and rule whichever that way. And at that time, this was where it was. And specifically on the union side then, then she's trying to make more money. So you have an outright corporatist. I mean, look, it's not like Stephen Breyer was a godsend on labor or whatever. So it would simply be continuing that legacy as well as RBG and many of the right-wingers on the court as well.

But it just does show you how hollow this all is. And nobody, outside of the prospect, nobody is doing any serious journalism on this. Compare that to the right wing. By the way, I'm fine. You know, you want to scrutinize the hell out of people's records before they get on the Supreme Court? I'm 100% for it. But I don't see any of this whenever it comes to Michelle Childs. Yeah, kudos to Alexander Salmon who wrote up this piece and did a great job interviewing Willie Roy Goodwin and getting those quotes as well. This is why woke corporatism is such an incredible threat. Right. Because, you know, it's going to be very hard. There was a quote from Politico about Sherrod Brown, who, you know, is typically a consistent ally of labor and the union movement. And even he was saying he would go along with this.

Because you have, on the one hand, you know, if you resist voting for the black woman to the historic black woman to be in court, you know the way you're going to be attacked. You know the way they're going to come after you and say that you're racist and you're evil and you're sexist and all of these things. So you have that against you. I think the progressive, quote unquote, groups that were interviewed said basically like, well, we don't want to cause a problem for Joe Biden on this. A problem for Joe Biden? What about the problem for all the people who will be subject, you know, to the whims of whatever the Supreme Court decides ultimately? I mean, that just, again, is completely bananas to me. But with this woke corporatism, people get to have the illusion of progress. Oh, we're at the illusion of, you know, moving forward and the arc of the arc of the moral universe is long, but it bends toward justice. And Oh, we're at the illusion of, you know, moving forward and the arc of the

arc of the moral universe is long, but it bends toward justice. And meanwhile, you're just putting in someone who has the same terrible views as a lot of the people that are already sitting on the court. So it doesn't, it only is a politics of like personal fulfillment and individual achievement versus something that would actually benefit the entire population. So great reporting on this. Sentenced a man to 12 years for selling eight ounces of weed. And this is now a top contender for Biden's pick for Supreme Court. We will stay on it. All right, guys, thanks so much for watching. We'll have more for you later. A massive rat infestation of thousands of rats has closed an Arkansas distribution center for family dollar, has triggered the recall of a whole range of products that were being sold in that store. Basically everything that was subject to FDA regulation,

we're talking medicine, pet food, and cosmetics. And has also forced the closure, temporary closure, of more than 400 family dollar stores in six different states. Let's go ahead and throw this tear sheet up on the screen. The details here are as disgusting as they could possibly be. This article says inspectors from the FDA wrapped up their investigation on

February 11th after finding, quote, live rodents, dead rodents in various states of decay, rodent feces and urine, evidence of gnawing, nesting, and rodent odors throughout the facility, not to mention dead birds and bird droppings. More than 1,100 dead rodents were found after the center was fumigated. And as if that's not all bad enough, the FDA said that they looked at the company's internal records and showed a history of infestation with more than 2,300 rodents collected there in just the last six months.

So, disgusting. Thousands of rats. 400 stores. Alive and dead at this distribution center serving 400 plus stores, nesting, gnawing, rodent odors throughout the facility. Gross. Well, the thing is, is that Family Dollar, people should remember, is actually used by a lot of people to buy groceries in rural areas.

And the reason why is that a lot of rural areas can't support a full grocery store. So then what happens is that the Family Dollar is the only place to buy any groceries. And then you end up buying things which are A, overpriced relative to what they would cost at a wholesale or at a grocery store. But second is that this is a main purveyor of food. So this is actually a big problem for obviously from a health perspective. I think one thing that a lot of people don't realize is how disgusting so much of not, I'm not saying family dollar it necessarily, but a lot of the food service industry is like the amount of rodents and cockroaches and things that are involved would make your stomach turn. I didn't even know about a lot of this until I read Anthony Bourdain's book.

And I remember being like, oh my God, I'm like, what are you people doing? You know what it made me think about is, first of all, it made me think about family dollar treats its workers terribly. I mean, these companies, all the dollar stores are just completely exploitative, both of their workforce, but also of their customers. They're the type of places that do really well when the economy is doing poorly. So they've thrived during the pandemic. Just as you say, low quality products, high costs, but you can get smaller quantities. So if you have just a little bit of money to spend and sometimes this is the only thing accessible in your area. Forget the numbers about it. It's like more dollar stores than there are.

McDonald's, Starbucks, all of these stores combined. So they're pervasive throughout rural America. I can tell you where I live. There's one. But the other thing that I thought of is, do you remember when we covered that story about the shrimp tails in the cinnamon toast? Oh, yeah. That's right right you went deep on that i did go deep on i i actually don't know whether it turned out to be real or fake right but one of the things that people theorized about what happened because okay i for you guys that don't remember the story man opens the box of cereal and there were uh like cinnamon toasted shrimp tails and pieces of string and some of the cinnamon toast crunch squares

had what looked like rat feces on it. That's right. And so what people were theorizing, if this turned out to be correct, because there were weird details about it too, that was like, can we really believe that this is actually happening? But what people theorized

is that a rat could have nested in some of the ingredients and this was like some of the things that they pulled into their nest so yeah it's really gross bottom line don't shop at family dollar because they apparently were well aware of this infestation they had removed 2300 rodents in six months but they're still like nah we're good until the fda came in and forced them to shut down so thank you you, FDA, for making that happen. Yes, for finally doing something. Indeed. All right, guys, and thank you for watching. We'll have more for you later.

Well, the Olympics have wrapped, and apparently so has the future of any future Olympics on television. Go ahead and put this up there on the screen. NBC ratings for the Winter Olympics are seen as a, quote, disaster for the network. This is from the Associated Press and Adweek over there, saying that the $7.75 billion deal that the U.S. media writes for the NBC paid for through 2032 have been a catastrophic failure for the company. Now, specifically, there were only 11.4 million viewers per night on average. That is a 9 million drop from the PyeongChang Games of 2018. So almost a 40% drop, complete fall off of a cliff. It has to do with a variety of things that they actually

point to. So some analysts say, well a variety of things that they actually point to. So some analysts say, well, part of it is geopolitics with China. I certainly think that's some of it. But I think a lot of it is just apathy to the idea of the world. There were no real stars there as well. It just seemed like one of those outmoded type things where, yes, the Olympics can occasionally capture kind of the spirit and all that. But right now, it's just a complete dud. Yeah. And I think, you know, I mean, for one thing, the Summer Olympics are always like we have more American stars there. And we get sort of more invested in it as a country. Then you have the time zone issues where, you know, a lot of the main events are happening effectively like overnight.

Every time I turned it on to see what was going on it was always curling which is like literally the most boring thing on earth to ever watch um but i thought huffington post had a road right up here they said these olympics were a disaster for the network a buzz-free hermetically sealed event in an authoritarian country a half day's time zone away where the enduring images will be the emotional meltdown of Russian teenagers after a drug-tainted figure skating competition and a bereft Michaela Schifrin sitting on a ski slope wondering what went wrong. That was very sad. So, oh, absolutely.

And what happened, I finally actually watched last night the Russian figure skater who was at the center of the controversy and she did her, I guess it was the free skate program where she had a bunch of falls and she's like devastated and she's getting screamed at. I mean, it's just horrific. It was painful to watch. So you had the time zone issues and then you have an Olympic Games that just didn't make for good television. At the same time that I think when the games are most sort of popular is when we're feeling the American patriotic spirit. Right now you look at like, what, 70, 80% of the country saying the country's

on the wrong track. There's this overarching sense of sort of like national decline and decay. And so it's hard to get super rah-rah-go Team USA when that's the mood of the public. No, that's an excellent point too. It's like whenever you don't have a lot of national pride, then you're not having a lot of pride in the Olympics. And that's, you know, that's ultimately what we see here. So you have a combination of factors. I mean, personally, I think it's a bit funny. I mean, I don't think we can emphasize enough to people how much the games meant to these networks. It was all in. It was a spectacle unlike the world had ever seen. And not even that long ago. Think about Rio. That was a huge thing. I mean, all the people who were down there. And then in the blink of an eye,

the world is changing dramatically whenever it comes to media. So a huge, catastrophic failure for NBC. Catastrophic. The other reason that this is significant is because as people have been cutting cords and moving towards streaming versus traditional television, one of the big bets that networks are placing is on live sporting events. So NBC paid $7.75 billion for the rights to the Olympics through 2032. And some analysts are saying, well, it's still a good bet overall because one of the only things that still gets people to consistently tune in to regular live TV is live sporting events. I'm just not sure that that holds as much for Olympics, though.

I agree. It's one thing watching the Super Bowl where you want to know live, you want to be engaged in the buzz and the online conversation that's happening in real time alongside that event. It's another thing for the Olympics where like, you know, you can go back after the fact. And if something extraordinary happens, you can watch it later or something, you know, dramatic happens. You can watch it later. There isn't the same level of sort of real time public conversation around events as they're happening right then. So even as they place this big bet on, you know, live sports as a way to hold on to their audience, it doesn't seem to be really panning out. Yep. Sorry, NBC. And Peacock apparently also was a big failure during the games.

Hate to see it. Sad for all of them. All right, guys, thanks for watching. We'll have more for you later. Very exciting partnership to announce here with James Lee of 5149. He's somebody that Crystal and I have followed on YouTube for a long time, and he's going to be doing some videos for us here. James, it is great to see you and introduce you to the audience. Thanks for joining us, man. Hey, thank you. Thank you for having me.

Absolutely. Why don't you just tell us a little bit about yourself? You and I talked a little bit about this previously before you decided to come on. Who are you? Why have you decided to make all these awesome videos on YouTube? I still have a day job, but I think it's really important that we all play a role, an active role in understanding the actors and levers that move our society to hold them accountable. So that's why I decided to start a YouTube channel where I talk about different topics relating to business, politics, society. I try to break down different issues to find out, you know, what's important, the context, the motives, the incentive structures that are happening in our society. You know, because I think there's a lot of what I would say manufactured outrage that happens in the legacy press that works to divide us. So just trying to add a voice in the opposite direction. So, you know, I think that, you know, kind of

maybe a lot of what you guys are all about. Yeah, it totally aligns with what we're all about, especially that idea of the citizen journalist, because, of course, core to our beliefs here is like the elites have gotten a lot of things wrong and yet they want to keep all the power to themselves. They want to tell the population like you can't possibly understand what's going on out there. Just let us handle it, whether it's the national security state, whether it's the Fed, whether it's any of the people who hold power here in this town. And what you're doing is a sort of direct response to that to say, no,

we can delve into these issues. We can understand what's going on. And there's huge stakes for all of us involved. And it's our responsibility to be engaged. So it's very much in line with what we're doing here. Full disclosure, the way that we found you was that you made a really lovely video about us and we're like, this is wonderful. My ego feels amazing right now. And then we watched the rest of your content and we're like, Oh, this guy is really great. And I think it's also fair to say, I mean, this isn't your main job, but you know, you're the type of creator that if you had started at a different time in YouTube's history, when it was more of a free and open marketplace, you would have grown phenomenally because the content you create is so high quality. It's so well researched. It's well edited.

It's well produced. It's well put together. You do a great job presenting the information. And yet YouTube is no longer a free and open marketplace. So we're hoping that, you know, for you, that it helps give a boost to your channel and what you're doing there because more people need eyeballs on, you know, you've got content, content here is Web3, a giant lie. Is the media tricking you into hating Joe Rogan? Starbucks, the fight is just beginning. So really great and important content. Hopefully we can give a lift to you. And I know our audience is going to love what you have in store for us. So with that being said, you have put together your first offering for our audience. Just talk to us about your inspiration and what they're about to see. Yeah. Well, thanks for all those really kind words. But yeah, so today's piece, I think to set it up a little bit, we've all seen corporations and how I think a lot of the behavior that they've been kind of, I would say, sorry.

It's okay. Just come out of the top. Just restart your answer. Okay, restart the answer. Okay, sorry. Yeah. I knew that was going to happen at some point. Okay. It's all right. Yeah. All right.

Well, thank you so much for all the kind words there. So today's piece that I have for you guys is about, you know, to set it up a little bit of the context is I would deem corporations, a lot of their behavior is being evil, greedy. I'd say maybe anti-humanity. And I just wanted to delve into more of why that's happening. And something that I wanted to look into was the MBA program, which a lot of Fortune 500, S&P 500 CEOs have. And I think that deserves a you guys a little bit of the behind the scenes of maybe why corporations are potentially becoming more evil based on the education that these executives are receiving. I love it. I love that. Yep. James, very excited to have you on board. Can't wait to watch this video. Is the MBA program training our corporate elites to be sociopaths? Yes. Let's take a look. My name is James Lee. Welcome to 5149. And today I want to talk about the MBA program

and why it's contributing to corporations becoming more evil. We've all seen or read the recent headlines. Business is booming. Corporate profits are at an all-time high. But at the very same time, workers who make those businesses run are being left behind, some even homeless, on food stamps, or working multiple jobs. Also, recent upticks in high-profile worker unionization efforts have corporations like Amazon scrambling to pay big bucks for, quote, union avoidance. A recent analysis estimated that private sector employers spend nearly $340 million per year hiring union avoidance advisors to help them prevent employees from organizing in the workplace. Cricket stuff to say the least. But interestingly, it hasn't always been this way. In 1951, General Motors hired McKinsey consultant Arch Patton to conduct a study of executive compensation. The results appeared

in Harvard Business Review with the particular finding that from 1939 to 1950, the pay of hourly workers had more than doubled, while that of top management had only risen 35%. There are, of course, many reasons for this shift. We've seen massive consolidation in most major industries since deregulation began in the 1970s, which has concentrated power in the hands of just a few mega corporations. Also, our lawmakers are in the pockets of big business special interests, as corporations and other wealthy donors can influence public policy by contributing more or less unlimited sums into political campaigns via things like super PACs

and other dark money organizations with even less transparency. We've also seen the working class gutted by a bipartisan neoliberal consensus towards globalization and union busting, which subsequently has brought union membership to all-time lows and has also crippled domestic production. But in the end, if we break it down, corporations are just people, people making choices and decisions. And those choices and decisions that they make could end up shaping the economy and are heavily influenced by factors such as education, training, and incentives. And that's what I want to focus on here today. According to Fortune Magazine, about 40% of S&P

500 CEOs have an MBA in any given year. Just a bit of background, the MBA is what's known as a master's in business administration and is the most common and prestigious advanced degree for those looking to get ahead in corporate America. Many elite universities have one of these programs with tuitions costing students tens of thousands of dollars annually with the hope that this investment will pay off in the form of a wide professional network and a good paying job. The MBA is basically a prerequisite to C-suite offices at this point, as it is by far the degree with the most representation among top business executives. And I'm one of these people. Not a corporate executive, of course,

but I am a graduate of New York University's Stern School of Business MBA program. So what are people like me, the quote, future business leaders of America, who could end up shaping the economy as well as the fortunes of millions of Americans, what are we being taught? Well, to start, everything that is taught in any top-tier MBA program today

is more or less filtered through the lens of an ethos that is summed up quite well by this 1970 headline of this New York Times Magazine article written by the famed American libertarian economist and statistician Milton Friedman, and that headline is entitled The Social Responsibility of Business is to Increase Its Profits. It's every keen, aspiring business executive's guiding light. Of course, yes, our curriculum does consist of core courses like finance, accounting, marketing, and business strategy, along with other elective courses that focus on different industries like entertainment, media, fintech, private equity,

and many others. But every subject, every case study seems to always boil down to this fundamental principle, this idea that management's sole duty is to maximize shareholder value with zero, or at the very least, minimal regard for workers, communities, country, environment, or anything else for that matter. But once again, it wasn't always this way as history can show us. Harvard Business School, the first graduate business program, was founded in 1908 with the mission to treat business as a science, create a management profession on par or superior to medicine and law, and handle business problems in a socially constructive way. The first dean of HBS, Wallace B. Donham, defined it as, quote, the development, strengthening, and multiplication

of socially-minded businessmen as the central problem of business. Kind of a far cry from where we are today and the, quote, business leaders being churned out by elite MBA programs. So how exactly did advanced business education go off the rails, so to speak? Well, looking at this graph depicting the Dow Jones Industrial Average through the decades, U.S. businesses suffered through a long period of economic stagnation during the 1970s and early 80s, and this brought about sort of a thorough critique of American management, including American business education, a very kind of dramatic shift in narrative. I want to read to you a little bit from an article entitled How Neoclassical Economics

Corrupted Business Schools, Corporations, and the Economy by Herbert Gintis and Rakesh Kurna, two prominent business scholars. Quote, using the poor corporate performance of the 1970s as their backdrop, these takeover artists successfully recast the image of corporate managers and executives not as wise corporate statesmen trying to adjudicate the competing concerns of a variety of corporate constituents, but rather as a self-dealing, unaccountable elite whose primary interest was taking advantage of weak shareholders to promote a leisurely lifestyle and exaggerated material gain. I think it's a little bit funny, this image of a weak and impotent shareholder class. It does kind of show you how powerful a narrative can be if effectively sold to the public,

particularly by elites who would happen to benefit greatly from the implementation of such an ideology. Oh, golly, the abuses us shareholders take from managers and workers. What a travesty. Back to Gintis and Corona. Quote, the revisionism surrounding materialism that took place during the 1980s had a profound impact on business education. It represented an institutional shift

away from the basic managerialism framework that had defined and informed business education and animated the managerial professionalization project from its start, eventually replacing it with a new conception that is never fully specified, but whose broad outlines can be understood as a conception of management as an agent of shareholders, the corporation as a nexus of individual contracts, and the primary purpose of the corporation being to maximize shareholder value. All right, you might be thinking, what's wrong with that? You know, we are running a business after all, and I don't necessarily disagree. It is important that a business make money so that it can pay its employees,

make good products, invest in new things, new products, give back to the community, and make sure that shareholders are happy so they're going to invest more money in the future. But if we're talking about a holistic, socially responsible business education that teaches future leaders to consider other goals besides profit maximization, this is not it whatsoever. Now, the next thing I'll share with you is purely anecdotal, but my business strategy professor at NYU and a lecturer I remember really well brought up this example of Shake Shack and how the tables in their new restaurants were sourced from recycled wood. And she talked about how stupid the whole thing was because she felt that furnishing their restaurants with recycled wood would not help them sell more burgers and fries. And that, you know, with each new store they were opening, they were lowering

their return on invested capital, a financial metric that Wall Street investors happen to care a lot about. She doesn't say wrong in that regard. Buying recycled tables probably won't help Shake Shack sell more burgers and fries, and will most certainly be more expensive than a normal non-recycle table, but it is most certainly better for the environment. And especially considering Shake Shack has opened hundreds of new locations and stores in just the past few years, they seem to be doing just fine as is. In another course at NYU called Managing Growing Companies, a course that, quote, seeks to provide an understanding of the knowledge and skills that are required to manage and grow

small to mid-sized firms, we actually had an entire lecture dedicated to union busting, various tactics management can and should take to end a labor strike. A particular example I remember specifically is something to the effect of training your white-collar workers to perform blue-collar tasks. And folks, we just saw how this strategy was just used by John Deere in real time when workers were striking for better wages. The white-collar workers ended up being a total disaster. A few of them were even sent to the hospital. So right there, even in an academic setting, a wedge is already being driven between management and labor, creating this kind of us versus them mentality at a very early stage in the careers of people who aspire to be business managers and executives. And this has real world life and death implications for management workers, but also for consumers. I'll give you an example, referencing an article from The Atlantic entitled, The Long Forgotten Flight

That Sent Boeing Off Course. A company once driven by engineers became driven by finance. Essentially two decades ago, Boeing made a deliberate attempt to isolate the company's engineers from its executive team by moving the company's headquarters to Chicago, which is over 1,700 miles away from its primary manufacturing facility in Washington. And just like what we're trained to do in business school, which is to pour over Excel spreadsheets and make fancy PowerPoints, over the years, Boeing executives started making engineering decisions by way of financial spreadsheets in a vacuum completely separate from the company's manufacturing operations. In the case of their 787 plane, Boeing didn't outsource just the manufacturing of the parts.

It turned over the design, the engineering, and the manufacture of entire sections of the plane to some 50 strategic partners. Boeing itself ended up building less than 40% of the plane to some 50 strategic partners. Boeing itself ended up building less than 40% of the plane. This strategy was trumpeted as a reinvention of manufacturing, but while the finance guys loved it, since it meant that Boeing had to put up less money, it was a huge headache for engineers. As a result, to this day, the plane has continued to suffer from numerous safety and manufacturing quality issues, all in an effort to make an extra buck with, you know, kind of very little consideration for anything else. The most famous example and one with the most dire of consequences is probably the 737 MAX plane with hundreds of deaths resulting from a safety system

being vetoed, according to a Boeing engineer. This is New York Times reporting, quote, a senior Boeing engineer filed an internal ethics complaint this year saying that during the development of the 737 MAX jet, the company had rejected a safety system to minimize costs, equipment he felt could have reduced risks that contributed to two fatal crashes. So right, there are real world societal life and death implications resulting from the type of business training and the, you know, in my opinion, unhealthy shareholder maximizing ethos that is so pervasive in the curriculum of top tier MBA programs and thus also permeating offices and boardrooms of America's top companies. And unfortunately, there is little to no penalty for this type of behavior. Let's remember that the US government routinely gives companies like Boeing billion-dollar government contracts as part of our defense budget, no matter how unsafe or unethical their practices might be. Duff McDonald, who wrote the book, The Golden Passport, Harvard Business School, The Limits of Capitalism and the Moral Failure of the MBA Elite, asserts that, quote, the school is a force for good in a sense that HBS grads are good at what they do, but they rarely do good.

Rather than producing business physicians who vow to do no harm, Harvard Business School has become the West Point of capitalism, producing business mercenaries driven by self-interest, beholden to no one, believing in nothing. That's pretty scathing. And to be fair, MBA programs have responded to this type of widespread criticism by adding a sort of business ethics course to the curriculum. I myself took one at NYU, actually with Professor Jonathan Haidt. Some of you probably have heard of him. He's a fairly well-known social psychologist whose works includes The Coddling of the American Mind and also The Righteous Mind, Why Good People Are Divided by Politics and Religion. And his course, you know, quite honestly, was super cool, very interesting discussions, but it was also extremely brief, lasting, you know, just a few sessions over the course of two weekends, which does kind of show the priorities of the curriculum, right? Like I said, I found the

discussion to be really interesting, but unfortunately, the course design itself felt more like, I think, compliance, maybe even call it theater more than anything else. But just to give the other side, if you're watching this and you recently got your MBA, you might totally disagree with everything I'm saying. My education was holistic. We learned about ideas like stakeholder capitalism, which is something that's currently being promulgated by the Business Roundtable.

And to that, I say, yes, we definitely did talk about those types of things. Specifically at NYU, there was this phrase that was thrown around a lot, that we are in, quote, the business of doing good. So I think the intent might be there, but unfortunately, the incentive structure can't possibly support this in practice. NYU, for example, talks a big game when marketing its MBA programs with inspirational slogans like

change, innovation, an MBA without boundaries. But if you take a look at the program's most recent employment report, more than two thirds of the graduating class are recruited into traditional industries like consulting and financial services. You know, definitely, you know, this is once again, my opinion, but not at the top of my list of professions in the business of doing good or changing the world. This is just my personal experience, but I went in, I think, with an open mind, quite an idealistic goal that I could work in maybe news media with the goal of changing public discourse for the better. But within two weeks, I was told pretty much, you know, you can either work in consulting, banking or for Amazon. That is it. There are, of course, exceptional people who are able to carve their own path. But I was not one of them, maybe until now.

And like anything else, the recruiting funnel 35% to each school's overall rank in the U.S. News and World Report ranking methodology, which is kind of seen as the gold standard for MBA rankings. So, of course, the school's administrators are going to push you towards jobs that uphold the nothing is going to fundamentally change ethos that seems to pervade our modern day business and political culture. And just to be fair to the students, if you strap them with hundreds of thousands of dollars of debt, they're not going to be able to take the kinds of risks that are being advertised by top tier MBA programs with this idea of change and entrepreneurship. So I guess what I'm pointing out is that there is this huge disconnect between what is being marketed and what actually transpires in reality because, you know, the incentive structures are so poorly designed that anything other than propping up the currently unhealthy and unsustainable status quo can't possibly exist even in an academic setting, let alone real world business situations that will

impact the lives of millions of people. This is a little bit of a joke, but it's really not. But it's like business schools are training students to think of everything in terms of return on capital. And if you can maximize returns without screwing over people, ignoring morals and destroying the environment, you should. But if you can't, it's also okay to screw over people, ignore morals and destroy the environment for the sake of even the slightest increase in profits. So in a world where CEOs and executives make millions, even as their companies file for bankruptcy, I maybe naively think that it might behoove us to think about whether the system and values we teach today will help create a world we want to live in tomorrow. Today's MBA programs work a lot like factories churning out middle to upper management professionals and managers who

are becoming increasingly more diverse in the way they look, but unfortunately not in the way they think, right? I think it's kind of ironic that business schools often talk a lot about the importance of relationships, things like innovation, social responsibility, but at the same time are still very intolerant of ideas that deviate from traditional business orthodoxy and pretty much train their students to function like Excel spreadsheets. More numbers and screens and less humanity and empathy. And that, my friend, is how the NBA has contributed to corporations becoming more evil. If you like this segment and would like to see more of me and other collaborations like this, please let Crystal and Sagar know. And of course, subscribe to Breaking Points.

If you're inclined, also check out my channel, 5149 with James Lee, where I release weekly videos about business, politics, and society. Thank you so much for your time today. This is an iHeart Podcast.