Are Harvard Grads Predictors of Financial Crises?
Statistics show predicting market bubbles is as easy as following the job patterns of recent Harvard grads.
What's the Latest?
If you're still smarting from the 2007-08 financial crisis and are wary about reinvesting, feel free to take solace in the fact that Harvard graduates are steering clear of Wall Street. This is because there are statistics that show correlations between dangerous bubbles and spikes in recent Harvard grads who go into finance. The Harvard M.B.A. Indicator, a bellwether created by former banking analyst (and Harvard Business alum) Ray Soifer, reports that 41% of 2008 Harvard Business school graduates took market-sensitive jobs in the financial sector. Other high-percentage points include 1987 and 2002, years that also saw markets tumble.
What's the Big Idea?
The idea behind the Harvard M.B.A. Indicator is stunningly simple and speaks highly of the quality of graduates coming out of America's oldest institution of higher learning. The basic principle: Harvard grads have their pick of the cuts when it comes to careers and will choose the fields that appear to offer the most rewards. When Wall Street money keeps getting better and better (as the result of years of unsustainable financial prosperity), you can be sure Harvard grads will be drawn to the finance sector. But like shipwreck victims who all swim toward the biggest piece of debris, the Harvard grads tend to be felled by their collective weight. Just as that piece of debris will undoubtedly sink, the market bubble will undoubtedly burst. If you want to spot the bubble before it pops, be sure keep an eye on those Harvard swimmers.
That said, it's important to note that correlation does not mean causation and it would be silly to interpret these statistics in such a way as to assign blame. Still, it certainly would be convenient to be able to just pin all our nation's woes on our friends from Cambridge, right?
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- How do we get out of this rut? One way is to bring play and game mechanics into workshops. When we approach problem-solving from a perspective of fun, we lose our fear of failure, allowing us to think boldly and overcome built patterns.
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- Overall, about 80 percent of Americans support equal rights for LGBTQ people.
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