What is the point of accumulating a $40 billion endowment if it’s to fire your most vulnerable workers as soon as a crisis hit?

Harvard is laying off nearly all dining workers. While the univ. has agreed to provide 30 days’ pay for the directly hired dining workers who work at the College, they are refusing to provide this pay for the subcontracted dining workers at @Harvard_Law actionnetwork.org/petitions/harv
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6:05 PM · Mar 21, 2020Twitter Web App

When Pete Buttigieg Was One of McKinsey’s ‘Whiz Kids’

Among the hoops that candidates for plum consulting jobs at McKinsey & Company had to jump through in late 2006 was a bit of play acting: They were given a scenario involving a hypothetical client, “a business under siege,” and told they would be meeting with its chief executive the next day. How would they structure the conversation?

One contender stood out that year: a 24-year-old Rhodes scholar named Pete Buttigieg.

“He was the only one who put all the pieces together,” recalled Jeff Helbling, a McKinsey partner at the time who was involved in recruiting. Mr. Buttigieg soon won the other candidates over to his approach.

[Read: Pete Buttigieg vs. Bernie Sanders and Elizabeth Warren on tuition-free college.]

“He was very good at taking this ambiguous thing that he literally had no background on and making sense of it,” Mr. Helbling said. “That is rare for anyone at any level.”

The preternatural poise that got Mr. Buttigieg hired at McKinsey has helped him rise from obscurity to the top tier of the 2020 Democratic primary presidential contest.

On the way there, he ticked all the boxes. Harvard. Rhodes scholar. War veteran. Elected mayor of a midsize city before age 30.

Mr. Buttigieg sells his candidacy, in large part, on his mayoralty of South Bend, Ind., and a civic revitalization there rooted in the kind of data-driven techniques espoused by McKinsey. His nearly three years at “the firm” set him apart from many of his campaign rivals, underpinning his position as a more centrist alternative to progressive front-runners like Senators Bernie Sanders and Elizabeth Warren.

Yet Mr. Buttigieg’s time at the world’s most prestigious management-consulting company is one piece of his meticulously programmed biography that he mentions barely, if at all, on the campaign trail.

As Mr. Buttigieg explains it, that is not a matter of choice. For all of his efforts to run an open, accessible campaign — marked by frequent on-the-record conversations with reporters on his blue-and-yellow barnstorming bus — McKinsey is a famously secretive employer, and Mr. Buttigieg says he signed a nondisclosure agreement that keeps him from going into detail about his work there.

But as he gains ground in polls, his reticence about McKinsey is being tested, including by his rivals for the Democratic presidential nomination. Senator Warren, responding last month to needling by Mr. Buttigieg that she release more than the 11 years of tax returns she already had to account for her private-sector work, retorted, “There are some candidates who want to distract from the fact that they have not released the names of their clients and have not released the names of their bundlers.”

Beyond Mr. Buttigieg’s agreement with McKinsey, this is something of an awkward moment to be associated with the consultancy, especially if you happen to be a Democratic politician in an election year shadowed by questions of corporate power and growing wealth inequality. The firm has long advocated business strategies like

  • raising executive compensation,
  • moving labor offshore and
  • laying off workers to cut costs.

And over the last couple of years, reporting in The New York Times and other publications has revealed episodes tarnishing McKinsey’s once-sterling reputation: its work advising Purdue Pharma on how to “turbocharge” opioid sales, its consulting for authoritarian governments in places like China and Saudi Arabia, and its role in a wide-ranging corruption scandal in South Africa. (All of these came after Mr. Buttigieg left the firm.)

Just this week, ProPublica, copublishing with The Times, revealed that McKinsey consultants had recommended in 2017 that Immigration and Customs Enforcement cut its spending on food for migrants and medical care for detainees.

After a campaign event on Wednesday in Birmingham, Ala., Mr. Buttigieg remarked on the latest revelations. “The decision to do what was reported yesterday in The Times is disgusting,” he said. “And as somebody who left the firm a decade ago, seeing what certain people in that firm have decided to do is extremely frustrating and extremely disappointing.”

The Buttigieg campaign says he has asked to be let out of his nondisclosure agreement so he can be more forthcoming about that formative time in his life. A McKinsey spokesman said Mr. Buttigieg “worked with several different clients” during his time with the firm, but “beyond that, we have no comment on specific client work.”

But interviews with six people who were involved in projects that Mr. Buttigieg worked on at McKinsey, along with gleanings from his autobiography, fill in some of the blanks.

Mr. Buttigieg was recruited by McKinsey at Oxford. The company seeks out Rhodes scholars like him, banking that their intellects will make up for their lack of M.B.A.s from traditional recruiting grounds like Harvard Business School.

Yet even during the recruitment process, Mr. Helbling recalled, Mr. Buttigieg made it known that, like many applicants, he saw the business experience on offer at McKinsey as a good job “in the near term,” in his case an asset on the way to a career in public service.

The work he did in his first year and a half at the firm — nearly a 10th of his adult life — is effectively a blank slate, though tax records give some hints. In 2007, his first year with the company, he filed tax returns in Illinois, where he worked out of the Chicago office, as well as in his home state of Indiana. But he also filed in Michigan, and in the city of Detroit, where he worked on a McKinsey project. In 2008, he filed a return in Connecticut (McKinsey has an office in Stamford). The next year, he filed in Connecticut and in California.

In early 2009 Mr. Buttigieg was spending his days, and many nights, in a glass-walled conference room in suburban Toronto. He was analyzing Canadian grocery prices, plugging the numbers into a database running on a souped-up laptop his colleagues nicknamed “Bertha.” PowerPoint slides and spreadsheets crept into his dreams.

He knew this wasn’t his calling.

“And so it may have been inevitable that one afternoon, as I set Bertha to sleep mode to go out to the hallway for a cup of coffee, I realized with overwhelming clarity the reason this could not be a career for very long: I didn’t care,” Mr. Buttigieg wrote in his autobiography, “Shortest Way Home.”

It was the only experience at McKinsey that Mr. Buttigieg wrote about in any detail. His next act at the firm didn’t merit a single complete sentence in the book. But it was a radically different, and for him far more interesting, public-spirited project: More than four years before he would be deployed as a Navy Reserve officer, he was heading to Iraq and Afghanistan.

McKinsey’s focus in Iraq during the latter part of George W. Bush’s presidency and the early years of Barack Obama’s was to help the defense department identify Iraqi state-owned enterprises that could be revived. The idea was to provide employment for men who might otherwise join the insurgency against the American-led occupation.

The McKinsey consultants on the ground in 2006 and 2007 were almost exclusively military veterans like Alan Armstrong, who flew fighters for the Navy and had an M.B.A. from the Wharton School at the University of Pennsylvania. Mr. Armstrong, in an interview, said that while the reasoning behind the program was sound, the ongoing insurgency and a crippled infrastructure — electricity, for example, was spotty or nonexistent — made execution very difficult.

But the program was popular among the top brass at the Pentagon. In 2006, the defense secretary, Donald H. Rumsfeld, met with the team in Iraq and asked about the “whiz kids” from McKinsey, which struck Mr. Armstrong as an obvious parallel to the Vietnam War era, when whiz kids of an earlier generation had worked for another defense secretary: Robert S. McNamara.

“McKinsey was more than willing to play along — they were being paid extraordinary rates to keep playing,” Mr. Armstrong said.

Another former McKinsey consultant who worked in Iraq recalled a surreal moment preparing a PowerPoint presentation while on a convoy to a shuttered food-processing factory, under the watchful eye of a burly private security guard. “It felt like we were completely half-assing everything — it wasn’t particularly effective,” he said.

Other former McKinsey consultants who worked on the Iraq project, Task Force for Business and Stability Operations, have a more positive recollection of the firm’s work.

“Over all I’m very proud of it,” said one consultant, who had met Mr. Buttigieg in Washington, where most of the McKinsey consultants assigned to the project worked when not visiting Iraq. Four of the six former McKinsey employees spoke on the condition that their names not be used, citing confidentiality agreements or the press policies of their current employers.

ImagePete Buttigieg’s living quarters in Baghdad, where he recalls spending two nights in 2009.
Credit…Buttigieg campaign

By 2009, the security situation in Baghdad was stable enough that McKinsey allowed in some nonveterans like Mr. Buttigieg, who had studied Arabic at Harvard. He went to Iraq aware of the stark similarities between the American experiences there and in Vietnam decades earlier.

At Harvard, his senior thesis had drawn parallels between the United States’ seeking to “save” Vietnam from “godless Communism,” and the 17th-century Puritan ministers who had come to America to civilize “savage lands.” In his autobiography and in an interview that has drawn charges of out-of-touch elitism from some quarters, he reflected on that history by quoting a passage from “The Quiet American” by Graham Greene: “Innocence is like a dumb leper who has lost his bell, wandering the world, meaning no harm.”

“I had protested the Iraq war,” Mr. Buttigieg said in an interview with The Times. “But I also believed that it was important to try to do my part to help have good outcomes there.” He found echoes, he said, of “the stories I had studied about well-intentioned Americans sometimes causing as many problems as they addressed.”

Mr. Buttigieg recalled spending only two nights in Baghdad, where McKinsey consultants were quartered in a building near the Tigris River, and “going to a ministry.” He never left the city during his time there, he said.

“Remember I’m like the junior guy, kind of new,” Mr. Buttigieg said. “It’s not like I was the one whose expertise was needed to sort out what was going on in the provinces.

“Eventually I knew what I was doing a little more and was more useful by the time I got to the Afghan side.”

Mr. Buttigieg spent more time in Afghanistan. While Iraq had a fairly well-educated populace, a modern road system and large oil revenues, Afghanistan was far less developed. But the mission was similar: identify small and medium-size businesses to nurture so that they could employ Afghans, providing an attractive alternative to joining the Taliban while fueling economic growth.

Citing his nondisclosure agreement, Mr. Buttigieg declined to specify in the interview what he had worked on, though he mentioned having looked at opportunities in the agricultural industry — onions, tomatoes, olive oil — as well as paint manufacturing.

“They had some things to work with,” he said, “but would have benefited from support on things like business planning, more resources on how to plug in and eventually connections to markets too.”

In the years after Mr. Buttigieg left McKinsey, that program came under criticism from the Special Inspector General for Afghanistan Reconstruction. McKinsey had been awarded $18.6 million for the project, but the watchdog wrote in an April 2018 report that it had been able to find just one piece of related work product: a 50-page report on the economic potential of the city of Herat.

A former McKinsey consultant who worked in Afghanistan described a more extensive McKinsey presence there, involving work in the mining industry and a government transparency project, along with the Herat study.

“One of those sounds just exactly like what I was doing,” Mr. Buttigieg said. When asked which one, he said, “I can’t think of a way to answer that without getting in trouble with the N.D.A.”

Mr. Buttigieg’s work on the Afghanistan project ended in late 2009, close to the time he was commissioned as an officer in the Navy Reserve. And that October, when he was still several months from leaving McKinsey, he set in motion the next phase of his life: He registered as a candidate for office with the State of Indiana.

The next year, he lost a bid for state treasurer, after emphasizing his McKinsey experience during the campaign. (He recounted at one campaign event that after his Rhodes scholarship, “I came back and went into business, and I worked for a company where my job was to do math. I’m a card-carrying nerd.”) In 2011, at age 29, he was elected mayor of South Bend.

Mr. Buttigieg at a campaign event in Iowa last month.
Credit…Tamir Kalifa for The New York Times

The full range of Mr. Buttigieg’s work at McKinsey isn’t clear, though in his autobiography he says that he worked on other projects, including “energy efficiency research” to help curb greenhouse-gas emissions for a client he didn’t name. He also found time in the summer of 2008 to travel to Somaliland, the autonomous region in the Horn of Africa. He went as a tourist, but while there talked to local officials and wrote an account of his experience for The International Herald Tribune.

Mr. Buttigieg has been asked on the presidential campaign trail about his time at McKinsey and, in several interviews this year, has sought to reconcile the company’s recent troubles with his own work there.

For Mr. Buttigieg, the solution to McKinsey’s ethical pitfalls may come in a rethinking of the rules that business abides by. Maximizing shareholder value, the North Star of modern American capitalism, has a downside when the rules of the game leave many people worse off, he said.

“The challenge is that’s not good enough at a time when we are seeing how the economy continues to become more and more unequal, and we are seeing the ways in which a lot of corporate behavior that is technically legal is also not acceptable in terms of its impact,” he said. “There has got to be a higher standard.”

Reading Michelle Obama’s “Becoming” as a Motherhood Memoir

In some ways, Obama’s desires for a stable home and family are quite conventional, and she uses the conventionally feminine, domestic metaphor of knitting to describe them. “We were learning to adapt, to knit ourselves into a solid and forever form of us,” she writes of the first months of her marriage to Barack. It isn’t easy: in the Robinson-Obama union, the South Side power-walker meets the Hawaii-born ambler; the meticulous planner and striver with an “instinctive love of a crowd” and a desire for family must adapt to the messy, cerebral dreamer who loves solitude and books at least as much as he loves people. Later, the woman who loathes politics must throw her life into her husband’s pursuit of the Presidency.

Things are complicated long before the campaign, as children both complete and unsettle the Obamas’ carefully cultivated “us.” Once Obama gets pregnant, through I.V.F., her resentment at Barack’s distance from the pain of miscarriage and needles gives way to feelings of maternal pride. Upon Malia’s arrival, she writes, “motherhood became my motivator”—yet, three years (and almost twenty pages) later, she is most galvanized by her new full-time job, at the University of Chicago Medical Center. Although she considers staying home when Sasha is born, she instead takes the job, which “[gets her] out of bed in the morning,” though Barack’s comparative absence, as a commuting state and U.S. senator, gets her home in time for dinner. Then, just as Sasha is about to start elementary school and Obama is “on the brink of . . . [firing] up my ambition again and [considering] a new set of goals,” it is decided that Barack should run for President.

Michelle is still driven, but now by a desire not to fail Barack’s growing base of supporters. In an effort to “earn” public approval, she talks a lot about her kids while campaigning—a safe subject for a black woman who was framed in negative contemporary press accounts as an unpatriotic shrew. As the Obamas near the Iowa primaries, Michelle’s growing commitment to Barack’s cause is reflected in her language. Her pronouns shift from “him” to “we”—“Our hopes were pinned on Iowa. We had to win it or otherwise stand down”—and she adopts Barack’s own sermonic listing mode, describing meetings with voters “in Davenport, Cedar Rapids, Council Bluffs . . . in bookstores, union halls, a home for aging military veterans, and, as the weather warmed up, on front porches and in public parks.” Her rhetoric itself knits her and Barack into a “we.”

The book as a whole, however, represents a different moment, and announces her ambition to tell her story in her own way. A long memoir by any measure, “Becoming” not only matches the length of Barack’s first book, “Dreams from My Father,” but it also shows Michelle to be a better storyteller than her husband—funnier, and able to generate a surprising degree of suspense about events whose outcomes are a given (the results of Barack’s first run for President, for instance). Having devoted herself to strategically remaking the office of First Lady, through such initiatives as the White House garden and Let Girls Learn, she now reflects on what she has done and who else she might want to become.

Of course, the choices she makes throughout—to focus more and less on work, more and less on family—are a function of privilege. It is a privilege to decide how much or whether to work, and a privilege to have children, whether through I.V.F. or otherwise. The ability to steer one’s own ship also relies on the sheer luck of evading any number of American disasters: layoffs, mass shootings, prison, domestic violence, lack of health care. Then there are the disasters perpetrated by the U.S. surveillance state, which can undo black women, such as Sandra Bland, or their children, such as Kalief Browder. Under these conditions of hypervisibility, no amount of strategic maneuvering can guarantee one’s safety. And, in light of this, the Obamas’ faith in the American system, and in electoral politics, can seem woefully insufficient.

It comes as something of a relief, then, that, even as Michelle seeks to bind her own story to that of her husband and, through him, to that of the nation, the story of her mother, Marian Robinson, hints at an exit. Robinson is a willfully marginal figure in the text, as she was in the White House—famously reluctant to move in, and evasive of its basic security protocols. She gave everything to her kids (“We were their investment,” Michelle writes of her parents’ devotion to their two children) and stood by her husband, Fraser Robinson III, while multiple sclerosis drained him of strength. And yet, it turns out, she harbored fantasies of leaving. It is here that Obama’s portrait of her mother grows most vivid: “Much later, my mother would tell me that every year when spring came and the air warmed up in Chicago, she entertained thoughts about leaving my father. I don’t know if these thoughts were actually serious or not. . . . But for her it was an active fantasy, something that felt healthy and maybe even energizing to ponder, almost as ritual.” Obama sees this ritual as an internal renewal of vows for Marian, akin to how doubts about God might be said to bolster one’s faith. But the fantasy also represents a wholly other possibility: not a knitting-together but an unfurling, a quiet dream of escape.

The BuzzFeed Layoffs as Democratic Emergency

Digital media has always been a turbulent business, but last week’s layoffs suggest a reason for panic.

The cause of each company’s troubles may be distinct, but collectively the blood bath points to the same underlying market pathology: the inability of the digital advertising business to make much meaningful room for anyone but monopolistic tech giants.

.. In the troubles at Verizon, we see a behemoth that tried to take on Google and Facebook. Under a former executive, Tim Armstrong, the phone company bought up Yahoo and other media brands as useful pawns in a strategic war against internet giants. For similar reasons, Comcast has also plowed money into media start-ups.

But Verizon quickly learned that Facebook and Google are insurmountable. When new management took over last year, it began dumping the news in favor of readier ways to make money.

.. It’s the cuts at BuzzFeed that sting most. You may regard the site as a purveyor of silly listicles and inane quizzes. I think of it as a relentlessly experimental innovator: It’s the site that gave us The Dress and published The Dossier, a company that pushed the rest of the industry to regard the digital world with seriousness and rigor.

More than anyone else in media, BuzzFeed’s founder, Jonah Peretti, bet on symbioses with the tech platforms. He understood that the tech giants would keep getting bigger, but to him that was a feature, not a bug. By creating content that hooked into their algorithms, he imagined BuzzFeed getting bigger — and making money — along with them.

At the least, the layoffs suggest the tragic folly of Mr. Peretti’s thinking. Google and Facebook have no economic incentive for symbiosis; everything BuzzFeed can do for them can also be done by the online hordes who’ll make content without pay.

So where does that leave media? Bereft.

It is the rare publication that can survive on subscriptions, and the rarer one that will be saved by billionaires. Digital media needs a way to profitably serve the masses. If even BuzzFeed couldn’t hack that, we are well and truly hosed.

The Breakdown of the Capital-Labor Accord and Okun’s Law

we talk a lot about the “post-war capital-labor accord” and the golden age of the 1940s-1970s. In these years, inequality went down, unions flourished, civil rights laws were passed along with LBJ’s Great Society programs like Medicare, etc. Corporations saw themselves as not just profit-seeking nexuses-of-contracts but also as institutions with duties to their stakeholders – employees, local community organizations, etc.

.. Then everything went to hell in the 1970s. Oil shocks, poor economic performance, large increases in foreign competition, an overheated economy created by the meeting of increased social spending and increased military spending, all combined to create massive inflation and other sorts of economic upheaval.

.. union contracts were blamed for causing inflation and big business began to push for

regulatory changes (to fight the hated EPA and OSHA, along with unions) and increased layoffs.

Institutional investors, growing rapidly in size in part *because* of the prosperity of the “golden age” (e.g. the massive pension funds like CALPERS and TIAA-CREF), began to demand discipline from corporations unused to having to listen to anyone

.. Changes in financial regulations and institutions made possible the junk bond market and, in turn, a more active market for corporate control – suddenly, large firms that were used to making acquisitions became targets.

.. by the mid-1980s, the golden age had ended along with the capital-labor accord and something new had begun – perhaps we can call it the “neoliberal era

.. This era’s hallmarks include the dramatic decline in unions, massive increases in the share of wealth going to the top 1% and .1% (cf. Piketty and Saez), massive increases in the share of profits going to finance (cf. Krippner 2005), and an overall change in the way that corporations perceived themselves.

.. No longer institutions with obligations beyond profit-seeking, corporations became (thought of as) legal fictions that served the sole purpose of maximizing shareholder value

.. The old dominant strategy of firms was to “retain and reinvest”, the new mantra was to “downsize and distribute

.. The old model of the firm was GM – a massive, vertically integrated institution that dominated a market and did everything in-house. The new model was the “Original Equipment Manufacturer” (OEM), a firm like Nike that designs a product and markets it but outsources and off-shores as much of the actual producing, distributing, etc. The firm is now a brand, an identity demarcating a certain set of contracts, whose value is more about intangibles than men and machines.

.. Okun’s Law is an economic relationship between the magnitude of an economic downturn (in terms of real GDP) and increases in unemployment

..  if GDP (production and incomes, that is) rises or falls two percent due to the business cycle, the unemployment rate will rise or fall by one percent. The magnitude of swings in unemployment will always be half or nearly half the magnitude of swings in GDP.

.. The last downturns – 1991ish, 2001ish and the current moment – have all been characterized by “jobless recoveries” or, more broadly, much larger decreases and much smaller increases in unemployment than would be predicted by Okun’s law.

.. “businesses will tend to “hoard labor” in recessions, keeping useful workers around and on the payroll even when there is temporarily nothing for them to do”.

.. Manufacturing firms used to think that their most important asset was skilled workers. Hence they hung onto them, “hoarding labor” in recessions. And they especially did not want to let go of their prime productive asset when the recovery began. Skilled workers were the franchise. Now, by contrast, it looks as though firms think that their workers are much more disposable—that it’s their brands or their machines or their procedures and organizations that are key assets.

.. The 1980s saw a reordering of the world – a transition from a period governed by one set of rules that privileged the relationship between businesses and their employees to one that privileged (relatively speaking, in ideology anyway) shareholders.

.. What variables should we care about, if GDP seems to be connected less to welfare than it used to be?

.. the neoliberal period is marked by dramatic, mind-boggling increases in executive compensation without, as far as I know, any signs of better performance or increased shareholder value.

Ask HN: What was it like when dot-com bubble collapsed during 2000-2002?

By 2000 everyone knew there was going to be a big correction. Few accurately imagined how big. It was like going to the doctors because you knew something was ‘a little off’ and finding out that you were going to die in three months. Then talking to all your friends and realizing that everyone you knew had the same disease.

Initially many thought it would be similar to the early 90s recession. I.E. A few layoffs with everyone getting hired back again two years later. It wasn’t until 2002 that people realized that springtime wasnt coming back.

It wasnt just places like pets.com that crashed. You had every single non-tech company simultaneously scaling back IT initiatives. At the time there was still a large cohort of management types who considered the Internet more of a fad than a new paradigm. These types took full advantage of the shifting winds to cut deeply into anything tech related. This broad overcorrection did a massive amount of damage to the industry.

You can still see the impact crater. Remember the big talent shortages during 2008-2012? Thats because you no longer had a cohort of mid career professionals to draw from. Only the thin number of people who survived the collapse and a bunch of novices who were just getting started. Everyone was missing that valuable group of mid career 8-12 years of experience etcBasically a generation of careers strangled. Which is why you’ll often see no sympathy for the ‘talent shortage’ complaint. Five years after cutting everything and leaving people to starve you have the same cohort of managers demanding to know “where are all the people with five years of recent experience”

The Wall Street Journal’s Global Retrenchment

The newspaper is cutting staff and shuttering bureaus, even as populism, trade, and international relations are in the headlines.

Restive news staffers have gone on background to reporters to complain about what they see as editor-in-chief Gerry Baker’s overly sympathetic leanings toward Trump; on the opinion side, an op-ed editor was recently forced out of the paper after conflict over the page’s Trump stance.

.. It’s “pretty grim and pretty depressing,” said that reporter, who like others spoke on condition of anonymity. Several cited agreements they had signed when their employment was terminated.

.. The reporter also mentioned the concerns over Trump coverage, saying Baker’s ordering editors to not refer to Trump’s controversial travel ban as barring those from “majority Muslim” countries as something that was “obviously not taken very well by reporters [overseas].”

.. Additionally, there was scant information shared internally in the company about the layoffs.

“Absolutely nothing,” the former reporter from the Eastern European bureau said. “All whispering between people who’d been laid off and other people.”