Business at AMU

  • January 6, 2014 4:42 pm

    Conference examines Business Education and Catholic social teaching

    During January 2-4, more than 30 scholars from 14 universities came to Ave Maria for the “Mission-Driven Business Education” seminar to talk about integrating the Catholic faith and the Catholic intellectual tradition into the teaching of marketing, management, accounting, finance, economics, and business ethics.  Michael Naughton (of the John A. Ryan Institute for Catholic Social Thought at the University of St. Thomas), Gabriel Martinez (Chair of the Business Department at Ave Maria University), and Henry Amoroso (of the Micah Center at Seton Hall University) were the seminar organizers.

     “Through the questions we raise, through the topics we choose, through the answers we give, we can give our students and our colleagues a sense of the meaning and fulfillment we have found as Christians and as Catholics,” said Dr. Martinez.  “The Catholic tradition gives us a different perspective and a unique impetus to study finance, economics, marketing, accounting, management, and business ethics, which makes our classroom and research occasions for – appropriate, respectful, opportune – evangelization.”

    The seminar, which focused on the uniquely Catholic dimensions of business education, lasted two and a half days, with formal presentations and informal discussions.  In their presentations, the participants laid out their understanding of the Catholic intellectual tradition and of Catholic social teaching.  Then they connected these ideas with the specific pedagogical strategies that they use to help students make relevant connections.  Other scholars responded by highlighting what they thought was most relevant, thus starting a discussion among the whole group.

    All participants wrote background papers on their ideas of the integration of Catholic teaching with their disciplines.  They also provided specific teaching notes and syllabi, which will be made publicly available to the worldwide academic community, with the aim of helping business professors in any university who want to bring the Catholic intellectual tradition to their own students.

    Together with a very favorable impression of Ave Maria, the participants (from Notre Dame, Pepperdine, St. Thomas, Seton Hall, St. Joseph’s, St. John’s, Dayton, Catholic University of America, Loras, St. Norbert’s, Lexington, Le Moyne, St. Francis, and Ave Maria) left with strong bonds and with plans for future collaboration and extensions of their work into the world of business.

  • October 23, 2013 8:03 pm

    What is the top grossing movie of all time?

    What is the most popular movie, ever?  There are many ways of measuring this.  One simple way is — how much money did people pay to see it?

    This webpage reports that the top 5 all-time highest grossing movies were 

    1. Avatar 
    2. Titanic 
    3. The Avengers 
    4. The Dark Knight 
    5. Star Wars: Episode I - The Phantom Menace
    6. Star Wars 
    7. The Dark Knight Rises 
    8. Shrek 2 
    9. E.T. the Extra-Terrestrial 
    10. Pirates of the Caribbean: Dead Man’s Chest

    Star Wars 1 made a little over $474 million at the box office.  Avatar, a little over $760 million.  But wait a second.  Star Wars 1?  Really?  The Phantom Menace really made more money than the original Star Wars (known to people in the know as Episode 4), made in 1977?

    Well, everything was cheaper in 1977, including movie tickets, so Star Wars Episode 1, popular as it was, didn’t bring in that much cash.  That brings a thought.  What if we could adjust the “box office revenue” so it took into account the different prices?

    It’s the easiest thing to do.  This web page reports prices since 1913.  Just divide the “box office revenue” by the price index for that year, and you get an “adjusted” measure.

    So, adjusting for inflation, the highest grossing movies of all time were

    1. Gone with the Wind - 1939
    2. Snow White and the Seven Dwarfs - 1937
    3. Star Wars - 1977
    4. Bambi - 1942
    5. The Sound of Music - 1965
    6. 101 Dalmatians - 1961
    7. Jaws - 1975
    8. The Exorcist - 1973
    9. E.T. the Extra-Terrestrial - 1982
    10. The Jungle Book - 1967

    Because everything was cheaper, going to the movies was a big deal in 1942.  If people paid almost $103,000,000 to go see Bambi, that made it huge!  That’s almost $1.5 billion in today’s prices.  It’s $3.3 billion in today’s prices for Gone with the Wind.  Avatar barely gets to $826 million.

    Plus, back in 1942, people weren’t as rich as they are today.  If you were going to a decent movie, that might take a good chuck of your paycheck.  If you go here, you’ll get data for income since 1913.  If you figure out the “box office revenue”, but as a proportion of national income, you get that the top-grossing movies of all time were

    1. Gone with the Wind - 1939
    2. Snow White and the Seven Dwarfs - 1937
    3. Bambi - 1942
    4. 101 Dalmatians - 1961
    5. Star Wars - 1977
    6. The Sound of Music - 1965
    7. The Jungle Book - 1967
    8. Jaws - 1975
    9. Doctor Zhivago - 1965
    10. Mary Poppins - 1964

    To put this in perspective, suppose that you made $100,000 a year.  Would you spend $214 on a movie … on the same movie, in the theaters?  It’s like going 14 times to see it.  Yes, you might watch a movie many times.  But 14 times, in theaters?

    People spent that much of their income on Gone with the Wind.  Fast forward a few years, and you find that the money spent (in the theaters) on Star Wars, Episode 1 (A New Hope) it’s like you (and everyone you know) spent $22 on that single movie, in the theaters.

    Compare that with $7 on Avatar and $5 on Titanic.  Yes, the more recent movies were big, but lots and lots of people didn’t even bother with them.  Everyone and their brother seems to have seen Snow White.  13 times. Go figure.

  • July 29, 2013 9:34 am

    Where do financial crises come from?

    Financial crises are enormously complicated beasts, but at the end the causes are quite simple: too much debt.  Now, debt can be a good thing.  It helps us buy houses, cars, and education.  If you have a reasonable expectation that your future income will allow you to meet the debt service payments (and especially if you can reasonably expect that what you are buying with that debt will generate enough extra income to pay for the debt), then by all means debt is helpful.

    But, helpful or not, it is debt.  It must be paid, even if your reasonable expectation turns out to be wrong.  It puts you in bondage to someone else.  It gets even worse when a culture of getting into debt develops, and we think nothing of stacking up credit card balances without having the money to pay them in full at the end of the month.

    A culture of credit has developed.  As a very concrete measure of this, look at this graph.  It shows you that Americans used to save, on average, 10% of their after-tax paycheck.  It got down to 2.5% before the crisis, went up to 5% during the recession, and now it’s back to 2.5%.  This is where the financial crisis came from: the credit culture.  

    People barely save, and instead of building on a foundation of saving, people count their chickens before they are hatched, put it on plastic, pay the minimum, and then find themselves in over their heads.  

    How bad was this problem?  Between late 1998 and late 2007, once you take into account borrowing, households where in negative saving.  That is, if you added what people saved and subtracted what people borrowed, you would get a negative amount.  We were not putting money away from the future, we were all living on a credit card.  (In the spring of 2005, saving was a a negative $372.0 billion a year, that is, - 3.19% of GDP).  That’s the meaning of “not thinking about the future,” macro-scale.

    Another way of looking at it: the ratio of financial obligations to after-tax income (debt service, rent, insurance, tax)  is today the same as it was in 1983.  But interest rates are one quarter of what they were back then.  So imagine what’s going to happen when interest rates begin to normalize.  People’s financial obligations will explode.

    How can we change this?  We can begin by not putting anything on a credit card that we can’t pay for at the end of the month.  Always pay the balance in full.  You can also set up your bank so that it automatically takes some amount from your paycheck (say, 10%) and moves it into saving.  By the end of the year, you’ll have a nice bit of money saved.  Then put it in a low-fee mutual fund that tracks the overall stock market.

  • June 24, 2013 9:07 pm

    Business for humans

    We can think farther and deeper about human work because of the revelation of Christ.  Through Christ, we have been taught that we are called “to be partakers in the divine nature.”  This is the essence of the ultimate end of man elevated by grace: participation in the divine life.  The ancient political good is now transcended by a higher common good.  Or perhaps it is better to say that this political good itself is elevated to a higher level in terms of the new polis: the city of God.  Fundamentally, we belong to the community of saints. 

    Business and economics must ultimately be judged according to the common end of the city of God. One can see the effects of this revelation on our view of business more strikingly by considering human action itself.  Man acts for an end.  The end is the principle, and therefore every action is ultimately judged in light of the end.  Now the Christian is aware that the ultimate end of human life is full participation in the divine life to which we are ordered by charity.  This means that every action is good simply insofar as it is informed by charity.  The act of writing a letter can be good as an act of composition.  The act of painting can be good as an act of art.  The act of working in the vineyard can be good as an act of labor.  But to be really good, to be a fully human act, they have to be done with charity.  So a life dedicated to business can be a good, fully human life, if it is filed with charity as well.

  • June 24, 2013 8:29 pm


    America is a nation of immigrants.  Immigrants bring a great deal to the country.  Some bring high-level skills.  Others bring courage and determination.  Others bring family values.  They all bring a conviction that this country is better than the country they left.  America needs to open its arms very wide to all comers, especially those who look and talk differently, because they are the source of ideas and dynamism for an economy badly in need of both.

    It’s wrong to come into a country breaking its laws.  But it’s also wrong to have laws that restrict entry into a country for no good reason.  Some people need to be kept out – criminals, terrorists.  Everyone else needs to be encouraged to come and stay, to play by the rules and give back. As Adam Smith said (about smuggling and anti-free trade laws):

    a person who, though no doubt highly blamable for violating the laws of his country, is frequently incapable of violating those of natural justice, and would have been, in every respect, an excellent citizen had not the laws of his country made that a crime which nature never meant to be so (WON, V.2.209)

    For example, America devotes enormous resources to educate young people from abroad through our schools and universities.  The immigration regime does nothing to invite these well-trained, well-behaved students to stay: it should be reformed so that it grants permanent legal residency within a few semesters of good grades (and of respecting drinking-age laws). 

    Another example: America also depends on immigrants to run many of its basic services and to produce much of its food.  It should offer a generous guest-worker program (even for current illegal immigrants) with a clear and simple path to residency and citizenship that depends on obeying the laws and acquiring training and showing an attachment to the US Constitution.

  • May 13, 2013 9:52 am

    What’s up with the economy? What can we do about it? Part 3

    The root cause of the debt problem: lack of saving

    To give future generations the standard of living we enjoy, we need to save (and productively invest) nearly a third of GDP.  Today we save half as much.  Families save very little, and have been saving less and less for 30 years.  Government saves very little – it actually dissaves a lot.  The specter of bankruptcy for Social Security and Medicare are a fruit of this national lack of prudence.  Technical fixes won’t be more than more-or-less temporary patches unless the country, as a whole, saves more.

    Government can begin by giving good example.  Not all spending is equal.  Not all government spending is bad.  Not all government spending is good.  Some spending is more valuable than other spending.  Spending to improve productivity – on education or infrastructure – is more valuable than other kinds.  We need to be courageous and generous.  Current beneficiaries of government generosity need to look hard in the mirror and perhaps accept smaller benefits.

    But families can’t assume that they can blame Washington.  A family that doesn’t save 10% of its income is not being responsible towards itself or towards the country.  We need to learn to live more sober, simple, detached lives – or we’ll force our grandchildren to live lives of penury.

  • May 13, 2013 9:49 am

    Working with others, working for others

    Suppose I work for one day in exchange for a given wage.  Insofar as this transaction is viewed as just an economic transaction, it can be judged as an exchange of labor for pay according to which there is the good of efficiency in my work and the good of profit for the owner.  However, these goods are not absolute goods.  The actors involved, the owner and myself, are not ultimately ordered to economic ends but to the more universal good of human flourishing.  As such, these subordinate goods must always be conducive toward the higher common good of the state or community of which we are parts. This understanding of the common good helps to see also that labor and economic transactions are not opposed to nor even neutral towards the nature of the human person.  That man is ordered to a common good and called to freely direct himself in this way is a function of his spiritual nature (intellect and will), and it is this which enables him to transcend himself in love.  Man in virtue of his intellect is able to see another as another self and thereby to direct his action to the good of the other simply.  This is what JPII so often refers to as the “gift of self.”   Thus, at the very root of the economic transaction there is more than the exchange of labor and wages.  There is, in fact, the value of the service itself by which the laborer is given the opportunity to work towards the good of the owner, the owner is given the opportunity to provide a good for the worker, and both receive the opportunity to act for the common good of the community.

  • April 15, 2013 11:35 am

    Career Opportunities in Accounting

    Did you ever stop to think about the Boston Red Sox baseball team as a business?  They are! And they require all of the same business support as any other company.  All MLB, NFL, NHL, NBA, etc. teams are businesses and they all have accountants.  The varied job opportunities opened to accountants may be summarized into three major areas: public accounting, private accounting, and government and not-for profit accounting.

    Public Accounting

    Public accounting firms provide auditing, tax, accounting, and consulting services to businesses and individuals. These firms range in size from single practitioner to large international firms with hundreds of offices worldwide and thousands of professionals. Accountants in these firms work with a variety of companies and gain wide exposure and experience. At the same time, the job often involves pressure, travel, and seven-day workweeks.

    CPA firms generally offer the following types of services: auditing, income taxes, accounting and review, and consulting services.


    Auditing is the most important function of the certified public accountant. International CPA firms and many national CPA firms devote a large percentage of their time and resources to financial statement auditing. Auditing fees account for 45-50% of their total revenues.


    CPA firms perform many tax services for their individual and corporate clients, including preparation and review of tax returns, tax planning (the legitimate avoidance or deferral of taxes), and tax litigation (appearance before a court or an administrative body on behalf of their clients).  Specializing in income tax preparation and planning is a very viable career path since taxation has such a pervasive effect on business decisions and on all aspects of our personal as well as professional life. If you want to work in the area of taxation, you may want to earn the E. A. (Enrolled Agent) designation or a master’s degree in taxation.

                Accounting and Review Services

    CPA firms, both large and small, perform a variety of accounting services for their clients. These services range from maintaining accounting records to performing compilations, that is preparing financial statements without providing any assurance on them. A form of limited assurance can be provided by a “review” which is more limited in scope than a full-blown financial statement audit.

                Consulting Services

    The fastest growing area for CPA firms is management consulting services, formally known as management advisory services. These services can cover such wide-ranging fields as computer systems, management information systems, marketing, executive recruiting, personal financial planning, and budgeting techniques, etc.


    Private Industry Accounting

    If an accounting graduate does not want to go into public accounting, he can go into management and private industry accounting. Unlike public accounting, private industry accounting has no rigid minimum requirement. In private industry accounting, you work for one company and gain in-depth knowledge and experience in the accounting for that company. You prepare the financial information necessary to help management plan and control company activities. Thus, besides preparing financial statements for external reporting, you will also be working on many internal accounting reports, such as budgets and cost analyses, for the use of management.


    Government & Not-For-Profit Accounting

    The goal of the accounting department in a typical government agency is to function within the budgetary constraints mandated by the legislature. Government accountants also monitor the appropriation of funds and awarding of contracts to private agencies that must follow governmental regulations.

                Federal, State, and Local Government Agencies

    More than 100,000 accountants in the U.S. work for the government in federal government agencies such as the General Accounting Office, the Internal Revenue Service, the Security and Exchange Commission, the Defense Contract Audit Agency, etc. Many others work in state government agencies such as the Franchise Tax Board, the Board of Equalization, the Employment Development Department, etc.  At the municipal level, there are also many job opportunities for accountants. These government jobs often offer high or at least competitive starting salaries, good fringe benefits, and better job security. Also, there is not the same degree of pressure on the job like in the public accounting or private industry, making it easier to combine job and family demands. However, the disadvantage with a government job is that it is often difficult to move back later on to public accounting or private industry.

                Not-For-Profit Organizations

    Not-for-profit organizations are not organized to realize a profit on the goods or services they provide as their basic activity. Instead, they exist to provide goods or services considered socially desirable by and for the general public, a community, or its members. There are about 1.2 million tax-exempt organizations in the U.S. today and they cover the gamut of civic, religious, social, professional, scientific organizations, hospitals, schools, colleges, universities, and voluntary health and welfare organizations, etc. They range in size from local agencies to large organizations of national or international scope.

    The next post for accounting will be the career paths available as an accounting major.

  • April 2, 2013 4:08 pm

    Business and the common good

    In the tradition of Greco-Roman thought, the polis was equivalent with the highest good in the sense that it safeguarded and promoted the common good.  Here “common good” was understood in its richer sense of the human flourishing of the many.  As this view of the common good was corrupted and watered down to a material conception, the state came to be seen as the highest good only in terms of promoting economic prosperity.  In these terms, business and economics were first enabled to be isolated from human perfection.  The good of the state was now separated from the good of the individuals except in an accidental manner. 

    The cultivation of virtue, the pursuit of truth, these are things that may be good for the individual, but they are not part of the political (seen as economic) good.  Thus, the economic must be alienated from these. On the other hand, when the common good is conceived as something immaterial, it is understood as that which “by its very nature, both unites individuals and ensures the true good of each” (JPII, Letter to Families, 10).  Given that the political good is the most universal, most common of goods in the human city, economics, which is concerned with goods that are by nature less communicable, must be subordinated to the transcendent good of the persons.  In concrete terms, this means that, while business transactions and institutions can be judged in their own sphere according to their proportionate functional end (providing for material needs), that sphere must always be subordinate to, and therefore ultimately judged only in the light of the whole political sphere of which the economy is only a part.

  • April 2, 2013 3:57 pm

    What’s up with the economy? What can we do about it? Part 2

    The cause of the problem with jobs: Housing and Debt

    In a previous post, I suggested that the economy is in bad shape because businesses are pessimistic, and they are pessimistic partly because job creation has been so poor.  An even bigger contributor to business pessimism is they high level of household debt, especially debt related to housing.  Because of the massive drop in housing prices (and the frantic pace of lending a few years ago), about a quarter of American households owe more on their mortgages than they own in their house. It is calculated that the amount of “negative housing equity” is $1.15 trillion. 

    Until the rate of foreclosures goes back to normal, until the rules for refinancing are clarified and made more friendly to homeowners, until people are able to able to crawl out from under the mountain of negative equity, spending won’t recover, businesses won’t be confident and won’t contribute to economic growth, and banks won’t be safe.

    A big step towards recovery, then, would be a fairly drastic but temporary reform to the bankruptcy code that would allow and encourage people to substantially reduce their debt burden.  This would impose huge costs on the banking sector.  But banks are holding nearly 10% of GDP, nearly $1.4 trillion, in cash that they won’t lend and they won’t distribute, while at the same time they foreclose on millions of homes.