Dowd and Friedman

In “Dancing With Derivatives” MoDo says that Othello learned that reputation is all. Now, after a $2 billion trading blunder, Jamie Dimon is learning that.  The Moustache of Wisdom, in “Come the Revolution,” says through ventures like Coursera, world-class learning is coming at bargain-basement prices.  Here’s MoDo:

Jamie Dimon calls it “a doozy.”

And it was. A $2 billion credit derivatives trading bungle that could mushroom to a $4 billion loss.

The shining industry agitator against some of the tougher regulations on banks has suddenly become the shining example of why still tougher regulations may be needed.

After the economy nearly atomized in a cloud of cupidity, Dimon became known as America’s least-hated banker. But now the blunt 56-year-old Queens native who snowed Democrats in Washington with all his talk about not lumping in “good banks” with “bad banks” has fallen off his pedestal.

If Jamie the Great and his “good bank” can make such a gigantic blunder, sending déjà vu shivers down America’s back, what hope is there for lesser bankers?

As Noam Scheiber writes in The New Republic, “we now have ironclad proof — as if we really needed it — that everyone is capable of disastrous stupidity.”

Dimon doesn’t buy the argument that bosses of big, complex companies can never make mistakes. A smart quarterback still needs great defensive ends, as he puts it, or the guy who runs McDonald’s can’t ensure all the meat is fresh.

Britain has been rocked by a “shareholder spring,” a revolution of ordinarily placid investors vetoing bloated executive pay deals and bonuses. Three top executives of British firms were sacked in revolts of shareholders, who also rose up against giving new executives millions in “golden hellos.”

As a pay advisory body crisply put it, “It is unclear how a golden hello benefits shareholders.”

It is redolent of the classic movie “The Solid Gold Cadillac,” with Judy Holliday as a scrappy small stockholder, challenging the board of directors about fat salaries and dubious policies.

With C.E.O. pay going stratospheric as workers’ pay grew stagnant, anger was bound to erupt.

Yet there wasn’t much ire at the JPMorgan Chase annual shareholders meeting in Tampa on Tuesday. It was over quickly and painlessly, despite — or maybe because of — Dimon’s admission on “Meet the Press” that his team was “sloppy” and “stupid” and used “bad judgment” in incurring the loss, which has led to the rolling of three heads at the bank, an F.B.I. investigation, and a Congressional ramp-up for more chiding hearings.

Talking even faster than usual, the tarnished silver-haired banker told shareholders that he couldn’t justify the “self-inflicted” debacle. While the trade was “poorly vetted and poorly executed,” he said it wouldn’t make a dent in the “fortress balance sheet.”

A few shareholders asked pointed but polite questions, but most supported Dimon. “We think you are doing a fabulous job,” one Tampa shareholder told the C.E.O. Outside, a paltry 20 protesters gathered.

The Rev. Seamus Finn, representing shareholders from the Catholic organization Missionary Oblates of Mary Immaculate, did gently press the boss: “We’re wondering, Mr. Dimon, given what we’ve learned, do you still believe a company can self-regulate when trading on their own accounts?” He added: “Furthermore, should our company really be spending shareholder funds on, some $7 million last year alone, on lobbying efforts to thwart the Dodd-Frank legislation and the work of regulators to write the rules stemming from that legislation?”

The priest concluded that the shareholders, “weary of mistakes” and pledges to reform, wonder if Dimon is listening.

But the group endorsed Dimon’s pay package of $23 million and let him keep his dual titles of chairman and C.E.O.

Dimon says he’s a “barely Democrat,” but he’s known as the favorite banker of the president, who called Dimon “one of the smartest bankers we got” on “The View” on Tuesday. President Obama’s financial disclosure report released on Tuesday showed a checking account at JPMorgan worth $500,000 to $1 million, and in 2010 the president defended Dimon’s $17 million bonus, on top of compensation in 2010 and 2011 of $23 million.

New York City’s chief audit officer is urging Dimon to “claw back” salary and bonuses paid to the top executives who dragged the bank into the excessive risk. That would be a first for Wall Street. Dimon says he is “likely” to do it, but is loath to “act like a judge and jury” with Ina Drew, the head of the investment office who resigned on Monday, given that she lost $2 billion on that deal while she was making $9 billion on others.

He knows he has to claw his way back to high regard.

“I never put myself on a pedestal,” he said. “You lose credibility, you have to earn it back. You have to earn respect every day. It’s never how great we are. It’s always the good, the bad and the ugly.”

Now here’s The Moustache of Wisdom:

Andrew Ng is an associate professor of computer science at Stanford, and he has a rather charming way of explaining how the new interactive online education company that he cofounded, Coursera, hopes to revolutionize higher education by allowing students from all over the world to not only hear his lectures, but to do homework assignments, be graded, receive a certificate for completing the course and use that to get a better job or gain admission to a better school.

“I normally teach 400 students,” Ng explained, but last semester he taught 100,000 in an online course on machine learning. “To reach that many students before,” he said, “I would have had to teach my normal Stanford class for 250 years.”

Welcome to the college education revolution. Big breakthroughs happen when what is suddenly possible meets what is desperately necessary. The costs of getting a college degree have been rising faster than those of health care, so the need to provide low-cost, quality higher education is more acute than ever. At the same time, in a knowledge economy, getting a higher-education degree is more vital than ever. And thanks to the spread of high-speed wireless technology, high-speed Internet, smartphones, Facebook, the cloud and tablet computers, the world has gone from connected to hyperconnected in just seven years. Finally, a generation that has grown up on these technologies is increasingly comfortable learning and interacting with professors through online platforms.

The combination of all these factors gave birth to Coursera.org, which launched on April 18, with the backing of Silicon Valley venture funds, as my colleague John Markoff first reported.

Private companies, like Phoenix, have been offering online degrees for a fee for years. And schools like M.I.T. and Stanford have been offering lectures for free online. Coursera is the next step: building an interactive platform that will allow the best schools in the world to not only offer a wide range of free course lectures online, but also a system of testing, grading, student-to-student help and awarding certificates of completion of a course for under $100. (Sounds like a good deal. Tuition at the real-life Stanford is over $40,000 a year.) Coursera is starting with 40 courses online — from computing to the humanities — offered by professors from Stanford, Princeton, Michigan and the University of Pennsylvania.

“The universities produce and own the content, and we are the platform that hosts and streams it,” explained Daphne Koller, a Stanford computer science professor who founded Coursera with Ng after seeing tens of thousands of students following their free Stanford lectures online. “We will also be working with employers to connect students — only with their consent — with job opportunities that are appropriate to their newly acquired skills. So, for instance, a biomedical company looking for someone with programming and computational biology skills might ask us for students who did well in our courses on cloud computing and genomics. It is great for employers and employees — and it enables someone with a less traditional education to get the credentials to open up these opportunities.”

M.I.T., Harvard and private companies, like Udacity, are creating similar platforms. In five years this will be a huge industry.

While the lectures are in English, students have been forming study groups in their own countries to help one another. The biggest enrollments are from the United States, Britain, Russia, India and Brazil. “One Iranian student e-mailed to say he found a way to download the class videos and was burning them onto CDs and circulating them,” Ng said last Thursday. “We just broke a million enrollments.”

To make learning easier, Coursera chops up its lectures into short segments and offers online quizzes, which can be auto-graded, to cover each new idea. It operates on the honor system but is building tools to reduce cheating.

In each course, students post questions in an online forum for all to see and then vote questions and answers up and down. “So the most helpful questions bubble to the top and the bad ones get voted down,” Ng said. “With 100,000 students, you can log every single question. It is a huge data mine.” Also, if a student has a question about that day’s lecture and it’s morning in Cairo but 3 a.m. at Stanford, no problem. “There is always someone up somewhere to answer your question” after you post it, he said. The median response time is 22 minutes.

These top-quality learning platforms could enable budget-strained community colleges in America to “flip” their classrooms. That is, download the world’s best lecturers on any subject and let their own professors concentrate on working face-to-face with students. Says Koller: “It will allow people who lack access to world-class learning — because of financial, geographic or time constraints — to have an opportunity to make a better life for themselves and their families.”

When you consider how many problems around the world are attributable to the lack of education, that is very good news. Let the revolution begin.

 

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