Reviews

Book Review: Pain Studies by Lisa Olstein

My review for the Washington Independent Review of Books

If you think poets shouldn’t dabble in nonfiction, Lisa Olstein’s Pain Studies will do nothing to convince you otherwise. The book has moments so contrived that the reader might wryly observe the title as apropos.

Olstein, a poet, writes this book as a rumination on the nature of pain, riffing on her experience with migraines that she describes as “a headache that lasted three months acute-chronic, chronic-acute.”

When the author leans on her poetic skill, the outcome is beautiful, captivating prose that bleeds and thrums: “Left brow like a pressed bruise, an overripe peach you accidentally stuck your finger into.”

But when she waxes more philosophical, the reader is left baffled at best and groaning at worst. For example, there is an entire chapter on the color of pain. And navel-gazing moments like this one: “Drowning, live pain, has a way of flooding you with the present.”

When Olstein stops taking herself so seriously, she makes insightful (and incisive) observations about what we mean when we talk about pain. Her deadpan lines — “We’re notoriously bad at talking about it, even literally, as in, do you have it, how much, what kind” — will leave readers nodding enthusiastically.

Her accounts of dealing with various healers are equally wry and amusing. She uses an example of good medicine as someone who asks her whether she has found anything that increases the pain, rather than decreasing it. And we can all relate to the humor behind well-meaning advice that fails to deliver: “She’s visibly disappointed I report back miracleless.”

Some of the choices that Olstein makes, however, will confound more than cheer. She dedicates no less than two chapters to Joan of Arc. Why? Because “Joan’s refusal to translate her experience into acceptable terms” is apparently analogous to the trials of pain sufferers, and because “she was a woman surrounded by prying, know-it-all men who pelted her with questions.”

Readers may be willing to hang their coats on such flimsy pegs, but Olstein doesn’t stop there. Exploring the work of obscure philosophers like Antiphon the Sophist will, again, do no favors for those wanting to deny the characterization of poetry as affected and decadent.

Then, we have a whole chapter on the TV show “House.” While the program’s exploration of pain makes this rumination salient, in today’s rapidly moving pop-culture zeitgeist, it feels quite dated to discuss a show that ended in 2012.

Eyebrow-raising choices aside, however, the book is incredibly creative in its style, seamlessly suturing together poetry, journal entries, and discourse analysis. Olstein’s strength as a poet imbues her prose, too, even when it manifests in lists: “Opium poppy, ordeals, orthopedist, Ovid.”

The poems included in Pain Studies are vivid and enthralling. And Olstein’s portraits of how others respond to her pain are compelling and relatable. But could this unconventional meditation have benefited from ditching the obscure references and morose gravitas? A resounding yes.

Reporting

The Hidden Cost of the Hustle–Faculty and Director of the Kogod Tax Policy Center Caroline Bruckner hones in on the tax consequences of gig work.

My article
By Toni Tileva | 
In September 2019, California became the first state in the country to pass a labor law aimed primarily at Uber and Lyft drivers that extends wage and benefit protections to about a million gig workers. California Governor Gavin Newsom wrote an op-ed arguing that when workers are classified as independent contractors rather than as employees, they lose basic benefits such as minimum wage, paid sick days, and health insurance. And their employers do not contribute to safety net programs like workers’ compensation and unemployment insurance, leaving, as Gov. Newsom pointedly stated, “taxpayers holding the bag.”Going a step further to address Social Security shortfalls, on December 19, 2019, Congresswoman Deb Haaland (NM-01), vice chair of the Task Force on Poverty and Opportunity, introduced a groundbreaking bill called the Gig Is Up Act that would require companies that gross at least $100 million and employ at least 10,000 independent contractors to pay the full cost of both the employer contribution and the worker contribution to Social Security and Medicare.“My research shows that gig workers can be in a very precarious economic situation, with most of them working gigs as a supplemental source of income,” Bruckner says. “For many, their low incomes keep them from having other investment vehicles, and they rely solely on Social Security for their retirement. Not getting their just dessert, so to speak, is an unforeseen and not often discussed consequence of contractor and gig economy work.”The gig economy is notoriously hard to quantify, with estimates stating non-traditional work arrangements account for anywhere between 0.1% of full-time employment to 34%. According to the Freelancing in America survey, there are a reported 57 million American freelancers (counting on-demand and independent contractors) contributing in excess of $1 trillion dollars to the economy each year. Yet, their hustle can perhaps best be characterized as a struggle rather than a success, with little worker rights protection, unpredictable compensation, and intermittent work. The “on demand” nature of the work makes it just that—reliant on the customers’ and employers’ demands rather than the workers’.

In her recent book Hustle and Gig, sociologist Alexandrea Ravenelle argues that “for all its app-enabled modernity, the gig economy resembles the early industrial age…the sharing economy is truly a movement forward to the past.” While much research has been conducted on the size and growth trajectory of the freelancer industry, little scholarship examines the often unintended tax consequences affecting the workers and the economy writ large.

“Self-employed workers already have tax compliance and reporting issues, but the existing reporting rules further precipitate their failure to contribute to Social Security and Medicare through payment of the self-employment tax (SE tax),” explains Bruckner.

The tricky part is that companies that use contract workers aren’t required to send out a 1099-MISC unless they have paid that person $600 or more in a given tax year. On-demand workers who are paid by platforms usually get a 1099-K form, which companies use when a contractor has performed at least 200 transactions over the course of the year and has received at least $20,000 in payments. But, often, gig workers don’t receive any tax forms at all, leaving them on the hook to figure out how much they’ve earned over the past year and accurately report it to the IRS.

“Workers who don’t get tax forms from their employers need to figure out their earnings on their own. It is not as though they are intending to break tax laws, but many of them are simply not aware of what the self-employment tax covers and are short changing their Social Security earnings upon retirement in this way.”

Independent contractors and gig economy workers also do not make tax payments through withholding by their employers during the year and have to figure out estimated quarterly tax payments on their own. Not making those quarterly payments can translate to penalties and increases their audit exposure. “This isn’t just about gig workers underreporting their income tax, although this is a way to quantify the tax gap for the IRS and get their attention on the issue,” says Bruckner. “The consequences of the shortfall are twofold: it affects the funding and solvency of Social Security and translates to lower Social Security benefits for these workers upon retirement.”

In their recent “Failure to Contribute” research project, funded by the Center for Retirement Research at Boston College, Professor Bruckner and economist Thomas L. Hungerford estimate that, in 2014, independent contractors didn’t pay $3.9 billion in Social Security contributions that they should have, and on-demand workers didn’t pay $2 billion.

Bruckner has actively raised this issue with the IRS and given testimony on Capitol Hill. The Failure to Contribute report suggests Congress could take steps to modernize information reporting, update quarterly estimated payment requirements, and require better taxpayer education. Ultimately, these strategies should focus on the independent contractor economy generally and the on-demand/gig workforce in particular. “We need strategies to encourage people to buy into the system,” says Bruckner. “This is why tax policy needs to be accessible.”

With a $50,000 grant from the Wharton School of Business and Pension Research Council, Bruckner plans to continue her research with a study examining how women are using the gig economy to make up for retirement shortfalls. “This next phase of research will be ground-breaking in that it focuses on women specifically, who tend to live longer and have higher healthcare costs,” explains Bruckner. “Because women have been subject to the pay gap or had to take time out of the paid work force,  considering their retirement needs and how gig economy work is a strategy for shoring up retirement savings shortfalls is the logical extension of my existing work looking at the gig economy and its implications for Social Security.”

Reviews

Citizen K Movie Review

My review for On Tap magazine

Alex Gibney’s Citizen K documentary is the story of Mikhail Khodorkovsky, a former Russian oligarch now exiled in London after serving 10 years in a Siberian prison. Khodorkovsky’s own words drive this enthralling narrative about post-communist Russia. Gibney, whose previous work includes Enron: The Smartest Guys in the Room, the Oscar-winning Taxi to the Dark Side and The Inventor: Out for Blood in Silicon Valley, is no stranger to tackling complexity and contradiction. The talking heads in this film are few – mostly people in the immediate Khodorkovsky business and legal circle, and longtime BBC correspondent Martin Sixsmith and The Moscow Times founder Derk Sauer. That, perhaps, is one reason why the film’s efforts to explain Moscow politics at times come up against the (Berlin) Wall of Western analysis.

Citizen K begins in 1991, during Boris Yeltsin’s first term as president of the Russian Federation. The Union has come undone, and the economic order of the day is capitalism. Khodorkovsky, whose parents were both engineers, grew up poor – under communism, engineering was not one of the well-remunerated professions. Earning his first paycheck at 14, building a chemistry lab in his house, and with a self-professed love of “things that explode,” the young Khodorkovsky is ready to bank on the rise of capitalism. He starts Russia’s first commercial bank, his sole entrepreneurial “guide” in the form of a book called Commercial Banks of Capitalist Countries. So, how did he get the seed money for it? Enter vouchers. Fashioned after Western economic boost programs, these vouchers were “sold as golden tickets to escape the dead end of communism.” Add in some pop-propelled propaganda flair, including a song whose refrain goes, “Vou vou voucher: friend of privatization measures,” and these vouchers, worth $40, could be traded, exchanged for cash or used to buy shares in newly-privatized state enterprise. Khodorkovsky bought a lot of those vouchers from everyday folks, ones Derk Sauer rather derisively calls “naive,” who sold them for less than their worth. Sauer remarks little on the fact that the economic crisis at the time was fertile ground for this exploitation and speculation.

Khodorkovsky acquired dinosaur-age-equipped, mammoth-sized oil company YUKOS next, modernized it and became Russia’s richest man, in a pantheon of seven other oligarchs who combined owned more than 50 percent of Russia’s wealth. Citizen K makes the argument that these oligarchs were instrumental in putting Putin in charge, but they were unable to predict his ambitions would lead away from privatization and toward re-entrenchment of state ownership instead. And while the other oligarchs left Russia when it became apparent that they would be arrested on whatever charges were expedient, Khodorkovsky, defying the counsel of everyone around him, insisted on staying: “I don’t value life that much to exchange it for losing respect.”

Charged with tax evasion on hundreds of millions of dollars in Russian oil in his first trial, and with stealing the very same oil he didn’t pay taxes on (the absurdity will not escape you), Khodorkovsky is sent to prison. In 2013, coinciding with the Sochi Olympics, Putin pardoned and released him, after a 10 year sentence.

The strength of Citizen K lies in its portrait of a complicated man who lived (and ruled) through the Wild Wild West stage of Russia’s post-communist years. Whether “gangster capitalism,” as Gibney describes it, is still du jour is questionable, but there is little doubt about Khodorkovsky’s unique worldview as a “reformed” oligarch interested in ideals and willing to put his life (in prison, he went on two hunger strikes to advocate for others) behind his principles. Gibney tackles showing what “transition” looked like for all of the former communist countries with great aplomb and delivers a thoroughly engrossing history lesson.

Reporting, Reviews

Pay It Forward, DC: 15 Ways To Give Back Locally

My article for On Tap magazine

Pay It Forward, DC: 15 Ways To Give Back Locally

/in ,  /by 

‘Tis the season for paying it forward, so we decided to put together a list of 15 ways to give back to the DC community year-round. Our handpicked list is chock-full of unique organizations eager to put new volunteers’ hands and minds to novel uses. Read on for a list of creative ways you can give more of yourself to those in need around the District.

Restore the Anacostia Watershed

Eco-minded folks can help restore wetlands, plant native plants, collect seeds and much more, all while learning about the watershed and its ecosystem.
www.anacostiaws.org/how-to-help/volunteer.html

Put Down Roots with Casey Trees

Channel your inner tree-hugger through a variety of opportunities, from tree planting and tree care to advocacy.
www.caseytrees.org

Get Your Hands Dirty with Columbia Heights Green

Put your green thumb to good use at Columbia Heights Green, one of many participating parks and gardens in the Community Harvest Program at Washington Parks & People.
www.columbiaheightsgreen.org

Show Compassion & Offer Advocacy through HIPS

Donate to and/or volunteer with HIPS (Harm Reduction Experts Improving Lives Since 1993), offering compassionate harm reduction services and advocacy to people who engage in sex work or drug use in the DC area.
www.hips.org

Expand Your Practice with Yoga Activist

Are you a yoga teacher who wants to take the practice outside of the confines of traditional studio spaces? Yoga Activist is the place to do it.
www.yogaactivist.org

Knit It Forward in the District

Do you stay calm and knit on? Join one of many knitting meetups held at DC Public Library locations and/or donate your handknitted items to a variety of charities.
www.dclibrary.org // www.lionbrand.com/blog/10-charities-for-knitters-and-crocheters

Feed the Hungry with So Others Might Eat

Help provide nourishing breakfasts for those in need. They use real eggs, too – none of that powder stuff.
www.some.org

Provide a Fitness Framework for Girls on the Run

Volunteer with the DC chapter of this national nonprofit dedicated to making a world where every girl is free to boldly pursue her dreams through running. Support students during a 10-week program to help them establish an appreciation for health and fitness.
www.gotrdc.org

Dress to Impress with Suited for Change

Help local women entering the job market dress to impress through a variety of volunteering and donating options, including leading a styling workshop.
www.suitedforchange.org

Support Senior Citizens at We Are Family

Help isolated senior citizens with groceries, cleaning, transportation or just a friendly visit. Make a new friend this season by joining We Are Family.
www.wearefamilydc.org

Save the Felines with Alley Cat Rescue

The trap-neuter-return program at Alley Cat can make life on the streets a little more bearable for our furry friends. Donate to the rescue or adopt one of their many cuddle bugs.
www.saveacat.org

Be a Classroom Volunteer at Carlos Rosario International

Volunteer in adult ESL, culinary, IT and health classes and programs at Carlos Rosario International Public Charter School, and/or join as a mentor through the Impact Mentorship Program.
www.carlosrosario.org/get-involved/volunteers-2

Mentor Families with Northstar Tutoring

Tutor, mentor and help support members of low-income families in DC through Northstar Tutoring.
www.northstartutoring.org

Help the Homeless at Friendship Place

Help people in need transition out of homelessness at Friendship Place through a variety of volunteer roles, from mentoring to cleaning.
www.friendshipplace.org

Go Pro Bono with the D.C. Bar

If you’re a DC lawyer, you can give back by providing a variety of pro bono legal services.
www.dcbar.org/pro-bono/volunteer

Coach Soccer with DC Scores

Score a winning goal by helping coach and referee soccer games.
www.dcscores.org/volunteer

Reviews

Book Review: Homewreckers by Aaron Glantz

My review for the Washington Independent Review of Books

This exploration of the housing crisis evokes anger but comes off as a sloppy polemic in places.

The cover of Aaron Glantz’s Homewreckers depicts Donald Trump holding wads of cash, Steve Mnuchin riding a wrecking ball, and Wilbur Ross pulling money out of a house. It is a rather apt summary of the book’s main argument, along with the somewhat-hyperbolic characterization of the destruction of the “American dream” the title hints at.

While many books have been written about the 2008 Great Recession, including The Big Short and The Two Trillion Dollar Meltdown, few have explored who benefited from the bank bailouts and what happened to all of those foreclosed homes. Homewreckers tells that story — the story of what the author cleverly dubs “vulture capitalists” profiting off the very disaster they orchestrated.

But Glantz spends an unwarranted part of the book drawing detailed biographical sketches of people in Trump’s inner circle, including Mnuchin, Thomas Barrack Jr., Stephen Schwarzman, Sean Hannity, and Trump’s father, Fred Trump. While the investigative zeal with which he goes after these figureheads is keen and captivating, ultimately, it detracts — or, better put, distracts — from the strength of his argument.

Glantz points to the fact that U.S. homeownership rates began declining in 2012 to the present, reaching some of their lowest levels in history. He argues that this is at least partly due to buyers not being able to snatch up the foreclosed homes because banks were not interested in issuing post-meltdown mortgages, and the government preferred to sell to Wall Street:

“In March 2010, the U.S. Treasury estimated that 6 million home loans were at least 60 days delinquent but the federal government reported that only 230,801 Americans had renegotiated their loans with the help of the Making Homes Affordable program, the part of the bank bailout that was supposed to help homeowners stave off foreclosure.”

The most incisive condemnation of “business as usual” is the story of shadowy (and shady) banks hiding behind shell companies with sci-fi-esque names like ColFin AI-CA5 LLC that purchased foreclosed homes in bulk, only to flip them into rental properties with exorbitant rents and minimal maintenance costs. Between 2012 and 2014, for example, Schwarzman’s Blackstone Group spent $7.8 billion to buy 41,000 foreclosures and turn them into rentals.

The most bitter of ironies is that some of the owners who had lost their homes to foreclosure stayed on as tenants who now paid rent to these faceless, absentee landlords. But Homewreckers fails to convince the reader that rent-seeking alone is lucrative enough for these investors; Glantz hints at the creation of mutant mortgage-backed securities but offers no evidence to support it.

In other words, renting out 80,000 homes seems like small potatoes for these billionaire robber barons. Glantz doesn’t make a strong case for why we, the readers, should be outraged and not simply see this as sound capitalism (buying low and selling high is Investing 101).

He veers off track in exploring reverse mortgages, as well. These mortgages have been in place since before the meltdown. Are they predatory? Yes. But what they have to do with the 2008 debacle is not made explicit. Still, the story of Sandy Jolley, who lost her family home to a reverse mortgage and then sued the bank for constructive fraud and financial elder abuse is eloquently and poignantly narrated.

This is where Glantz’s journalistic prose shines, compelling and trenchant. Yet, he struggles to connect the story to his general argument. He details how Mnuchin’s OneWest Bank (which purchased failed IndyMac) foreclosed on thousands of reverse mortgages across Southern California, but again, there was nothing illegal about doing that even though no one will dispute the pernicious nature of reverse mortgages.

Glantz makes a stronger argument for the way in which a small cadre of billionaires took advantage of the government’s fire sale on lending banks that had crafted their own demise. He cogently traces the way in which American taxpayers ultimately footed the bill for the bank bailouts without reaping any of the benefits.

In that sense, Homewreckers is a captivating read, almost thriller-like in its way. But Glantz could have benefited from avoiding some of the rather petty and irrelevant asides, such as what fur coat Melania Trump wore and how “flipping wives went hand in hand with flipping houses.”mp wore and how “flipping wives went hand in hand with flipping houses.”

Reporting

What Are the Odds? A computational neuroscientist and Kogod adjunct scores a career as a data scientist with the NBA.

So much of our everyday life involves making predictions—from picking the best route for our morning commute to bringing an umbrella to choosing a partner. “We predict all the time, so the process is natural,” says Grant Fiddyment, adjunct professor of predictive analytics at Kogod and data scientist for the NBA’s Philadelphia 76ers. “In a lot of ways, it’s the same way we interact with technology and the world. For instance, how can I phrase my web search so that the site will match what I’m looking for? How can I pronounce a word so that a virtual assistant will understand what I’m saying? Without knowing the technical details, we implicitly learn how these technologies work.”

What is predictive analytics, and how does it offer us a glimpse into the future?

At its most fundamental level, the discipline calculates the likelihood of future events by simply (although many would cry foul at this characterization) counting the possible outcomes. Its foundations were laid in a 1654 letter exchange between French mathematicians Pierre de Fermat and Blaise Pascal discussing how the winnings of a coin-flipping gambling game should be split. And while we all know that the house always wins in Vegas, few would know to credit Jacob Bernoulli’s Law of Large Numbers from 1713 as the reason why.

Despite predictive analytics’ old roots, it is responsible for many facets of modern-day life we give little thought to—things like credit card fraud detection, virtual chess partners, and, of most interest to Fiddyment, creating professional sports super teams.

Grant Fiddyment's headshot.

As a data scientist on the research and development team for the 76ers, Fiddyment helps frame and analyze the predictive questions that arise in sports—for example, how will signing a new player impact a team’s title odds, or how well will a tall lineup play against a smaller, quicker one?

Predictive analytics has long been used in sports, going back to the analog days of yore. Baseball has historically led the movement. One of the most famous success stories is told in the movie Moneyball, which follows 2002 Oakland Athletics general manager Billy Beane as he uses predictive analytics to hire under-valued players and send his team on a crowd-wowing 20-game winning streak. But the methods developed in Oakland have application across all sports.

“Most teams were asking, ‘How often does a batter get a hit when they go to bat?’ Instead, the A’s asked, ‘How many bases does a player get when they go to bat?’ Looking at total bases turns out to be more predictive of how many runs a team will score,” explains Fiddyment. “Similarly, in the NBA, teams used to ask how often a player will make a shot. But this overlooks the fact that all shots are not equal. So now teams are asking, ‘How many points will a player get when they take a shot?’”

In the past decade the number of three-point shots in the NBA has increased. Is the rise just due to random luck or is it part of a well-crafted strategy? Fiddyment and other fellow data scientists employed full-time by sports teams work to answer new questions like these. He credits the invention of video tracking as the proverbial game changer. “Chip or camera-based systems will follow players as they actively play a sport, and the data we get is much more nuanced than a single-number summary,” says Fiddyment. “For example, we can answer how many pick-and-rolls the team ran last game or how open were the shots they generated. We can analyze the individual and team as a whole.”

At the moment, this kind of data collection is limited to professional teams, making it difficult to spot up-and-coming superstars. “College and international teams typically don’t have the same camera systems, so projecting which players will become successful remains a very challenging problem,” Fiddyment says.

Despite rapid advancements in technology, however, not all data is created equal—or, perhaps, equally useful. The limitations of data translate to limitations in predictive accuracy (as meteorologists can confirm). “We need to be aware of computers’ strengths and weaknesses,” Fiddyment advises. “Computers can process vast amounts of data much more quickly than humans ever could. But they are restricted to the data they have and operate very literally, so we should never expect them to behave exactly like a human, even if they can match our performance at a given task.”

From the glitz of Vegas to the life-saving powers of storm forecasts to the way opinion polls affect voters, predictive analytics is ever-present in our lives. Advances in machine learning and big data models are improving our ability to look into the future, but they are also raising some thorny issues, one of the most notable being the boundaries of data privacy. For now, however, Fiddyment has scored a slam dunk for the NBA.

Reporting

From Veteran to Venture: Kogod alum-turned-professor helps veteran entrepreneurs launch their businesses

My story for Kogod School of Business

Each year, roughly 200,000 US service members transition from the military to the private sector. Although veterans are twice as likely as non-veterans to be self-employed, their rate of business ownership has dropped precipitously from the entrepreneurial high of their predecessors in the last century.

Half of World War II veterans went on to own or operate a business—a similar rate to the 40% of Korean War vets who did the same almost a decade later. Of the more than 3.6 million people who have served in the military since September 11, 2001, only 4.5% have started a business. What has led to such an enormous gap in veteran entrepreneurship?

In short, more challenges—and fewer resources to overcome them.

Although 25% of veterans say they want to start their own businesses, they face more obstacles securing the capital needed to get their ideas off the ground than in the past. Unlike the GI Bill of 1944, the updated 2008 version does not include access to low-interest loans to start a business. The financing needs of veteran and non-veteran businesses are similar, research shows, but even though would-be veteran business owners submitted more loan applications and reached out to a wider variety of lenders, they typically obtained less financing and got lower approval rates.

Because of frequent travel and work abroad, some veterans are also struggling with building a credit history and amassing collateral. And while previous military drafts drew from all segments of society, this century’s all-volunteer armed forces are more likely to come from military families, making them increasingly isolated from the non-military community and the networks that facilitate business success.

Seda Goff—a Kogod adjunct professor and MBA alumna—is helping veteran entrepreneurs overcome these challenges in her role as the director of veteran entrepreneurship at the PenFed Foundation. Through the foundation’s Veteran Entrepreneur Investment Program (VEIP), veterans can get the seed capital and mentorship they need to build and grow their ventures.

“Veterans have given a lot to serve and protect us, and the skill sets that they gained in the process lend themselves perfectly to entrepreneurship,” Goff says. “This new generation of entrepreneurs feel that same desire to serve and to make a difference and be bigger than themselves.”

After graduating from Kogod, Goff worked for the US Department of Veterans Affairs before moving to PenFed, where she was able to build the nonprofit investment program from the ground up. Her passion for helping veterans stems from growing up in close contact with service members.

“My father was in the Turkish Navy. He worked for the navy for almost 30 years after we came to the US,” Goff recalls. “I loved being around service members and their families. Everybody is very mission- and service-oriented.”

Since launching in March 2018, the Veteran Entrepreneur Investment Program has invested in and offered resources to veteran entrepreneurs. And because veterans are 30% more likely to hire other veterans, the program’s benefits extend to the entire veteran community.

VEIP is funded by outside donors, with PenFed Credit Union matching up to $1 million in contributions. Returns on all investments go back into the program to support future veteran-owned ventures. “The success of veteran entrepreneurs allows the program to exist,” Goff explains. “The dividends go right back into investing in more entrepreneurs. The multiplier effect translates to growth for businesses that are ready to launch, established businesses that want to grow, and those that are still in the exploratory stages.”

In the future, the PenFed Foundation aims to develop new resources for veteran entrepreneurs in all stages of the business cycle, with a focus on women veteran entrepreneurs—who have grown from owning 2.5% of veteran-owned businesses in 2008 to 4.4% in 2012.

Goff, who works with the American University Entrepreneurship Incubator, hopes to one day launch an incubator for veteran entrepreneurs at Kogod, too.

“I feel like the majority of entrepreneurs are just problem solvers. And if you point them in a direction, they’re going to solve problems,” Goff says. “In my work, I have seen how a military career is not something that you need to transition away from to be successful. Serving already has given vets the tools for success.”

Reporting

Islamic Finance—A Centuries-Old Approach Providing Modern Solutions

Published here

Could a system of finance dating back to the seventh century offer modern solutions to problems like college debt and crumbling infrastructure? Dr. Ghiyath Nakshbendi, chair and founder of the graduate certificate in Islamic finance at the Kogod School of Business, believes so.

“In America, millennials are growing tired of the system of interest, especially when it comes to student loans. They are looking for something that is different,” Dr. Nakshbendi explains. “We also have big problems with infrastructure. More than 54,000 bridges need repairing, for example. Islamic finance could be a way to fund these projects.”

Kogod’s graduate certificate in Islamic finance is the first of its kind in the US. Although Islamic finance has been practiced for over a millennium in Muslim countries, it is relatively new to the US, with the Office of the Comptroller of Currency approving its use for home lending in 1997. It  has taken strong root in Europe, with nations like the United Kingdom, Germany, and Luxembourg at the forefront. In 2018, the UK’s largest Islamic bank, Al Rayan Bank, said about one-third of its customers were non-Muslim, up from one-eighth in 2010. So what is driving Western interest in this ancient approach?

“Islamic finance is not for Muslims only,” Dr. Nakshbendi states. “It is for humanity.”

Islamic finance is an alternative to conventional finance. Sharia law—Islamic law based on the religious principles of the Quran and the Hadith—forbids the charging of interest. Because money is only a way of defining value, making money from money is not permissible, rendering financial products like options, futures, and derivatives moot. In Islamic finance, lending can only occur in the context of a sale or exchange of some sort, meaning investments must result in something tangible.

If interest is forbidden, how do Islamic institutions interact with conventional financial markets? Profit-and-loss sharing contracts are one way, where an Islamic bank pools investors’ money and assumes a share of the profits and losses. Another way is renting or leasing products and services. Or a bank can form a partnership with the company it is sponsoring, reaping some of the benefits once the company produces its product. There are also sukuk—Islamic bonds.

Malaysia, a leader in Islamic banking, has been at the forefront of using Islamic finance to fund environmental sustainability projects. In 2018, Malaysia’s Securities Commission debuted the world’s first green sukuk, an Islamic bond used to fund environmentally sustainable infrastructure projects. Two Malaysian investment companies have already issued green sukuk to fund the construction of large-scale solar power plants in multiple districts.

Islamic finance is even finding its way into cryptocurrency. Rain, a Bahrain-based cryptocurrency exchange, announced in February that it had passed a Sharia compliance certification and bills itself as “the most regulated and secure digital currency exchange in the Middle East.”

“Malaysia and Bahrain are setting global best practice standards of Islamic finance. Business juggernauts like Kuwait and Saudi Arabia have been relying on this system, and they are at the forefront of all sorts of innovations,” says Dr. Nakshbendi.

The Islamic finance program attracts a wide variety of students who are eager to learn an alternative way of doing business, from creating community-minded, sustainable development to avoiding predatory lending and promoting inclusive growth.

Recent graduate Bianca Tardio sees Islamic finance as an avenue for positive societal change. “A lot of conventional finance funding provides more of a debt problem, which people obviously have trouble getting out of,” Tardio says. “Islamic finance would be an alternative to benefit not just companies or corporations but actually the people.”

Many students see Islamic finance gaining traction in the world economy and want to make sure they’re prepared to be a part of this growing global branch of finance. For them, the certificate opens up a world of career prospects.

“If one of the regular banking institutions wants to open an Islamic finance branch, someone with this certificate will be the first they will ask to get involved,” Dr. Nakshbendi says. “Even though the figure is from 2016, a study found that there are more than 50,000 jobs in Islamic finance worldwide.”

In 2017, total worldwide Islamic finance assets were estimated at $2 trillion. By 2021, they are expected to grow to $3.5 trillion. In the US, banks like Standard Chartered and JP Morgan—alongside several smaller banking institutions—are already offering Islamic personal and business banking services.

Students graduating from the certificate program are positioned to be at the forefront of Islamic finance’s growth in the US and around the world. From infrastructure development to climate-friendly investments to cryptocurrency, Islamic finance’s inherent innovation invites further exploring.

Though it has ancient roots, Islamic finance is far from irrelevant or antiquated; it offers solutions to some of the world’s most entrenched modern problems. Rather than focusing on wealth generation, Islamic finance offers an avenue to community-focused development and socially responsible investing.