Why stray away from higher education, when writing about it is such a stress reliever! ;)
As if I needed yet another piece of evidence that we ain't no Harvard comes this report:
Harvard, based in Cambridge, Massachusetts, and founded in
1636, is the oldest and wealthiest college with an endowment
valued at $36.4 billion as of last June.
$36.4 billion. Billion! And two days ago, I had a tough time imagining what $17 million means!
The gifts to Harvard show that the nation’s wealthiest
colleges are attracting a disproportionate share of higher
education philanthropy, cementing their competitive positions,
even as less fortunate universities find their finances
weakening as they look for customers to afford soaring tuition.
Such inequality is growing, said Ronald Ehrenberg, an economist
at Cornell University.
Yep, "attracting a disproportionate share" is nothing but an euphemism for what we who are down in the trenches refer to as "the rich get richer."
“The richer institutions are pulling away from everyone
one else in terms of their endowment resources and the vast
annual giving sums they generate, much of which goes towards
building their endowments,” Ehrenberg said. “At poorer places,
you need the money for current operating and also for
construction projects.”
Yep, at poorer places--like the university where I work--there is always that problem with not enough money for operations, leave alone the endowment.
Of the 832 total isntitutions [sic], the top 10.9% with endowments of more than $1 billion each hold 74% of all endowment assets.
At least Harvard correctly refers to the governing board as Harvard Corporation. The best and longest running corporation ever!
Harvard is a real-estate and hedge-fund concern
that happens to have a college attached. It has a $32 billion
endowment. It charges its rich students — and they are mostly from rich
families, with many destined to be rich themselves — hundreds of
millions of dollars in tuition and fees. It recently embarked on a $6.5
billion capital campaign. It is devoted to its own richness.
And, as any corporation, it knows well that its "nonprofit" status is a wonderful tax-shelter!
If the school lost its nonprofit status, it would owe the state of Massachusetts $80 million a year. (The $350 million donor owns $100 million of real estate in Harvard Square, by the way.) For now, it owes close to nothing on its land or its investment portfolio.
The richest get insanely even richer.
Source: seriously? You need me to tell you, again?
Meanwhile, the tired student at my university juggles being full-time at school while working nearly full-time at a little more than minimum wages.
Of course, if I were to compare Harvard with a typical college in, say, India, it might seem as if the two institutions are on two different planets. Oh well. Such is life.
Whether it is a limited government or an expanded one, a government we shall always need, without which we will look at "the life of man, solitary, poor, nasty, brutish, and short." A government requires an executive team, managers, workers, and a process to figure out how to make sure that this government does what we would like it to do.
Easier said.
In this struggle to figure out this problem, it appears that we are a lot less comfortable with some kind of a democracy over other alternatives. Yes, I am channeling Winston "Bengal Famine" Churchill here, who observed that democracy is the worst form of governance that humans ever invented, except that the alternatives are even worse. I suppose politics and elections are all about the various levels of discomfort we have with this system. The discomfort leads even conservatives to worry that the American democracy has become a plutocracy, even as a few other nutcase-conservatives worry that it is becoming a communist society.
If any kind of a inherited right to govern does not appeal to us, then surely the meritorious climbing up to govern should be ok, right?
Yep, a trick question that was! As this reviewer of Twilight of the Elites notes:
The ideal of meritocracy has deep roots in this country. Jefferson dreamed of a “natural aristocracy.”
What is the problem?
[America]
is governed by a ruling class that has proved unworthy of its power.
According to Hayes, the failures of the last decade created a deep
crisis of authority. We counted on elites to do the right thing on our
behalf. The Iraq War, steroid scandal in baseball, abuse cover-up in the
Catholic Church, incompetent response to Hurricane Katrina, and, above
all, financial crisis showed that they didn’t know enough or care enough
to do so. Twilight of the Elites advances two explanations for these
failures. The first emphasizes elite ignorance. People with a great deal
of money or power aren’t like the rest of us. Their schedules,
pastimes, and even transportation are different to those of ordinary
people. This isn’t always because their tastesare distinctive, at least initially. It’s often a job requirement.
In addition to their unusual lifestyles, elite types don’t spend much
time with averages Joes. At work, they’re surrounded by subordinates.
At home, they live in literally or metaphorically gated communities and
socialize with people similar to themselves. Again, there’s nothing
sinister about this. Because of their distance from the rest of the
population, however, members of the elite often have little idea what’s
going on in less rarefied settings.
One consequence, Hayes argues, is that elites have trouble making good decisions.
Any which way we are damned!
The defect of meritocracy:
... is not the inequality of
opportunity that it conceals, but the inequality of outcome that it
celebrates. In other words, the problem is not that the son of a postal
clerk has less chance to become a Wall Street titan than he used to.
It’s that the rewards of a career on Wall Street have become so
disproportionate to the rewards of the traditional professions, let
alone those available to a humble civil servant.
So, what can be done then?
For years now, Paul Krugman and Joseph Stiglitz have been writing about the problems with how the economic rewards are shared, in a language that even I can understand. Yes, I admit that these two are very much a part of the meritocracy. The elites. The NYRB reviews their books (End this depression now! and The price of inequality)
“Unfortunately,” Krugman writes,
we’re not using the
knowledge we have, because too many people who matter—politicians,
public officials, and the broader class of writers and talkers who
define the conventional wisdom—have, for a variety of reasons, chosen to
forget the lessons of history and the conclusions of several
generations’ worth of economic analysis, replacing that hard-won
knowledge with ideologically and politically convenient prejudices.
It might be tempting then to think that perhaps only the well-informed, intelligent, and meritorious ought to lead the governance. But, it assumes that those with whom we disagree are not intelligent, ill-informed, and not meritorious. Further, we have plenty of examples of failed leaders with plenty of merit! Any which way we are damned!
The NYRB reviewer goes on to note:
[The] most striking feature of these two books by Nobel Prize–winning
economists is their emphasis on politics. Economists have traditionally
insisted on the primacy of economic factors. In studying growing
inequality, for instance, they have focused on economic forces like
trade and technological change. Only in recent years (in part through
the urgings of iconoclasts like Krugman and Stiglitz) has there been a
turn to politics to explain America’s distinctive economic challenges—a
reorientation that brings economics back toward its original conception
as the science of political economy.
So, we are then back to the starting point: how do we deal with this politics and government?
By putting politics center stage, Krugman and Stiglitz greatly advance
that cause. Yet neither offers a fully convincing diagnosis, albeit for
very different reasons.
We are damned!
[We] have a choice. Politics got us into our economic mess, and only a revitalized politics can get us out of it.
Dream on!
[There] is no society without a governing class. Whether they’re selected
by birth, intelligence, or some other factor, some people inevitably
exercise power over others. Hayes mounts a powerful critique of the
meritocratic elite that has overseen one of the most disastrous periods
of recent history. He lapses into utopianism, however, when he suggests
that we can do without elites altogether. Like the poor, elites will
always be with us. As the word’s original meaning suggests, the question
is how they ought to be chosen.
James Surowiecki neatly summarizes Romney's issues related to Bain:
What Romney’s career shows, after all, is that once you’re at the top,
you can keep being called C.E.O. even if you’re not even working at the
company. You can get paid a hundred grand a year—chump change for
Romney, to be sure, but twice the U.S. median income—while doing, by
your own account, nothing at all for the company. You can build up an
I.R.A. worth tens of millions of dollars when the maximum annual
contribution is four thousand dollars. (Henry Blodget suggests here
that Romney’s ownership of Bain Capital shares may explain how that
I.R.A. could have legally gotten so big.) And, above all, if you manage a
private-equity firm, you can reap the benefit of the carried-interest
tax loophole and pay a much lower tax rate on your income than the vast
majority of Americans, and you can continue to reap the benefit of that
loophole even after you stop working for the firm. None of these things
is illegal, but none of them are things that ordinary Americans can
benefit from, and that’s the real scandal of Romney’s career at Bain.
It is different world that Romney comes from.
Not that Obama's world is all to familiar either. The two candidates are both elitists in their own ways. Their shared Ivy League elitism, for one; no wonder even the crooked Richard Nixon wanted to kick them in the nuts--he knew what that (lack of) elitist cred means.
[While] you might think one or the other group more preferable or more
offensive for reasons of politics, culture, or taste, you certainly
cannot argue that either one of them is in close touch with "average" or
"ordinary" or even "middle-class" people, however those terms might be
defined. And although both they and their supporters may shout about
"radical left-wing professors” on the one hand or "Gordon Gekko"
on the other, neither Obama nor Romney can plausibly claim to be
leading a populist revolution against the "elites" who are allegedly
destroying America.
“Anybody gone into Whole Foods lately and see what they charge for
arugula?” the senator said. “I mean, they’re charging a lot of money for
this stuff.”
Of course, during the campaign season, candidates have to go figure out a way to exorcise the Coriolanus curse; it is a tradition in democracies. Especially here in the US.
Even though I logically understand this, emotionally I cannot but think that country club Republicans will lead a very different life from mine, but that I will be able to relate to liberal luminaries ... Of course, my logic tells me that affluent liberals might not differ all that much from affluent Republicans. Thus, a tension between the logical and emotional understanding of the world, right?
A recent column in the Financial Times further illustrates the point. Martin Wolf, of the FT, writes about his conversation with Paul "the conscience of a liberal" Krugman, in which he notes:
At
this point we order: salade niçoise for Krugman; foie gras terrine for
me; and a bottle of sparkling water. This is definitely not going to be
up to the gourmet standards of some lunches with the FT.
I have always enjoyed reading Paul Krugman and Martin Wolf. (Turns out that for whatever reason this old post on Krugman was quite popular last week!) But, to realize through this simple comment that the world in which they live is so far removed from mine is quite startling, I suppose.
Ahem, that lunch was not up the gourmet lunch standards? Wow!
