Harvard’s endowment is $37.1 billion. And it only returned a very disappointing 8.1% in 2017. Whether that’s because Harvard’s investment arm is “lazy,” “fat,” and “stupid,” as characterized by McKinsey, or the constraints of social justice-guided investment choices. But whatever. Their money. Their investments. But Faust’s whining about Harvard’s billions?
HMC’s trailing performance has worried University President Drew G. Faust, who last year warned the low returns would “constrain” budgets across the University for years to come. That rang true last year when the Graduate of Arts and Sciences, citing HMC’s low returns, cut the number of graduate students it accepts by 4.4 percent. Then, graduate students and professors learned they would receive smaller pay increases that were outpaced by the rate of inflation. Harvard also faces a number of financial challenges amid potential decreases in federal research funding.
Who cares? You should, because Drew Faust took her problems to Congress when she feared that Harvard’s endowment didn’t merely reflect its really mediocre investment skillz, but could be subject to (dare I say it) tax.
Drew Gilpin Faust, the president of Harvard University, has been lobbying in Washington against a Republican proposal to tax large university endowments and make other tax and spending changes that might adversely affect universities. Faust says the endowment tax would be a “blow at the strength of American higher education” and that the suite of proposals lacks “policy logic.” Perhaps so, but they have a political logic.
Is the problem that Republicans no longer appreciate education?
The proposed tax and spending policies aimed at universities are surely related to the sharp recent drop in support by conservatives for colleges and universities. According to a recent Pew Research Center report, 58 percent of Republicans and Republican-leaning independents say that colleges and universities have a negative effect on the way things are going in the country, a figure that has grown significantly in the past two years.
Republicans prefer stupid people? Harvard lawprofs Jack Goldsmith and Adrian Vermeule proffer a different perspective, broken into four parts.
First is the obvious progressive tilt in universities, especially elite universities. At Harvard, for example, undergraduate students overwhelmingly identify as progressive or liberal and the faculty overwhelmingly gives to the Democratic Party.
Second, the distinctive progressive ideology of elite universities is relentlessly critical of, to the point of being intolerant of, traditions and moral values widely seen as legitimate in the outside world. As a result, elite universities have narrowed the range of acceptable views within their walls.
Third is the rise of anti-conservative “mobs,” “shout-downs” and “illiberal behavior” on campus, as New York University social psychologist Jonathan Haidt describes it.
Fourth is the public contempt of so many university academics for those who fund their subsidies.
Making endowment investment tax exempt means we’re making a societal choice of helping to finance education. As a concept, this is a wonderful thing, as education should benefit everyone in society, even if it’s fabulously well-endowed elite schools like Harvard. But to wrap up Goldsmith’s and Vermeule’s four points, is society willing to finance political indoctrination rather than, say, physics?
The curious response is that elite universities shouldn’t be blamed for being smart. It’s what they do.
The best schools engender rational thought. Of course conservatives don’t like them.
Should less-than-progressive politicians, who are making the tax decisions, and a less-than-well-educated public who elects these politicians, punish schools because smart people are progressive, believe in progressive causes, act in furtherance of their progressive beliefs? The crux of this argument is that these are our best and brightest, and what the best and brightest believe is that progressivism is good and conservatism is not.
Is it their fault that smart people think the way they think? After all, “brilliant people agree with me.”
Not being Harvard worthy myself, perhaps my problem is a matter of my intellectual challenges, my inability to grasp why social justice is the one true god and doing everything possible to teach students what to believe is worthy of societal financing.
But then, there is another possibility as well, one that even someone like me can grasp. Progressive academics, bent on the creation of their Utopia, have had a generation to stuff their chairs with like-minded, deeply committed and unduly passionate “scholars,” such that they’ve created an echo chamber (some might call it a circle-jerk, but academics tend to be upset by the language us vulgarians employ) of confirmation.
At the same time, anyone who fails to share and appreciate their Utopian dreams must be, well, stupid, and therefore unworthy of a seat at their faculty teas. Just as brilliant people agree with me, anyone who doesn’t must be an idiot. And so the scholars indulge their fantasy that they are smart, and therefore right, because they’ve surrounded themselves with similarly smart people who similarly share their religion.
But the public? Not too smart. And the politicians elected by the public? Either not too smart or beholden to stupid people for votes, and therefore inclined to pay back higher educators for being smarter than they are.
Except maybe people like their traditions, even if academics are on a higher intellectual plane? Or maybe the disdain reflects what Goldsmith and Vermeule explain, an unwillingness to use tax exemption to finance the indoctrination of a political ideology.
But educational institutions should not be surprised when these attitudes and behaviors prove unappealing to a Congress and executive branch that are largely in the control of conservatives. Conservative politicians and their constituents hear, on the one hand, that government owes universities a continuance of largesse and, on the other, that conservatives are ignorant, unworthy or corrupt. This sounds suspiciously like special pleading by an intellectual elite that wants to indulge in social criticism at the expense of the criticized, in both figurative and literal senses.
Maybe progressive academics are right, are smarter than the rest of us. Maybe guys like me really are too dumb to get it. So, you’ve got $37.1 billion. Invest it wisely. Pay for whatever it is you think is worth the price and do whatever you have to do. Why do you need dumbos like me to finance it for you, if you’re so friggin’ smart?