Why Wall Street Greed is connected to education matters

Here's a concern for me: what's education worth? Why does it matter? Who cares about funding education and why? Education obviously has pragmatic purposes (learning the basics like spelling, arithmetic, etc.). That goes for earning a 4-year degree, too. Pragmatism isn't necessarily bad when it comes to education policy.

But Wall Street has cast a dark shadow over education in this country. In many ways, it seems that the aim of education has become tied up with only making money. The desire to make money isn't necessarily bad. But what happens to a culture when the financial industry rules above all else?

Before the financial crisis many students who started at the Ivies had one thing in mind - making it to Wall Street and making it big. Everyone wanted to be in finance. I have a hunch that that certainly wasn't out of a true passion to work 80 hours a week in stocks and bonds. Obviously that drive has changed - that's a good thing. Young adults are rethinking their options and looking into other industries. When it comes to the way education matters, it's painful to learn that Wall Street rewarded those who were not entrepreneurial and were not interested in growing companies for the right reasons (to create solid products, develop strong relationships). Instead, they were driven by greed. Some may accuse me of simplifying the aims. Granted, it's a complicated story, and even good writers like Michael Lewis have a hard time untangling the details . But from this angle, it seems clear as day. There is validity in those who can analyze from the outside - that's an example of why education matters and why the financial industry ought to be regulated to some degree.

There's another problematic piece to this whole story of greed and economics. Obama has a mission to improve things, especially education. As I already said, that's admirable. But take a look at those who are closest to him, Larry Summers. It seems Summers has a questionable history when it comes to finance - take Harvard as an example. The school last year had a $36.9 billion endowment (yes, that's correct. I didn't make an error in the numerical evidence). Keep in mind, in 1990 its endowment was at a healthy $4.8 billion. The financial crisis hit its guilded halls and in the first four months of the fiscal year of 2008, Harvard lost a staggering $8 billion. To those who are aware of the endowment numbers for other Ivies, that loss is mundane and shocking. For example Columbia's endowment is around $7 billion, and Brown - my alma mater as a Ph.D. student - in Ivy-circles is known for being the poorest Ivy of them all. Its coffers are at roughly $2 billion. (Brown struggles to keep their graduate programs afloat and sadly many people who have gone there have paid the price, and I don't mean in terms of dollars. That story is to come later).


On top of that, when Summers left the school , the man made millions speaking to companies that later collapsed or needed bailout money from the government. The name Harvard is so powerful in academic and financial circles that any other reputable school's value shrinks by comparison (I'm not suggesting that that is valid or necessarily true). But will Harvard's emblematic prowess disappear with the age of excessive deregulation that defined the post 9/11 world? There are murmurings in the lovely, ueber-intellectual streets of Cambridge, nervous chatter can be heard around Harvard Square and in popular watering holes like Grendel's Den, that Summers drove the university into the ground. He did so by making poor and risky investment decisions, or so many people suggest. One thing is certain, and as VF's article illustrates, Harvard is facing some hard times.

But the U.S. is facing even harder times, and perhaps this economic downturn will result in new analysis and positive change for educational institutions. This moment could also us enable us become better guardians and attend to our educational priorities. It just might allow us to get back to the basics, and that would mean re-emphasiing good, well-rounded education, over a putatively utiltarian approach that equals just getting some degree you can "use" in order to make, for example, oodles of money on Wall Street. All the while your personal life remains distant from your existenial experiences or even worse it is just a continual storm of chaos. After al, if those who earned practical degress (MBAs, business degrees, finance, etc) can't get jobs to pay of their student loans, maybe the sciences - soft and hard - as well as the liberal arts and humanities will benefit.

Crises don't have to lead to future crises. If we seize this moment, reasseess our values about money and finance and Wall Street, and have people educated in stronger, better ways, this society could very well flourish.

More endowments needed

Saw this report a couple of weeks back about a businessman, Datuk Ghazali Mohd Yusoff, who gave UKM RM1 million to endow a chair at the Institute for Environment and Development (Lestari) at UKM in memory of his mother. We need more endowments of this nature as part of a long term plan to wean our public universities off public funding. It's a model which most universities in advanced countries led notably by the US (UK and Australia are getting into the act as well) where public funding is being slowly cut and fees are increased at the same time as endowments which can be used to fund chairs and decrease fees for needy students.

Fixing the Community Organizing Funding Disaster (Community Organizing and Urban Education)

To read the entire series, go here.

Community organizing groups spend an inordinate amount of time grubbing after money—often fairly small amounts of money when seen from the perspective of large foundations. And organizing groups often have to tweak what they do in order to fulfil the requirements of a funder. Even more problematically, many organizing groups are forced to get funding for purely service oriented activities in order to survive over the long term. While I think organizing groups need to think more carefully and complexly about how they might embrace more service work in order to reach out to more marginalized populations more effectively, the kind of service funding these groups usually receive is mostly a hodgepodge of what happens to be “hot” at any moment.

It seems obvious that we need to fundamentally change the funding model for community organizing. But how? Here I want to talk about what are called “permanent endowments.” Permanent endowments are large chunks of money that are placed permanently in a fund out of which only a portion of the interest is spent every year. Such endowments provide a guaranteed level of operating funding for those organizations that have them.

Who usually has endowments? Looking across the web, you find the usual suspects: universities, private schools, churches, and museums. But there are a range of other groups that can have foundations, including professional organizations, recreational and other natural areas. I found a ballet group, a music festival, home for pregnant teens, a counseling center, and more.

What brings all these groups together is a sense that their existence and functions are permanent.

This, of course, raises some difficult issues when one comes to organizing. How can one assume that one organizing group or method is going to be the most effective over time? How does one decide “which” organizing group to fund, and how does one prevent an endowment from actually destroying the kind of creativity, flexibility, and radical challenge that organizing may require in order to stay “healthy”.

To cite an old example, many have argued that the reason that Martin Luther King and other new organizing groups were able to emerge in the South during the civil rights movement was ironically because many Southern states had banned the NAACP. This seems to have opened up space for new thinking and new organizations, and removed the suppression of risky action that the NAACP seems to have been perpetuating to some extent. More contemporaneously, I think it is accurate to say that a certain level of uncritical dogmatism and self-congratulatory thinking among the neo-Alinsky organizing groups that currently dominate the organizing “scene” may be hurting the emergence of new approaches.

But one would not need to fund individual organizing groups in order to relieve them from some of the burdens of fundraising and the potentially destructive force of current “fads” and program mandates from distant funding organizations. Instead one could fund a local institution designed specificially to support organizing groups—old ones and new ones. By being based in a building that it owned, this group could provide basics like office space, copy machines, phones, technology and tech support. It could have a grants officer on staff to help organizations target their appeals and reduce the burden of fundraising. It could provide multi-year internships (with benefits) to allow individual organizing groups to bring community members in and train them in organizing. It could provide child care and meals and have a van and money to pay drivers to pick people up and get them to meetings. It could provide small reimbursements to participants to make it at least a “neutral” cost for them to go to a meeting. It could have a shared receptionist, and be open from early in the morning to late at night. It could have a board of directors drawn from a wide range of local progressive organizing groups and a carefully drawn mandate that ensured that it was able to “boot” dying organizations and bring in promising new ones. And it would have a constitution designed to ensure it remained true to a broad set of progressive commitments.

Such an endowed umbrella organization would ensure, just like with museums, universities, and beloved parks, that organizing is here to stay, especially in small cities like Milwaukee, where organizing has long been on “life support.” Through its board, it would force local organizing groups to work together to some extent, despite whatever disagreements they might have. If the building was big enough, it might allow the emergence of some more creative experimental relationships between organizing and service groups which I am increasingly convinced are crucial. In fact, simply because it would (I think of necessity) provide child care and meals and small reimbursements to participants, it would already be involved in a kind of “service” that would make participation as much a reality for people struggling on the margins as for professionals and other middle class folks like myself.

Where would the money come from? Well, of course, I don’t know. But if it had a building and an institutional name, it might be appealing to some funder that usually gives out program grants that do not leave any permanent legacy in the community. I could imagine some rich progressive person who would love to have their name permanently on a building or permanently on the name of an institution whose job was to stick a thumb in the eye of privileged oppressors permanently.

How much money would it require? Well, after glancing around the Internet, it seems like a round number like 4% is about what you can expect to spend every year from an endowment while still maintaining it over time given inflation. So let’s go with that as a rule of thumb (see this for those who are interested). And let’s assume you need, say, 2 million dollars for a building (including renovation) in a not necessarily high-priced part of town. So then if you have an operating budget of $250,000 (which isn’t a lot if you have a few employees), you need an endowment of around 6 or 7 million dollars. Or a total of 8-10 million dollars.

This may seem like a lot of money to most of you (or me) but there are plenty of folks out there in our increasingly income unequal society for whom this isn’t really that much.

Carnegie made his name forever by creating libraries across the United States (and beyond). What if some funder decided to stop trying to fund an endless series of cool sounding projects, and instead said, “I want to provide a permanent base for organizing in a collection of cities in America.”

[For those of you who think I've totally gone "off the rails" of education policy, here . . . . Well, look. If you are going to get interested in education organizing based in the community and not in schools then suddenly you've got to ask a whole new set of questions. We're used to talking about public schools which seem obviously to be a public, government funded function (regardless of how poorly they are funded). But now we're talking about an intervention in education that can't take government funding at all.]

Fixing the Community Organizing Funding Disaster (Community Organizing and Urban Education)

To read the entire series, go here.

Community organizing groups spend an inordinate amount of time grubbing after money—often fairly small amounts of money when seen from the perspective of large foundations. And organizing groups often have to tweak what they do in order to fulfil the requirements of a funder. Even more problematically, many organizing groups are forced to get funding for purely service oriented activities in order to survive over the long term. While I think organizing groups need to think more carefully and complexly about how they might embrace more service work in order to reach out to more marginalized populations more effectively, the kind of service funding these groups usually receive is mostly a hodgepodge of what happens to be “hot” at any moment.

It seems obvious that we need to fundamentally change the funding model for community organizing. But how? Here I want to talk about what are called “permanent endowments.” Permanent endowments are large chunks of money that are placed permanently in a fund out of which only a portion of the interest is spent every year. Such endowments provide a guaranteed level of operating funding for those organizations that have them.

Who usually has endowments? Looking across the web, you find the usual suspects: universities, private schools, churches, and museums. But there are a range of other groups that can have foundations, including professional organizations, recreational and other natural areas. I found a ballet group, a music festival, home for pregnant teens, a counseling center, and more.

What brings all these groups together is a sense that their existence and functions are permanent.

This, of course, raises some difficult issues when one comes to organizing. How can one assume that one organizing group or method is going to be the most effective over time? How does one decide “which” organizing group to fund, and how does one prevent an endowment from actually destroying the kind of creativity, flexibility, and radical challenge that organizing may require in order to stay “healthy”.

To cite an old example, many have argued that the reason that Martin Luther King and other new organizing groups were able to emerge in the South during the civil rights movement was ironically because many Southern states had banned the NAACP. This seems to have opened up space for new thinking and new organizations, and removed the suppression of risky action that the NAACP seems to have been perpetuating to some extent. More contemporaneously, I think it is accurate to say that a certain level of uncritical dogmatism and self-congratulatory thinking among the neo-Alinsky organizing groups that currently dominate the organizing “scene” may be hurting the emergence of new approaches.

But one would not need to fund individual organizing groups in order to relieve them from some of the burdens of fundraising and the potentially destructive force of current “fads” and program mandates from distant funding organizations. Instead one could fund a local institution designed specificially to support organizing groups—old ones and new ones. By being based in a building that it owned, this group could provide basics like office space, copy machines, phones, technology and tech support. It could have a grants officer on staff to help organizations target their appeals and reduce the burden of fundraising. It could provide multi-year internships (with benefits) to allow individual organizing groups to bring community members in and train them in organizing. It could provide child care and meals and have a van and money to pay drivers to pick people up and get them to meetings. It could provide small reimbursements to participants to make it at least a “neutral” cost for them to go to a meeting. It could have a shared receptionist, and be open from early in the morning to late at night. It could have a board of directors drawn from a wide range of local progressive organizing groups and a carefully drawn mandate that ensured that it was able to “boot” dying organizations and bring in promising new ones. And it would have a constitution designed to ensure it remained true to a broad set of progressive commitments.

Such an endowed umbrella organization would ensure, just like with museums, universities, and beloved parks, that organizing is here to stay, especially in small cities like Milwaukee, where organizing has long been on “life support.” Through its board, it would force local organizing groups to work together to some extent, despite whatever disagreements they might have. If the building was big enough, it might allow the emergence of some more creative experimental relationships between organizing and service groups which I am increasingly convinced are crucial. In fact, simply because it would (I think of necessity) provide child care and meals and small reimbursements to participants, it would already be involved in a kind of “service” that would make participation as much a reality for people struggling on the margins as for professionals and other middle class folks like myself.

Where would the money come from? Well, of course, I don’t know. But if it had a building and an institutional name, it might be appealing to some funder that usually gives out program grants that do not leave any permanent legacy in the community. I could imagine some rich progressive person who would love to have their name permanently on a building or permanently on the name of an institution whose job was to stick a thumb in the eye of privileged oppressors permanently.

How much money would it require? Well, after glancing around the Internet, it seems like a round number like 4% is about what you can expect to spend every year from an endowment while still maintaining it over time given inflation. So let’s go with that as a rule of thumb (see this for those who are interested). And let’s assume you need, say, 2 million dollars for a building (including renovation) in a not necessarily high-priced part of town. So then if you have an operating budget of $250,000 (which isn’t a lot if you have a few employees), you need an endowment of around 6 or 7 million dollars. Or a total of 8-10 million dollars.

This may seem like a lot of money to most of you (or me) but there are plenty of folks out there in our increasingly income unequal society for whom this isn’t really that much.

Carnegie made his name forever by creating libraries across the United States (and beyond). What if some funder decided to stop trying to fund an endless series of cool sounding projects, and instead said, “I want to provide a permanent base for organizing in a collection of cities in America.”

[For those of you who think I've totally gone "off the rails" of education policy, here . . . . Well, look. If you are going to get interested in education organizing based in the community and not in schools then suddenly you've got to ask a whole new set of questions. We're used to talking about public schools which seem obviously to be a public, government funded function (regardless of how poorly they are funded). But now we're talking about an intervention in education that can't take government funding at all.]