college presidents and the collapse of big finance

In the NY Times this morning I saw that Frank Rich had, as usual, beaten up on  Lawrence Summers, but the most interesting part of the piece was his focus on Summers’  failed term as president of Harvard, which featured as many conflicts of interest as it did public gaffes and unforgivable arrogance.  (Summers, it has recently been reported, had done consulting work for an outside hedge fund while still President, and while presumably still managing its huge endowment).   Rich, a Harvard alum, was annoyed that Summers’  hedge-fund freelancing coincided with his public criticism of  Cornel West for his extracurricular activities.    Rich rightly pointed out the blatant double standard practiced by Summers and his supporters at Harvard, in which West’s media appearances were cited as evidence of his neglect of his academic duties, while Summers himself was quietly networking with government agencies, non-profits, universities, and financial firms instead of protecting Harvard’s fortunes, in every sense of the word.

But Rich seems to have missed one important aspect of  Summers’ demise at Harvard, which explains a great deal about his arrogance towards faculty in non-quantitative or money-driven disciplines: the extent to which both private and public higher education have become absolutely dependent upon–if not intertwined with–the very same speculative  “culture of greed” that is now in a state of collapse all over the country.  Like so many other one-time Masters of the Universe, Summers, with his insider’s access to power and inflated consulting fees, could brag that he made the world that others (reporters, humanists, pension-holders) could only interpret, even if this world turned out to be entirely fraudulent.  What’s more, though the bubble has burst, colleges and universities may find that this dependence will not be easy  to fix, no matter how many catastrophes the Larry Summers of the world may cause, since many of the assumptions about the wisdom and benevolence of financiers and college presidents remain in place.

The widespread assumption, for example, that university presidents should focus on fund-raising, not day to day operations, has resulted in a wave of non-academic university presidents who seem indistinguishable from the politicians, corporate and finance people they chiefly interact with.  Summers’ dealings with those hedge funds weren’t seen as detracting from his job, because they were seen as qualifications for the job, under the new rules of the corporate-style college presidency.  And colleges and universities across the country, both public and private, are now discovering that their futures–in the form of their shrinking endowments–are more connected than they would like with the fates of people who invested in “Sir” Allen Stanford or Bernie Madoff.

So what can we do to extricate ourselves from the ruinous self-delusions of people like this?  In my view, the only recourse we have is better governance in both the universities and in the corporations that are providing the cues.  Academics are often stock- or pension-holders, if nothing else, and academic organizations like the MLA and the AAUP should be mindful of the link  between corporate and university governance, the need for more transparency on both sides of the divide, and the importance of removing toxic leadership before they destroy too much of the value of their organizations.  And governance-minded academics need to support the forms of self-regulation and -oversight that exist in their own world, namely the accreditation and reporting groups that provide an important national audience (another public sphere, for you Habermas fans) for the devious and self-seeking behavior of their local administrators.  Where the law ends, shame begins.

Summers seems determined to wreak upon Obama’s reputation the same sort of magic he delivered for Harvard, so screw him and the smarty-pants Obama people who thought he was so goddamned indispensable.  A more typical and pathetic example is Bob Kerrey, a big fat failure of a president still unaccountably employed by the New School, though he had to pepper-spray the students who keep occupying buildings and demanding he resign.  This one-time “visionary’s” response?  According to the NY Post, “The former Nebraska governor and senator said he would not leave unless his “quality” of life “deteriorates.””


4 responses to “college presidents and the collapse of big finance

  1. Hey Dave – good analysis. Interestingly, the ‘old school’ president of my nice regional slau regularly gets pinged by the faculty for being too involved in day to day operations and not enough in networking and fundraising. Some of my colleagues still can’t wait for him to retire so we can get some young hotshot who will suck in and spray funding at us.

    It’s always been a sore spot how small our endowment is. As the Prez remarked at a recent faculty meeting, the upside of a small endowment is that you don’t rely on it and you don’t miss it when the market goes blammo.

    I’m all for planting bodhi trees and teaching under them. As soon as you want to do anything more recognizably modern in higher education expenses mount quickly, so it makes sense to send the dogs out after the money. I’m afraid their behavior is not even devious and self-seeking – it is a qualification for their job.

  2. Dave Mazella

    Thanks, Carl, and nice to see you here. The humanities do seem to allow versions of low-tech teaching impossible to do in our present Big Science departments, but this seems to be almost a source of derision in the new university.

    The problem with such a dual system of money-grubbing science and moneyless humanities is that very quickly all institutional power ends up in the hands of those who handle the money. Humanities, I’ve been told, helps with reputation, but scientists are far more concerned with comparing the dollar amounts of the money they bring into the university. This disciplinary imbalance, as far as I’m concerned, is one of the fundamental reasons why the humanities are increasingly taught by part-time faculty, as Anna noted in our last thread.


  3. michaelberryhill

    I was coming up for air and checked in your blog and thought this was right on target. Since faculty members don’t get together very often, blogging seems to be a great way to keep a lively discussion going about the things that matter.

    Michael Berryhill

  4. Dave Mazella

    Thanks, Michael. One of the reasons I like blogs is that faculty find themselves misrepresented to their publics all the time by people whose interests diverge from their own–the Bob Kerreys of the world, or, god help us, the Mark C. Taylors:

    At least blogs provide some alternatives to these kinds of “authorized” (read: corporatized) critiques of academia as narrow, specialized, elitist blahdee blahde blah blah. This is what we get, year in and year out from brave iconoclasts like Larry Summers or Francis Fukuyama.