Harvard alum Carroll Bogert has an excellent op-ed in the New York Times about what to do with Harvard's big endowment besides make it even bigger. She notes that T

he university’s endowment stands at $35 billion and is likely to hit $100 billion in a decade. At an annual growth rate of 13.3 percent — the average since inception, and regularly exceeded in recent years — Harvard can cover next year’s entire undergraduate financial aid budget with what it earns in the market in eight and a half days.

Deciding that swelling this flood of money was pointless,

A few hundred alumni have formed Harvard Alumni for Social Action, to try to channel 25th-reunion giving to destitute universities in Africa. In three years, we’ve raised $425,000 — a lot for the University of Dar es Salaam but hardly a match for our annual class “gift.” And evidently not enough to win the respect of President Faust, who has begged off meeting the group. Harvard clearly doesn’t like any effort that might divert a dollar away from its Cambridge coffers.

Bogert offers some decent explanations for why college grads - or at least Harvard grads - love to make the rich richer, but more to the point, you can find the Harvard Alumni for Social Action here.

Some of the best recent defenses of public higher education have come from the business press, in the form of attacks on the huge and growing resource gap between even the strongest publics and the top privates. The powerful 2007 essay, "The Dangerous Wealth of the Ivy League," was published by Business Week, and begins with a wicked dig at vanity dorms at Princeton and goes on to say what few education leaders will say: the privates are cherry-picking faculty at the publics, paying much higher salaries, spending far more per student that their former peer "flagship" publics, and pulling away in lab facilities, publications, and other measures of knowledge production.

A year before that, the NY Times business columnist Joe Nocera criticized top-end fundraising in "The University of Raising Big Money." The movement for increased payouts at the fattest endowments kicked in later, and Nocera may have helped it along.

Public universities have over 4/5ths of total enrollments. Their quiet impoverishment affects everything - general skills, social integration, upward mobility, new technology, useful research, the general development of people and their society. Pulling top-quality resources back to the elite privates that educate 1 -2 percent of the college public is a perfect recipe for steady decline. Many more people need to start noticing this.

About a month ago I went to Sacramento with a group of University of California faculty to try to offer legislators a faculty perspective on the need to spare California higher education from another round of cuts. We had messages developed by two reports that I had co-authored with other members of the Academic Senate's systemwide University Committee for Planning and Budget (UCPB).

Message 1: UC's state funding isn't too high, in spite of what the Governor alleged of all state agencies when he proposed across-the-board cuts, since it still hasn't gotten back to its 2001 levels.

Message 2: private money can't replace public money (even if we wanted it to), since there isn't enough of it.

Message 3: the Governor's proposed cuts can be filled in only with massive student fee hikes. (If all of the cuts were replaced only with student fees, the latter would need to increase 45% in one year.)

Since such an increase is unethical, counterproductive, and politically impossible, the UC Regents will increase the main student fee 7% percent this week and let the cuts come out of operations. This leads to . . .

Message 4: Students will pay more, and get less.

We were met by Democrats with a combination of agreement and fatalism. One said, "of course you're right, these cuts hurt the university and it hurts students. But there's no money this year. And there won't be any money next year either."

This is of course a political statement, not a financial one. There's plenty of money: even the state budget, perpetually hamstrung by Prop 13 requirements, controlled by the 1/3 Republican minority, riddled with constitutional budget guarantees for huge sectors like K-12 ($50 billion a year right there), and pitting higher ed against our incredibly expensive and yet still always federally-sanctioned prisons, receipts are down only 1 percent this year. The big structural deficit could be solved some other way - like the Governor reversing the cuts in vehicle licensing fees that account for about half of it. Whatever: our state poverty is political, and it's a politics that suits a governor who is already running for some other office.

Since politics is leverage, not logic, we asked about that. The Dims leadership won't do anything for higher ed this year - what's the payoff in that? The Chair of the Board of Regents, Richard Blum, investment banker and husband of Sen. Diane Feinstein (D-Calif.), seems already to have agreed not to embarrass the Governor with large fee hikes or enrollment freezes. And enrollment freeze was our only leverage in Sacramento. The UC administration gave that up, though threatened it politely for next year. No wonder even the Dems were promising nothing.

One of us went back to Sacramento last week and visited a Republican leader of one of the leg's higher education committees. This state Senator said he wanted UC to thrive and remain admired, but wasn't sure we were doing enough to fundraise in all categories. In fact, UC faculty have doubled their sponsored research (as measured in real dollars) since 1990. UC fundraisers have tripled their fundraising income in the same period. Licensing income is up but remains small (always under 1% of UC's overall budget). None of these numbers come close to addressing the budget cuts on the gigantic scale on which UC operates.

The key fact about public higher education is its sheer size. Better fundraising might close some gaps at a school with 1000 or 10000 students, but not at one with over 200,000. People say well, Princeton does great fundraising and look how rich it is - what's wrong with UC Berkeley?

What's "wrong" with Berkeley and UC is in fact what's right with it. Total enrollment in the Ivies in 2006-07 was 112,839. That means that the entire Ivy League's enrollment was 90,000- 100,000 less than the UC system alone - to say nothing of Cal State. The Ivy League's endowment was about $81 billion in 2006 (vs. UC's $6 billion or so), or say 20 x per student of UCs.

It just doesn't make sense to compare UC to an Ivy League university - it's a different kind of institution. UC makes enormous efforts in both research and fundraising, but on behalf of the population of a state that is bigger than most countries, and not just for a few thousand students at at time. This leads to . . .

Message 5: The only way to combine wide public access with the highest quality is with great public funding for public higher ed.

The real question is this: do we as a society really want to educate everyone to the highest possible level? That is, are we really trying to minimize the waste of the whole society's talents or not?

If we don't support great public funding for public universities, then our real answers are no. And for the case that society's major players didn't support this, see my new book!

Here's a good example of a state governor - Ohio's - facing down a budget deficit and maintaining state funding for higher ed next year, along with his long-term plans. Here in California we should be so lucky.

The key quotation:

[Gov. Strickland] did not recommend any cuts in the nearly $2.38-billion that colleges are receiving from the state this year, an amount that represents a 7.7-percent increase over the previous fiscal year. The governor also proposed continuing to finance a statewide freeze on tuition that has been in effect for two years.

"In my judgment, higher education had been the budget whipping boy for far too long," he says. "It was time to keep faith with higher education."

Amazing! Higher ed is obviously a crucial long-term investment. It's also economically countercyclical in the short term. In the early 1930s, Hoover, Mellon and the other laissez-faire folks running the federal government watched consumption drop, profits decline, workforces shrink (in response to falling profits), and consumption drop even further as people lost their jobs. We're again learning a lot of New Deal lessons about the stabilizing (and constructive) effects of government action and investment. I hope in California we can follow Ohio's lead and learn them before another 2-3 year cycle of cuts (potentially our second 15-25% drop just in this decade), damages UC and CSU all over again.

Who is our evil twin here in academia? The media?

They too are in the business of putting together and distributing information, so they are our twin. They lack our analytical standards and put out all sorts of nonsense, plus are rich and drive out real knowledge with their fake kind, so they are evil.

Or so it often seems when a member of the university community watches ten minutes of silly cable news or Bill O'Reilly saying the most absurd, falsifiable things without fear of challenge. The media seems to specialize in ad hominem argument - Bill can prove the falsehood of any statement in the New York Times by saying "the VERY LIBERAL New York Times" six times a minute. They are also pathetic copy-cats, recycling the same stuff from one source that wasn't correct in the first place. I saw this when three articles in major papers covered the Mark Yudof nomination to be UC's president with identical paragraphs on how his high Texass salary might be a problem. It's really pre-medieval, or plagaristic, or subcivilized, or well, just not very academic.

But I digress. My point here is that we should love our evil twin better and try to help it. Not Fox News, exactly, but print journalism, which is getting shafted by ad revenue declines and the unoriginal revenue thinking of its new owners. David Carr had a piece on the problem yesterday. He stirs the usual stuff around into a big ambiguity pie so we can conclude there is no solution to the end of the independent information train that is essential to democracy. So don't read the piece for that.

There was this interesting passage, based on a good quotation:

John Morton, a longtime newspaper analyst, is more pessimistic. “The industry is meeting these challenges by cutting, by reducing the news hole and the people who fill it,” he said.

“Newspapers have lived through recessions before and come back strong,” he added. “My worry is that when things do turn around, they will be coming back in an environment that is more competitive than ever because of the Internet, and that after all these cuts, they will have less stature, less product quality and less talent — all of the things that they need to compete.”

While I was on the line with Mr. Morton, I mentioned that we had been talking about newspapers on and off for over a decade. That makes us almost friends, I said. But we are fast becoming the kind of friends who see each other only at funerals and wakes.

Ha ha ha. My point here is that the same thing is happening to public higher ed. Capacity has been hollowed out for twenty years. Quality is still OK in core areas. But we regularly "start and starve" new initiatives, and can't throw whole teams at any research problems, and can't rapidly upgrade when we need to. This chronic underfunding needs to be seen for what it is, a recipe for stagnation and decline.

How can we describe it so that folks will see college funding as the social crisis it really is?

The New York Times had a good piece about states cooking their graduation books. See the sample stats at left. California, self-described world headquarters of the knowledge society, had an actual high school graduation rate of 67%.

When UC President Clark Kerr defined the university at the heart of a new knowledge society nearly fifty years ago, he no doubt thought 67% would by now be the percentage of college grads in California. One scholar cited in the piece pointed out that at this rate California will reach its graduate rate target in 500 years.

"In California, we're patient," an official replied.

Actually, no we're not.

One of my colleagues on the nano and society project who teaches at Berkeley's business school said the signs of the Brazilianization of California are everywhere. I mentioned this to another guest who has been working abroad for years. She said no, the theory of California leaders is now closer to that of Ghana's.

OK we're getting far from home. But still, how many more decades are these crappy, falsified, HS grad rates going to be allowed to contradict what we say we stand for?

Mark Yudof has been nominated to move from being the head of the University of Texas system to the presidency of the University of California system. I'm completely relieved that we found someone who has been running a big public university system and who has a record of fighting state governments for more public funding. Basic arithmetic shows that public universities are great only when they receive serious public funding: here's my Planning and Budget committee report on the UC case.

Here are two pieces by Yudof, both originally published in the Chronicle of Higher Education. The first is on the decline of public funding for public higher ed, and the second on the value of university systems to their states.

There are things to debate, but I'm also relieved that we may get a president who's given public funding this much lucid thought, and started writing about it in the early 1990s.

Inside Higher Ed has a good overview of the Bush II Presidential Library controversy. The facility at Southern Methodist will have three parts, including a policy center that aims to "celebrate" the president and his record.

The obvious problems include:

• knowledge being produced on a university campus without the normal safeguards of peer review
• knowledge that will be received by the media and the public as valid because it comes from a university campus.

This arrangement is another sign of the difficulty universities have staying independent in the midst of desperate struggles for either adequate funding or big-league competitiveness (SMU's issue). But we shouldn't pick on SMU. The Hoover Institute at Stanford has for decades openly pushed conservative positions and systematically built conservative networks of scholars and top officials without feedback from Stanford's overall faculty. UC Berkeley recently signed a deal with BP that will allow BP scientists to conduct proprietary work in facilities built with public money and housed on campus.

The appointment of Donald Rumsfeld to a Hoover Institute position raised the issue at Stanford. An on-line petition against the hire raised over 4300 signatures. Some faculty proposed a motion last fall to investigate the process that led to the Rumsfeld hire. The Stanford Daily reported Philosophy Prof and motion advocate Debra Satz explaining, “I find it hard to understand the reasoning in appointing Rumsfeldnot because of his views, but because of his competence.”

The SMU Bush connection is a little more fawning towards a figure who is, like Rumsfeld, a little more disgraced than the normal donor or beneficiary. It's easy to assume that university resources would go into the partisan defense of weak records rather than into history and policy analysis. It's hard to image Chalmers Johnson being invited to Hoover or SMU to speak. The SMU case may help raise awareness of the fragility of academic freedom when it comes up against powerful interests, especially ones that haven't done too well and feel that they have something to prove.

Meanwhile, Stanford faculty are using Hoover's hiring of Donald Rumsfeld as a visiting fellow to try to established a new review process for affiliated institutes that trade on Stanford's name.

The Council for Aid to Education has released its figures for higher education philanthropy in 2007. Overall donations were up 6.3 percent, which is close to the annual average for the last ten years. The Chronicle of Higher Education story also offered what have become standard comments about the skew in private giving towards the very top.

Large donations to the nation's wealthiest colleges accounted for much of the increase. The top 20 recipients (see table), which represent just 2 percent of the survey's respondents, raised more than a quarter of all the contributions.

"The top 20 historically have controlled a lot, and they're controlling a bigger and bigger share of private donations," said Ann E. Kaplan, the survey's director. "It's large gifts to large institutions that drive national trends."

The top 2 percent of institutions also accounted for 30 percent of the year-over-year growth in these donations. And "megagifts" remain a major factor in the shaping of higher ed.

Everyone is worried about the impact of the economic downturn that has already started. Ironically, it may only increase the influence of the megagifts. As one CHE consultant noted, "If the market falls and people's wealth shrinks, then you start seeing a slowdown, or people postponing capital contributions. . . . But the big donors, who drive these numbers anyway, tend to be stable."

There's another issue that is never mentioned. Little of this giving is unrestricted, so at public universities it cannot be applied to general operating costs to make up for public funding cuts. When our UC Planning and Budget committee heard officials from the Treasurer's Office talk about this, they estimated that unrestricted gifts are 2 percent of the total. Even in scholarship giving, only 20 percent are unrestricted. Over a period of years, the effect is not a happy substitution of public with private funding, but a campus divided by an iron curtain. The stem-cell research facility may be state-of-the-art, while the math department, dependent on public money, can't pay for phones in faculty offices or for TAs to give actual feedback on homework in calculus lectures with 500 students.

There is no evidence at all that private money is willing to pay for mass quality higher education - broad access at a top level. It pays for special projects for the best and the most famous. We are getting plenty of that, but losing the mass quality that underwrote both post-war prosperity and general quality of intellectual life.

Student loans produced a lot of stories about conflicts of interest last year, and some mild clean-up activity. One pattern there was kickbacks - gifts from private loan companies in exchange for favors from university counsellors. Another was a revolving door between universities and private loan companies that increased collusion between the two. Sallie Mae sought a buy-out that would have given its CEO over $225 million personally (the sale did not go through; I don't know CEO Albert L. Lord's final cut, but he continued to seek a $900 million breakup fee after the deal collapsed). The Department of Education admitted to having overpaid private student loan companies.

The obvious theme here is that the activities of these private agencies increased the cost of obtaining a college degree. There were good stories about just how broke students are in part because of high-tuition coupled with high-priced loans. The most famous response was that some of the country's wealthiest private universities - led by Harvard - switced from loans to grants for lower-income students.

Whatever the response, a core principle remains: increasing the number of steps between the buyer and the seller - the student and the university - increases the costs to the buyer. We used to know that "middlemen" like railroads were bad for people like farmers. We seem to need to learn this all over again with higher ed.

The Times of London - of all papers - had a good piece by Alexi Mostrous on Martin Amis's 80,000 pounds a year from the U of Manchester, in exchange for which he performs a "distinctly achievable" 28 hours of work - per year. What was good was that Mostrous did not make Amis's featherbedding into a metaphor for all UK professors. "His salary is more than 240 times that of an average full-time academic, who earns £38,933 a year for 59 hours a week." There it is - the real story for college teachers everywhere in the known world - paid not much for doing a lot.

The piece also explains why they'd pay this big salary for almost no effort: Amis isn't getting paid to work, but paid to endorse the Manchester university brand. His celebrity endorsement sends the brand value up, which sends applications up, which improves fee revenues, while also raising the university's status, which increases its power to hire high-powered professors, who will in turn contribute more publications to the university's list for the Research Assessment Exercise that apportions future funding - just as Amis's many publications will too. Their world rank might eventually go up. Then will then be able to hire more lecturers for 38k pounds (or 2500 pounds per course) to do the actual work.

In buying the Amis name, Manchester's administrators were behaving like completely rational businesspeople running a market-oriented business. Unfortunately, they're actually running a university. Once you go down this path, it's almost impossible to get off it. It's not obvious that anyone thinks there's a reason to have a university that isn't divided between stars and labor.

Inside Higher Ed has a report on university endowment growth last year. If you follow this topic the data won't surprise you. The rich got richer faster - Harvard and Yale, the two biggest, grew 23 percent and 28 percent respectively. The report includes a table showing that the smaller you are, the slower you grow, which of course is a familiar rule to those of us living in eagerly Darwinist America. It's worth noting that the lowest average growth figure is 13.6 percent, which is very high.

The report does not note three other important things.

First, endowment growth has been decoupled from the growth of the overall economy, of state budgets, and of general educational support for public universities. 13.6 percent is 2-4 times higher than average state increases, faculty salary increases, and the like. As I've noted before, the universities that educate 90 percent of higher ed students have little or no endowment income and are barely keeping ahead of inflation - and only in the last couple of years. Endowments index higher ed health about as well as Brad Pitt's income indexes the health of yours and mine.

Secondly, coverage of "creativity" in finding "alternative" investment strategies for university endowments lags behind coverage of the financial sector in general. There, creativity has become a facetious proxy word for blind faith in structured investment vehicles whose risk "beta" is obscure and which have been starting to blow up. Universities will not be getting these kinds of endowment returns this year or the next or the next. Some may lose money just like the pros at Merrill Lynch and Citigroup have managed to do.

Third, this is a good time to think about restoring stable, broad-based funding for majoritarian higher ed. This means taxes seen as a public investment, and not the transient miracles of the financial loaves and fishes that in any case are lavished not on the general followers but on the few.

Everybody hates the incessantly rising costs of medical care. Commenting on the latest inflation numbers, the economist Dean Baker puts the cost of higher education in the same category.

The major forces pushing the rate of inflation higher continue to be medical care and education. Medical care costs rose by 0.3 percent in December. They have risen at a 5.1 percent annual rate over the last quarter and 5.2 percent for the last year. Education costs rose 0.5 percent in December, bringing the rate of increase over the last quarter to 7.7 percent, up from the 5.6 percent rate over the last year.

The fact that higher ed costs constantly rise faster than the rest of the consumer price index never gets a decent public explanation. It has hurt higher ed with the public even more than have the culture wars and TV coverage of the everyday beer binges and drug orgies on campuses everywhere. It also helps explain the fact that when states cut public higher ed, most people really don't care.

Business Week has published a piece with an excellent array of accessible statistics on the inequality boom in higher ed. It has a good first line too: "It's only fitting that Whitman College, Princeton's new student residence, is named for eBay (EBAY) CEO Meg Whitman, because it's a billionaire's mansion in the form of a dorm."

The "Ivy League plus" educates 1 percent of university students and now lives on a different financial planet from the rest of us. The implication is that higher ed no longer spreads prosperity, but simply reflects the widening class gaps in the United States, with Ivy-league college being just another luxury good solidifying and symbolizing elite status.

In the three decades after World War II, higher ed spread prosperity because it massively increased college enrollments at a fairly decent level of quality. Academic ambitions soared as enrollments did, and quality steadily improved for the broad middle classes. The BW piece points out that in contrast, the Ivies Plus have actually reduced their undergrad enrollments by about six percent over the last ten years.

At one point, the article asks, will the "benefits to society outweigh the damage to the public universities [the Ivies] are stripping of star professors, who tend to take their outside research money with them when they go?" The obvious answer is no: public benefits are mass benefits, not benefits to the top 1 percent.

The heads of some huge public research universities replied with a good description of their lives with continuous public funding cuts, and an eloquent appeal for proper public funding.

Let's hope this kind of letter starts to work better now than it has over the last twenty-five yers. If the public research universities don't get the public funding they need, most will become regional schools for students tracked into 2nd, 3rd, and 4th-rung salaries, while both economic and research productivity decline for the country as a whole.

The American Association of Medical Colleges has published a study on "Diversity of U.S. Medical Students by Family Income" which shows that the majority of med students come from the top fifth of the population by family income. In addition, this number is actually growing, in spite of much official concern. The report concludes this way:

A real concern is a possible increase in
the systemic skewing toward children
of upper-income families. From 2000,
when 50.8 percent of matriculants
came from the top quintile, to 2005,
when 55.2 percent came from that
quintile, there may be the beginning
of an undesirable trend. As reported
elsewhere,6 the debt incurred by
medical students continues to increase
with every passing year; 2007 graduates
reported a median educational
debt of $140,000. With debt
increasing much more rapidly than
physician incomes, a continued
increase in the fifth quintile
percentage would be a warning that
medical education is becoming
increasingly out of reach for applicants
of modest means.

This is not good. But medical schools are in fact doing better than very selective colleges, which is not good either.