Adventures in the Corporate University
A couple of days ago some friends and I were talking about the new lobby in NYU’s business school. It’s been spruced up in all the appropriately corporate ways: angular glass and wood paneling, anonymous portraits of an inoffensively multicultural bunch looking into the distance in a profound and visionary way, and, of course, a state of the art security apparatus to keep out the rabble. On the side is this plack dedicating the lobby to one John A Paulson.
Fastforward to last week, when, while listening to Democracy Now I hear this segment, and learn just who John A Paulson is.
The basic version is this: John Paulson is a wall street whiz and Hedge Fund owner. He went to Stern way back when and was inspired by (not making this up) a class lecture given by Robert Rubin to go into Wall Street. A couple of years ago, he picked a bunch of subprime mortgages, convinced Goldman Sachs to bundle them together and sell them to investers, and then bet against them. He then made billions when they went belly-up… Because he picked them… To go belly-up… A fact the buyers did not know.
The SEC began investigations and fined Goldman $550 Million dollars for fraud (since they were selling packages they knew would fail). Paulson, on the other hand, gets away scotch free, and a Billion dollars richer. Remember, of course, next time you look over your taxes, that Paulson pays a %15 tax rate, since as a Hedge Fund manager his earnings are all considered capital gains. You waitresses and steel workers are suckers!
So, and this is all true, NYU’s fundraising apparatus got wind of this and, rather than be embarrassed that one of their alums was acting like this, decided to try to hit Paulson up for some cash. “I suspect what happened is that, as a researcher was going through the database for Stern, they realized that John Paulson was an [alumnus] of the school and he was capable of making a gift and they began to engage him,” said Debra LaMorte, senior vice president for development and alumni affairs.
The result: a cool $20 million dollar donation for NYU. Chump change, of course, for Paulson (really a sound investment, when considered as advertising and branding), but enough to allow NYU to renovate a bunch of classrooms and endow two chairs. Chairs in what, you ask? Well, what else would a robber-baron like Paulson endow but a chair in “Finance and Alternative Investments” and one in Economics. And, in a sort of cosmically ordained decision, what did he name the chair of Economics: The Alan Greenspan Chair of Economics.
Perhaps the two newly endowed professors can co-teach a class together. The “Alan Greenspan Chair” can explain why the deregulation of financial markets, liberalization of all restrictions on capital flows, and the brutal privatization of all community goods are great for an economy, and the professor of “alternative investments” can explain how to take advantage of that economy in order to make billions at the expense of investors (and the stupid homeowners, but who gives a rat’s ass about them?)
But Paulson’s saga gets more interesting. You see, in the weird incestous world of Wall Street, apparently you don’t just do some major act of
accumulation by dispossession “alternative investment” all by yourself. Paulson got his own investors in this scheme, including Citibank’s “Alternative Investments Chief Operating Officer,” one Jacob Lew, who invested heavily in Paulson’s scheme.
Who is Jacob Lew? Well you all know him as Obama’s new director of the Office of Management and Budget. He’ll be in charge of “selling tough policy measures to members of Congress” according to the Washington Post. Later they spell out that that’ll likely mean “social security reform.”
But Jacob Lew can privitize Social Security and slash benefits for the poor and elderly all he wants, to us at NYU he’ll always be known for something even more special: the asshole who busted our TA union. See back in 2005 and 2006, before he got on the Citibank money wagon, he was our Executive Vice President, when they decided to refuse to negotiate with our union, provoke a strike, intimidate the international students, and then fire a bunch of workers. You can read, for instance, this lovely memo in which he informs the community that “the University should not negotiate a new contract with the UAW.” The rest of you are going to love him.
And this, in a nutshell, is the modern university system. We get our money from douche-baggy bankers, have our policy administered by douche-baggy bankers, and, unfortunately, mostly seem to be in the business of producing douche-baggy bankers.
I’ll give the last word to William Rainey Harper, the first president of the University of Chicago: “It is all very well to sympathize with the working man, but we get our money from those on the other side, and we can’t afford to offend them.” (Novick p. 64)