{"id":732,"date":"2009-04-13T19:53:13","date_gmt":"2009-04-13T23:53:13","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/fensterm\/2009\/04\/13\/is-harvard-too-big-to-fail\/"},"modified":"2009-04-15T13:01:32","modified_gmt":"2009-04-15T17:01:32","slug":"is-harvard-too-big-to-fail","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/fensterm\/2009\/04\/13\/is-harvard-too-big-to-fail\/","title":{"rendered":"Is Harvard Too Big to Fail?"},"content":{"rendered":"

Formerly mighty financial services institutions get bailouts because, we are told, they are too big to fail. Does formerly mighty Harvard, down to single digit $Billions, need a bailout too? They haven’t asked for one. Their solution? Layoff workers. In response, Cambridge City Councilors Decker and Reeves have offered an “Economic Stimulus Package for Harvard and MIT.” As a “non-profit” institution Harvard is exempt from, among other things, property taxes in the City of Cambridge [and with the Allston Campus, Boston as well.] But Harvard is required to meet with the City Manager and negotiate a Payment in Lieu of Taxes (PILOT). The Council Order would forego about $398, 372 of the Harvard PILOT to cover the salary of 19 cleaners and about $ 70,688 of the MIT PILOT to cover the salary of 2 cleaners.<\/a> For those watching at home, that’s $20,967\/Harvard cleaner and $35,344\/MIT cleaner. I gotta ask if Harvard has had some Living Wage slippage here. The Katz Commission that resulted from the Mass Hall Sit-In of 2001, insisted that their had to be ‘market discipline’. They were afraid that Harvard might pay the janitors too well and bring on a colossal market failure. These figures show you that Harvard is not a “price taker” in the labor market. [Doesn’t anyone at Harvard know any economics?] Harvard is a market maker and it has always and still does set it’s wages for low wage workers lower than ‘comparable’ institutions. What we got here is a local market failure engineered by the same guys that brought you THE BIG ONE<\/strong>.<\/p>\n

The Medium Sized Picture<\/h3>\n

The Order was in legislative limbo going into this meeting. I asked them to leave it there for bit. Here’s why. While there has been some activism on this:<\/p>\n

\"No<\/p>\n

This week will probably have better weather.<\/p>\n

Second of all, there are lots of other things to look at about the University’s finances before we ask the Cambridge homeowners to forego such little as the PILOT provides.1<\/sup> Among them:<\/p>\n

Get back the $3+ Million we paid the Late Larry for mismanaging the University.<\/a><\/p>\n

Get back the $2+ Million we paid the Late Larry since he mismanaged the University.<\/a><\/p>\n

Get back the $26.5 Million fine the Late Larry paid for, out of the University coffer, for his regrettably still alive crony Andrei Shleifer. Together with legal fees the total is probably more like $30 Million. In case you missed it, the early history of the tawdry affair is chronicled in:<\/p>\n

Janine R. Wedel, The Harvard Boys Do Russia<\/a>, The Nation June 1, 1998<\/p>\n

Subsequent revelations are revealed in an article written by Harvard Alumnus David McClintock which appeared in Institutional Investor 1\/13\/06. Titled, How Harvard Lost Russia<\/strong>, it was passed around the faculty shortly before Summers’ resignation<\/a>. If you have trouble finding it, bring your Driver’s License to Harvard’s Lamont Library and ask to sign in for Government Documents. Reference staff will help you find it as a network resource. Harvard has a site license. As of this writing there is an open source mirror online<\/a>.<\/p>\n

Dean of the Faculty of Arts and Sciences Michael Smith is due to hold a town meeting with his folks 2<\/sup> today. Hope sombody asks him about this stuff.<\/p>\n

The Big Picture<\/h2>\n

We need to look at the political economy of Harvard in the era of the Summers-Rubin led irrational exuberance or, if you prefer, derivative security feeding frenzy. I need to get ready for the Dean’s town meeting now[See above]. If you aren’t going why not check out Noam’s interview with Amy on Democracy Now!<\/a> If you are going to the town meeting and haven’t seen the McClintock article, you could take a look.<\/p>\n

1<\/sup>Harvard PILOT 2008 $2,173,492<\/a>. I don’t know what the total assessed value of all Harvard property is, but I’m pretty sure that if we looked at what Harvard would pay if treated like a normal private business, the PILOT amounts to a small fraction of a penny on the dollar. If you have good numbers on this, by all means e-mail me at: the (dot) guy (dot) by (dot) the (dot) door (at) gmail (dot) comA,B<\/sup><\/p>\n

2<\/sup>This expository vagueness is the result of desperation. I couldn’t call us ‘constituents’ cause we didn’t vote for him. Nor did we vote for anybody up to and including The Fellows<\/strong>. I can’t call us ‘subjects’ without knowing the man. Is there anything majestic about him?<\/p>\n

A<\/sup>You can comment if you are in the Berkosphere. I apologize for not having my comments open, but with the proliferation of comment-spambots. I can’t keep up with the moderation effort necessary.<\/p>\n

B<\/sup>If anybody tried to e-mail me with yesterday’s e-address please try again with today’s. Spam was in part to blame.<\/p>\n","protected":false},"excerpt":{"rendered":"

Formerly mighty financial services institutions get bailouts because, we are told, they are too big to fail. Does formerly mighty Harvard, down to single digit $Billions, need a bailout too? They haven’t asked for one. Their solution? Layoff workers. In response, Cambridge City Councilors Decker and Reeves have offered an “Economic Stimulus Package for Harvard […]<\/p>\n","protected":false},"author":168,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1058],"tags":[],"class_list":["post-732","post","type-post","status-publish","format-standard","hentry","category-the-dismal-excuse-for-a-science"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/archive.blogs.harvard.edu\/fensterm\/wp-json\/wp\/v2\/posts\/732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.blogs.harvard.edu\/fensterm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.blogs.harvard.edu\/fensterm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/fensterm\/wp-json\/wp\/v2\/users\/168"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/fensterm\/wp-json\/wp\/v2\/comments?post=732"}],"version-history":[{"count":0,"href":"https:\/\/archive.blogs.harvard.edu\/fensterm\/wp-json\/wp\/v2\/posts\/732\/revisions"}],"wp:attachment":[{"href":"https:\/\/archive.blogs.harvard.edu\/fensterm\/wp-json\/wp\/v2\/media?parent=732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/fensterm\/wp-json\/wp\/v2\/categories?post=732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/fensterm\/wp-json\/wp\/v2\/tags?post=732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}