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robertogreco : hedgefunds   12

How Harvard and Other Colleges Manage Their Endowments - YouTube
"College is expensive, but there is one place in higher education where there's no shortage of money – endowments. There's more than $616 billion worth of endowments assets in the U.S. Lawmakers are starting to questions why tuition is still rising if some schools have billions of dollars."
colleges  universities  ivyleague  endowments  2019  money  charitableindustrialcomplex  philanthropicindustrialcomplex  philanthropy  inequality  finance  highereducation  highered  power  wealth  universityoftexas  hedgefunds  yale  charity  hoarding  taxes  investment  stanford  divestment  economics  policy  politics  princeton 
6 weeks ago by robertogreco
American Capitalism’s Great Crisis | TIME
"America’s economic problems go far beyond rich bankers, too-big-to-fail financial institutions, hedge-fund billionaires, offshore tax avoidance or any particular outrage of the moment. In fact, each of these is symptomatic of a more nefarious condition that threatens, in equal measure, the very well-off and the very poor, the red and the blue. The U.S. system of market capitalism itself is broken.

[…]

America’s economic illness has a name: financialization. It’s an academic term for the trend by which Wall Street and its methods have come to reign supreme in America, permeating not just the financial industry but also much of American business. It includes everything from the growth in size and scope of finance and financial activity in the economy; to the rise of debt-fueled speculation over productive lending; to the ascendancy of shareholder value as the sole model for corporate governance; to the proliferation of risky, selfish thinking in both the private and public sectors; to the increasing political power of financiers and the CEOs they enrich; to the way in which a “markets know best” ideology remains the status quo. Financialization is a big, unfriendly word with broad, disconcerting implications.

[…]

The changes were driven by the fact that in the 1970s, the growth that America had enjoyed following World War II began to slow. Rather than make tough decisions about how to bolster it (which would inevitably mean choosing among various interest groups), politicians decided to pass that responsibility to the financial markets. Little by little, the Depression-era regulation that had served America so well was rolled back, and finance grew to become the dominant force that it is today. The shifts were bipartisan, and to be fair they often seemed like good ideas at the time; but they also came with unintended consequences.

[…]

This sickness, not so much the product of venal interests as of a complex and long-term web of changes in government and private industry, now manifests itself in myriad ways: a housing market that is bifurcated and dependent on government life support, a retirement system that has left millions insecure in their old age, a tax code that favors debt over equity. Debt is the lifeblood of finance; with the rise of the securities-and-trading portion of the industry came a rise in debt of all kinds, public and private. That’s bad news, since a wide range of academic research shows that rising debt and credit levels stoke financial instability. And yet, as finance has captured a greater and greater piece of the national pie, it has, perversely, all but ensured that debt is indispensable to maintaining any growth at all in an advanced economy like the U.S., where 70% of output is consumer spending. Debt-fueled finance has become a saccharine substitute for the real thing, an addiction that just gets worse. (The amount of credit offered to American consumers has doubled in real dollars since the 1980s, as have the fees they pay to their banks.)

[…]

Remooring finance in the real economy isn’t as simple as splitting up the biggest banks (although that would be a good start). It’s about dismantling the hold of financial-oriented thinking in every corner of corporate America. It’s about reforming business education, which is still permeated with academics who resist challenges to the gospel of efficient markets in the same way that medieval clergy dismissed scientific evidence that might challenge the existence of God. It’s about changing a tax system that treats one-year investment gains the same as longer-term ones, and induces financial institutions to push overconsumption and speculation rather than healthy lending to small businesses and job creators. It’s about rethinking retirement, crafting smarter housing policy and restraining a money culture filled with lobbyists who violate America’s essential economic principles.

It’s also about starting a bigger conversation about all this, with a broader group of stakeholders. The structure of American capital markets and whether or not they are serving business is a topic that has traditionally been the sole domain of “experts”—the financiers and policymakers who often have a self-interested perspective to push, and who do so in complicated language that keeps outsiders out of the debate. When it comes to finance, as with so many issues in a democratic society, complexity breeds exclusion. "

[via: http://finalbossform.com/post/146159698129/americas-economic-problems-go-far-beyond-rich ]
ranafarhoo  culture  economics  us  capitalism  banking  taxes  accounting  policy  politics  finance  banks  hedgefunds  inequality  financialization  wallstreet  debt  speculation  interestgroups  corruption  government  instability  regulation  democracy  markets 
june 2016 by robertogreco
Universities Are Becoming Billion-Dollar Hedge Funds With Schools Attached | The Nation
" Students are beginning to urge divestment."



"All told, hedge funds have over $3 trillion worth of assets under management globally. In theory, they exist to provide a “hedge” to protect investor portfolios in tough times. Hedging, seen in this light, is simply one investment strategy among many. In practice, however, they are alternative investment vehicles that tend to be housed offshore to avoid oversight and taxes, which means they are largely unregulated, face minimal disclosure requirements, and can engage in all sorts of risky bets and market manipulations.

Not long ago universities were, in the words of one report, “careful stewards of endowment income” and avoided such shenanigans. In the early seventies Harvard and Yale spearheaded committees on investor responsibility and devised ethical investment policies for endowments that considered things like social impact. In the nineties things began to change. Many schools, private and public, have become high-risk gamblers, with finance overtaking fundraising as the main engine of endowment growth. A more aggressive approach to investing paid off—until the economy melted down and caused some endowments to lose up to 30 percent of their value.

But experts and activists have other concerns. Some commentators, for example, are troubled by public tax-exempt educational institutions doing business with companies notorious for dodging taxes in offshore havens. More generally, tax exemption is a giant government subsidy that disproportionately benefits elite schools (the ones that attract the biggest donations and earn the largest investment returns), thus further polarizing an educational system already separated into haves and have-nots.

And it gets worse. In a report called “Educational Endowments and the Financial Crisis,” Joshua Humphreys, president and senior fellow at Croatan Institute points to an even more disturbing consequence of risky investment practices. By embracing speculative trading tactics, exotic derivatives, hedge funds and private equity, “endowments played a role in magnifying certain systemic risks in the capital markets,” Humphreys writes. What’s more, their initial success encouraged other institutional investors (think pension funds, sovereign wealth funds, and foundations) to follow in their footsteps, amplifying the system’s overall volatility and instability. In other words, endowments were not just innocent victims of the 2008 financial crisis, but actually helped enable it.

“Hedge funds, as they were initially conceived, have a potential role to play in a long-term endowment seeking to ‘hedge’ certain risks,” Humphreys told me, making clear he’s hesitant to write them off entirely. “But their arbitrarily high fee structures, the excessive compensation of their managers, and their deliberate evasion of taxes and transparency make hedge funds easy targets for stakeholders rightly concerned about the simmering crisis of higher education today.”"



" The time has come for students to connect the dots between ballooning student debt, the poor treatment of campus workers, and the obscene wealth of hedge fund oligarchs. Once they do, they can fight back by following in the footsteps of recent mobilizations against the financial sector. In 2013, a group called Kick Wall Street Off Campus forced Minnesota’s Macalester College to move some, though not all, of its money out of Wells Fargo to protest the bank’s role in community foreclosures. In June of last year, Santa Cruz County pulled together to get its money out of five giant banks—including Citicorp and JPMorgan Chase and Barclays—that pleaded guilty in the spring to felony charges that they rigged the world’s foreign-currency market. Similar campaigns could easily be waged against university endowment partnerships with hedge funds.

Of course, kicking hedge funds of campus won’t solve the college crisis or instantly reform the financial sector. Nevertheless, targeting hedge funds remains a promising tactic for uniting students and workers against hedge funds’ efforts to increase inequality, and using our tuition dollars and public subsidies to do so. This tactic would be especially effective at public institutions where divestment campaigns should be coupled with calls for increased state funding for higher education and better pay for low-wage workers.

“It’s easy to feel powerless, but hedge funds need university endowments, just like they also need public pensions. If that money was taken away, it would really affect them,” Strain says, and he’s right. Campus divestment movements have a proven track record, going back to campaigns against Apartheid in the 1980s. Over the last few years, climate activists have pressured school trustees to divert trillions of dollars from fossil fuels, and last year Columbia became the first university to divest from private prisons. Hedge funds deserve to be next on the chopping block."
astrataylor  education  neoliberalism  2016  universities  colleges  endowments  divestment  finance  politics  money  hedgefunds  highered  highereducation  nonprofit  taxes  taxation  funding  inequality  ivyleague  harvard  princeton  stanford  yalconflisctsofinterest  nonprofits 
march 2016 by robertogreco
Why Harvard should be taxed ["Harvard is a 'hedge fund with a university attached to it'"] - Business Insider
"“The joke about Harvard is that it’s a hedge fund with a university attached to it,” Mark Schneider tells me. It’s a quip that, for obvious reasons, has become pretty popular in recent years.

In 2014, the university’s legendary endowment, overseen by a team of in-house experts and spread across a mind-bending array of investments that range from stocks and bonds to California wine vineyards, hit $36.4 billion.

“They’re just collecting tons, and tons, and tons of money,” says Schneider, a former Department of Education official who is currently a fellow at the American Institutes for Research.

Of course, normal hedge funds have to pay taxes on their earnings. Because it’s a nonprofit, Harvard doesn’t. And since bestowing tax exemptions is the same as spending cash from the government’s perspective (budgeteers call them “tax expenditures” for a reason), that means the American public effectively subsidizes Harvard’s moneymaking engine.

The same goes for Stanford (endowment: $21.4 billion), Princeton (endowment: $21 billion), Yale (endowment$23.9 billion), and the country’s other elite institutions of higher education.

Aiding wealthy research universities that cater to largely affluent undergraduates might have been acceptable in a more flush era. But at a time when state colleges are still suffering from deep budget cuts that have driven up tuition and politicians are stretching for ways to make school more affordable for middle-class students, clawing back some of that cash to spend on needier schools is starting to sound awfully appealing. Which is why it might just be time to start taxing Harvard and its cohort.

This isn’t a new idea by any stretch—in 2008, lawmakers in Massachusetts considered slapping a 2.5 percent tax on large university endowments—but Schneider has made an especially intriguing case for it."



"Another quandary: Today, the government generally doesn’t tax savings. It taxes income. So why take a cut of wealth from colleges when we don’t do it to individuals? As Kim Rueben, a senior fellow at the Tax Policy Center, put it to me, “We’re going to tax Harvard, but we’re not going to tax Warren Buffet?”

And, of course, there might be unintended consequences. Even with write-offs for financial aid, taxing endowments could encourage schools to spend less on things society generally likes, such as new research labs. The government could tax schools and require them to spend a minimum amount, which is how it treats private foundations. But then you have to consider to what creative lengths Harvard might go to avoid the IRS.

Cutting down the tax advantages of rich schools, obviously, would not be simple. But it still worth seriously considering the idea. Maybe we should consider taxing the Met as well. Maybe the government could stick to what it knows and tax Harvard’s capital gains instead of its whole endowment. Maybe we could learn to live with a little tax avoidance. However we choose to do it, I think we’d all like to spend a little less money sending other people’s kids to Harvard."
colleges  highered  highereducation  nonprofit  universities  money  finance  taxes  taxation  funding  inequality  ivyleague  harvard  endowments  princeton  stanford  yale  charitableindustrialcomplex  philanthropy  government  hedgefunds  jordanweissmann  philanthropicindustrialcomplex  nonprofits  capitalism  power  control 
february 2016 by robertogreco
Scotia, Calif.: The Last Company Town - Newsweek
"There was a time when employers provided everything: houses, hospitals, bars. Such a place still exists—but not for long. Welcome to Scotia, Calif., the last wholly owned company town in the country. Founded in 1863 by the Pacific Lumber Co., Scotia became “lumberjack heaven”—a complete community with a school, a church, a post office, family homes, and a power plant that provided electric light years before the White House had it. Now it is about to change forever. Marathon Asset Management, a Manhattan-based hedge fund that reluctantly inherited this industrial Eden in a 2008 bankruptcy case, is planning to put the entire town on the market this year—a move that will give residents the chance to own their own homes, elect their own officials, and generally control their own destiny. But longtime residents say that Scotia already amounts to the American Dream."
scotia  california  companytowns  hedgefunds  via:javierarbona  history  lumber  industry  2011 
february 2011 by robertogreco
YouTube - RSA Animate - Crises of Capitalism
"In this RSA Animate, radical sociologist David Harvey asks if it is time to look beyond capitalism towards a new social order that would allow us to live within a system that really could be responsible, just, and humane?"
davidharvey  capitalism  economics  politics  rsaanimate  homeownership  us  culture  germany  greece  policy  banks  finance  banking  canon  housing  worldbank  imf  neoliberalism  liberalism  alangreenspan  marxism  instability  systemicrisk  capitalaccumulation  crisis  labor  capital  1970s  1980s  unions  offshoring  power  wagerepression  wages  credit  creditcards  debt  personaldebt  2010  limits  greed  profits  industry  london  uk  latinamerica  wealth  india  china  inequality  incomeinequality  wealthinequality  hedgefunds 
june 2010 by robertogreco
U.S. financial crisis spreads toward your wallet | csmonitor.com
"In 2006, well before the financial crisis broke on the shores of the American economy, Ann Lee wrote a 22-page paper on "Wall Street's House of Cards." It warned of the danger to the nation from the sale of trillions of dollars of complex financial products called "structured credit derivatives" ... Seeking a reaction to her paper, she sent it to officials in Washington. Lee received an e-mail reply from Lawrence Lindsey, director of the National Economic Council under the first President Bush, who wrote that "both the practitioners and the regulators are well aware of the risks that are out there," including those in the subprime mortgage market. Mr. Lindsey held that the deregulated mortgage market was "much better" in early 2007 than the more regulated one in 1991, when there were also credit-market problems."
banking  finance  dept  economics  us  derivitives  wallstreet  mortgages  subprime  hedgefunds  regulation  deregulation  fauxpenmarkets  transparency 
september 2008 by robertogreco
McSweeney's Internet Tendency: Word Problems for Future Hedge-Fund Managers.
"In a given year, DJIA rises 8.3%, NASDAQ 7.6%, S&P 500 7.9%. If, in that same period, you manage a $29 billion hedge fund that loses 11.6 percent, how large a year-end bonus are you entitled to? (Round to the nearest $10 million.)"
finance  humor  subprime  hedgefunds  math 
may 2008 by robertogreco
:: Douglas Rushkoff - Weblog :: Why Not to Buy Gold
"If you want to invest your money in something real, improve the quality & maintenance of your property & equipment, support local businesses & agriculture, put some people through school, clean up some toxic waste, develop a natural fishery."
douglasrushkoff  money  value  investment  society  community  gold  commodities  hedgefunds 
march 2008 by robertogreco
Performance-pay Perplexes: Financial Page: The New Yorker
"collapse of the subprime-mortgage market boils down to simple truth: for years, lots of very smart people took lots of very foolish risks...more surprising: financial whizzes made bad decisions in part because that’s what they were paid to do."
decisions  economics  predictions  markets  management  money  hedgefunds  finance  investing  funds 
november 2007 by robertogreco

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