(Anyone else getting these feeble letters from the alma mater? Really,
can we not pass up such an opportunity to gloat? The college I went to
was ranked, at the time, #1 for undergrad economics in the US by the
silly magazine US News and World Report. I had great teachers like
Bernie Saffran and FM Scherer, my thesis advisor. But it took *political
economy* to give me any sense of why the Crash of 2008 was inexorable,
and quite a lot of deprogramming of neoclassical dogma went into that.)
-------- Original Message --------
Subject: Re: Swarthmore's Current Financial Circumstances
Date: Thu, 11 Dec 2008 07:00:27 +0200
From: Patrick Bond <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED]
Dear president Bloom,
I studied economics at Swarthmore during the early 1980s, during a prior
severe economic crisis. At the time there was one Marxist lecturer,
David Weiman, who was limited to teaching the History of Economic
Thought. I had to commute to Penn to study Post-Keynesian macroeconomics
under Sidney Weintraub and heterodox finance under Edward Herman (and
later went to Johns Hopkins for my doctorate in economic geography,
where I focused on the theory of capitalist financial crisis, supervised
by David Harvey).
Because I was deprived of a rounded economics education at Swarthmore,
and because since then, market-oriented scholars in the discipline very
effectively policed against Marxist, Post-Keynesian and heterodox
analysis, I suppose I am not surprised that your finance managers did
not protect the endowment by diversifying into social investments. What
salary, may I ask, are you paying these managers as a reward for blowing
30% of the endowment, thanks to their touching faith in capitalist
markets? May I suggest you buy them copies of Das Kapital as an
investment in their education?
I would definitely consider donating to Swarthmore, if I felt it would
contribute to ideological diversity on the faculty, so that the
economics and other social science disciplines open up much more to
critical thinking about capitalism, so that, in turn, the next
generation of financial managers are not so stupid and destructive.
Yours,
Patrick Bond
(Senior Professor, School of Development Studies, University of
KwaZulu-Natal)
Alfred H. Bloom, Swarthmore College wrote:
Dear Swarthmoreans,
As you are all aware our nation and world are facing the most dramatic
decline in financial assets in recent times. Unfortunately the College
has not been immune from the effects of this decline.
Swarthmore has benefited from a continuing tradition of generous
philanthropy and has over the years enjoyed exceptional investment
success. The College has held prudently to a conservative spending
rate on its endowment during years of excellent return so that it
would be well positioned in years of disappointing performance. It has
also maintained a 15% allocation of the endowment to U.S. Treasury
securities to support the budget and to avoid having to sell equities
during periods of market weakness. This history and these measures
have placed the College in a relatively strong position today.
Nevertheless, the almost 30% decline in the endowment from its June 30
value of $1.4 billion has been much steeper than anyone anticipated.
If the endowment remains at its current level or declines further and
we continue to spend at our current level, we would soon start to
erode the financial foundation of the College's future. Moreover,
until a turnaround takes place we can expect a reduction in
philanthropic support and an increase in the cost of meeting the
demonstrated financial need of our students. These conditions,
coupled with the distinct possibility of a protracted recession ahead
and uncertainty over when an eventual financial turnaround may take
place, make it essential to plan for, and move prudently toward, a
significantly more constrained budgetary environment.
This past weekend the Board of Managers discussed the situation fully.
We have together decided on a sequence of measured courses of action.
*
Effective immediately, the College will pull back from all
non-essential construction work, refrain from initiating any new
programs, and stringently evaluate any faculty or staff hiring.
*
In developing the annual budget for 2009-10 to be submitted to
the Board of Managers in February, we will shape recommendations
on enrollment, tuition and fees, and compensation in ways
sensitive to the financial environment and set guidelines on
spending across departments that ensure tighter management of
our resources.
*
Over the coming semester we will develop a contingency plan for
more significant reductions in the budget, which the College
will begin to implement if by this time next year the College's
financial situation has not improved.
The College will adhere fully to its current financial aid policies
for all students presently enrolled as well as for those admitted for
the Class of 2013.
It is very sobering to consider that this community, which makes such
careful, constructive, and creative use of its resources, will have to
adapt to a more constrained financial environment. But in these very
exceptional times, we must take care to conserve for the future the
resources that past generations of Swarthmoreans have so carefully
conserved for us. And, as president, I must ask you to give as
generously as you can to the Annual Fund this year to help meet the
cost of our recent commitment to loan-free financial aid awards and to
cover the increase we expect in financial need.
I am confident that by acting together, and by maintaining educational
quality and regard for the people who make up this remarkable
community as our priorities, we will weather this environment with the
distinctive excellence of this college undiminished.
Sincerely,
Alfred H. Bloom
President
ID: 0007523 , Patrick M. Bond '83
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