Now that our season is over...

[veeman5]

The following article really tempered my enthusiasm for Big Red basketball quite a bit this week: http://espn.go.com/blog/collegebasketballnation/post/_/id/8727/cornell-hoops-wall-streets-semipros

Several members of the media spent the week writing about the "purity" of our vision of student-athletes vs. the "semi-pro" nature of Kentucky (and by extension, most top NCAA programs). In my humble opinion, the fact that many of our most successful athletes end up within the investment banking / hedge fund pipeline serves to complicate such a comparison. While our beloved athletes certainly have a claim to the higher moral ground with respect to being true student-athletes, the fact that many of them end up being part of the "Wall St. establishment" post graduation seems to nullify it a bit.

In the interest of full disclosure, I am an alum that works on Wall St. I have to say that I personally found the whole TARP / "Wall St. bailout" experience to be an enlightening one that has shaken the core of my belief in the reality of our democratic society (e.g., both parties serve Wall St. before anything / anyone else, etc.). However, I thought I'd share my perspective to see if it resonates with anyone else.

[Swampy]

On a different thread, a discussion of graduation rates often assumes getting a job is the purpose of a college education. I would argue instead that elevating the individual, and thereby society, through education is the purpose. Just as college sports teams ought not be developmental programs for professional sports, neither should university academics be developmental programs for Wall St. or any other particular interests. But the reality is that many people, probably most, go to college to become more employable rather than more educated just for education's sake. Here the Ivies have a tremendous advantage because Ivy graduates have a good chance of securing employment just by virtue of their degree, while a graduate of North Northwestern State U has good reason to be less confident about their degree enhancing their employment and earnings potential. Hence the Ivy student can afford to spend time studying Plato and Chaucer, while the NNSU student is more likely to see mastering marketable skills as the purpose of any course.

Someone, I think Keith Olbermann, wrote a book that argues that sports in the U.S., particularly as presented on TV, are nationalistic and have a conservative bias. Certainly a sizable number of conservative politicians are former athletes. So it does not surprise me that college athletes do not question the societal implications of a speculative institution like Wall St. and see careers as investment bankers as financially attractive and perfectly legitimate.

One would like to think that a college devoted to a particular subject would be a place where one could learn the most important ways of understanding the subject from a wide variety of perspectives and approaches. Yet this is hardly the case with business schools. One can easily make the case that the work of people like Karl Marx or Vance Packard should be on anyone's top-twenty list of authors who give insight into the societal implications of business, but this is not what most business schools teach. Instead, they teach a mixture of skills framed in a set of doctrines that rationalize and legitimate the role of private business in our society. Except perhaps in an ethics course, one is unlikely to find business schools stressing courses dealing with such things as social inequality as the result of a business system or the increasing pace of global environmental destruction as an offshoot of the rise of business enterprise (since the Late Middle Ages).

So I do think the Ivies have the moral high ground compared to schools with athletic scholarships, it is also true that universities are reflections of their societies. and insofar as the society lacks moral integrity, we should expect to find a similar lack embedded within the structure of the university. If we could reform the university to have a less biased, potentially critical view of socioeconomic institutions, then the ethical implications would take care of themselves for both student athletes and students in general.

[mnagowski]

To be fair to the student-athletes, not all of them end up on Wall Street, and many non-student athletes (a lot of whom make a lot less significant contributions to the Cornell community) end up on Wall Street as well. A fair number of them will go on to be doctors, lawyers, researchers, farmers, or entrepreneurs. I know Adam Gore went back to help manage his family farm after graduating last year, Graham Dow went on to medical school, and Lenny Collins at Harvard Law. http://cornellbasketball.blogspot.com/2007/08/ugo-ihekweazu-off-to-medical-school.html

I think Wall Street will always attract bright athletes because of the sense of competition it offers. The career service center certainly tries to point a lot of students in that direction, and the money certainly helps too.

So I would argue that the larger problem is not with the student athletes, but in the way Wall Street has captured the American economy and rewarded itself with oversized compensation packages. I still don't know why we allow private equity and hedge fund managers to be taxed at a lower rate than everybody else. You can't place all of the blame on a 22-year old kid for wanting to follow the money, athlete or non-athlete.

Volker argues that the only beneficial innovation the financial services industry has come up with in the past 30 years has been the ATM. All the rest has essentially been a zero-sum game of pushing paper around and cutting a hefty fee. And based on economic growth rates, there certainly doesn't seem to be any more efficient allocation of capital happening today than there was in the 1950s or 1960s when Wall Street was much more heavily regulated. So maybe higher taxation and better regulation can return us to an era that produced such statesmen as Ken Dryden and Bill Bradley. But then again, Obama's Secretary of Education played basketball at Harvard during the 1980s before turning pro. So maybe Louis Dale will go on to become the head of the EPA. I don't know.

I think one of the things that makes Donahue such a classy coach is that he really tries to instill in his players the sense that they aren't just good, hard-working ball-players; they're good, hard-working, and lucky. You can see this through the team's interactions with his autistic son, etc. And I think acknowledging the fact that, gee Ryan Wittman was born with some pretty good genes and Jeff Foote just happens to be seven-feet tall, helps to develop a sense of appreciation for the certain amount of randomness that exists in life and sport. We might not be here if Princeton had happened to score one more three-pointer in the game at Jadwin.

Full disclosure: I work for a regional bank with a CEO who has been quite outspoken against Wall Street's practices.

[billhoward]

Bill Gates when he was younger blew off questions about his philanthropy by saying he would get to that in a much bigger way later. But the man kept his promise. Nothing wrong with working hard, making money, and then easing out early to do good works. And his foundations ask tough questions about what's the best use of their money, about what gives the most bang for the buck.

As for Wall Street and athletes, perhaps it's the competitve drive of athletics that you channel into risk-taking and more competitiveness in an adult career. Being on Wall Street helps you keep score more readily than in other jobs.

There have been excesses on Wall Street. An op ed piece last fall by Calvin Trillin argued that the collapse happened because smart people (smart about math) started working on Wall Street. The old line Ivy Leaguer Wall Streeter was a jovial idiot and investors and Washington could figure out what his company was up to. Then the Ivy Leaguer bosses hired the really smart guys who figured out how to play with money in ways the feds and the idiot Ivy Leaguers couldn't understand but the Ivy guys were happy because that put more money in their pockets. I think it's meant as a tongue in cheek column. I think he's right, too. http://www.nytimes.com/2009/10/14/opinion/14trillin.html

[Jim Hyla]

Bill Gates when he was younger blew off questions about his philanthropy by saying he would get to that in a much bigger way later. But the man kept his promise. Nothing wrong with working hard, making money, and then easing out early to do good works.

You can certainly argue about whether it was worth all the money it cost, but at least Gates produced something of value, and something that has helped productivity and our leisure time. The problem with Wall Street is they are not producing much of value other than tax money for NY.

[BCrespi]

Bill Gates when he was younger blew off questions about his philanthropy by saying he would get to that in a much bigger way later. But the man kept his promise. Nothing wrong with working hard, making money, and then easing out early to do good works.

You can certainly argue about whether it was worth all the money it cost, but at least Gates produced something of value, and something that has helped productivity and our leisure time. The problem with Wall Street is they are not producing much of value other than tax money for NY.

I'm not trying to defend Wall St, but the whole concept of investment banking is that it puts capital in the hands of people so that they can build something and be successful.  While this obviously doesn't happen all the time, I don't think it's fair to say that an institution that provides capital for start-ups is valueless.  Most businesses can't start from nothing or from personal capital alone.  There is a place for it, if done well, no?

[mnagowski]

Bill Gates when he was younger blew off questions about his philanthropy by saying he would get to that in a much bigger way later. But the man kept his promise. Nothing wrong with working hard, making money, and then easing out early to do good works.

You can certainly argue about whether it was worth all the money it cost, but at least Gates produced something of value, and something that has helped productivity and our leisure time. The problem with Wall Street is they are not producing much of value other than tax money for NY.

I'm not trying to defend Wall St, but the whole concept of investment banking is that it puts capital in the hands of people so that they can build something and be successful.  While this obviously doesn't happen all the time, I don't think it's fair to say that an institution that provides capital for start-ups is valueless.  Most businesses can't start from nothing or from personal capital alone.  There is a place for it, if done well, no?

There's definitely a place for it, and I don't think any of us are really criticizing that aspect of Wall Street. We're criticizing the proprietary trading aspect of Wall Street, which makes highly leveraged bets on equities, bonds, and derivatives using borrowed money, often from the taxpayers.

The question to ask yourself is whether or not capital was allocated any better after the 1980s and 1990s deregulation than in the 50s 60s and 70s when Wall Street was more regulated. All evidence suggests not -- we ended up putting a lot of money into vaporbusiness.com and shitty housing stock in the desert. Don't forget that there's other methods of deploying capital that don't go through Wall Street, including angel and venture capital funds, commercial banking, R&D and seed spending from large corporations, and government-directed research and investment.

Getting back to the question of athlete's education, however, I'm not certain if capital theory is something they would want taught in their classes. It is certainly not something that mot non-athletes wan taught either. Not many people in my ILR classes were very much interested when we spent two weeks discussing Marx. Much more fun to do a stock market simulation or something. Better just to let the technocrats regulate and the athletes to have their regulated fun. (And be careful not to let the anti-regulation crowd touch any of the buttons.)

[CUontheslopes]

Yes, let's completely blame these kids with student loans to pay off because they didn't get athletic scholarships for becoming doctors, lawyers and bankers to pay off their loans. Maybe if the students got a balanced perspective from the faculty more students might be less dismissive of public service. Ithaca and Cornell seem to be tolerant of everything under the sun except genuine academic diversity, after all, every professor in the government dept. is a registered member of one party and several of the last convocation speakers have been: Nancy Pelosi, Bill Clinton and Obama's campaign manager. I'm all for these kids getting the best, highest paying jobs they can, but by the same token if they want to do public service, that's great too. There's no "immorality" associated with making an honest living.

[mnagowski]

There's no "immorality" associated with making an honest living.

You believe that Wall Street has been 'honest' over the last decade?

[CUontheslopes]

There's no "immorality" associated with making an honest living.

You believe that Wall Street has been 'honest' over the last decade?

If individuals haven't operated within the confines of the law, convict them and send them to jail, but most 22 year olds right out of college? Yes, I think they're making an honest living as are the majority of people working on Wall Street. It's not a monolithic entity - Wall Street is made up of people, the overwhelming majority of whom are hardworking and honest. Of course there are a few bad eggs, but the government and public service workers? They're 100% honest because we never have Washington scandals and public interest groups like ACORN never do any wrong.

[Jim Hyla]

There's no "immorality" associated with making an honest living.

You believe that Wall Street has been 'honest' over the last decade?

If individuals haven't operated within the confines of the law, convict them and send them to jail, but most 22 year olds right out of college? Yes, I think they're making an honest living as are the majority of people working on Wall Street. It's not a monolithic entity - Wall Street is made up of people, the overwhelming majority of whom are hardworking and honest. Of course there are a few bad eggs, but the government and public service workers? They're 100% honest because we never have Washington scandals and public interest groups like ACORN never do any wrong.

I tell you what, I'll take the public service workers over the others any day.

[KeithK]

Business school curricula legitimize the role of private business in our society? truly shocking! who would have thought?

Inequality in income and wealth is a good thing. Gradients drive change, encourage innovation.

One would think the history of the twentieth century would serve to refute and discredit anything that Karl Marx had to say.

[Al DeFlorio]

Business school curricula legitimize the role of private business in our society? truly shocking! who would have thought?

Inequality in income and wealth is a good thing. Gradients drive change, encourage innovation.

One would think the history of the twentieth century would serve to refute and discredit anything that Karl Marx had to say.

You know, Keith, people who throw words like "Marx" and "socialism" around loosely really add nothing substantive to the discussion.  You can't be as shallow as propaganda artists like Palin and Beck and O'Reilly, can you?  Give us all a break and drop the right-wing blather.  It adds nothing to eLynah.

[Rosey]

You know, Keith, people who throw words like "Marx" and "socialism" around loosely really add nothing substantive to the discussion.  You can't be as shallow as propaganda artists like Palin and Beck and O'Reilly, can you?  Give us all a break and drop the right-wing blather.  It adds nothing to eLynah.

Yes, Keith, please: you don't want to interrupt the left-wing circle jerk. ;-)

FWIW, I agree with Keith and I hardly consider myself "right-wing", being not really so interested in war, corporate welfare, deficits, bashing teh gheys, banning vices, or establishing religion.  But like most left-wingers I know, you lump everyone who doesn't agree with all your talking points into the right-wing bucket and dismiss them.  Real open-minded, Al.

[mnagowski]

Inequality in income and wealth is a good thing. Gradients drive change, encourage innovation.

I suppose that's why the period associated with the highest rate of equality in the post-war era, the 1960s, are associated with the highest rates of economic growth?

http://www.j-bradford-delong.net/movable_type/images2/20050607_Growth_and_Distribution2.gif

I have nothing economically wrong with a moderate level of inequality, provided there's a high level of social mobility and a strong safety net. Culturally and socially, however, high levels of inequality can lead to political instability and unnecessary strife.

One would think the history of the twentieth century would serve to refute and discredit anything that Karl Marx had to say.

I take it you have never actually read Marx? Because while Marx the political figure may have been wrong, Marx the philosopher and Marx the historian still have plenty of valid ideas to add to contemporary discussion.

And I agree with Swampy, it would be useful if business students were required to read Marx. Or at least a distillation of Marx. It obviously hasn't hurt China's economic growth rates.