The Socjournal» Timothy McGettigan

Name: Timothy, aka “mcgett”

Email:

Bio: Tim McGettigan is a professor of sociology at Colorado State University – Pueblo. The Socjournal is an outstanding resource for all things sociological. Too often, the media examines social issues from a singularly economic perspective. If you really want to understand how the social world works, it’s better to use a broader, clearer lens. In this column, I will discuss a variety of forces (technological, scientific, political, cultural, and, yeah okay, economic) that are currently reshaping the globe. Whether or not the world is changing for the better is an open question — and, thus, it’s a question that I look forward to debating at length in this column.

June 23rd, 2010


In the aftermath of the 2008 financial meltdown, Ben Bernanke, America’s leading scholar of the Great Depression, has been credited with saving the nation’s economy. As a reward for his sterling work, on August 25, 2009, President Obama appointed Ben Bernanke to a second term as the Chair of the Federal Reserve.

Three cheers for Ben!

Apparently, if Ben Bernanke hadn’t saved our bacon, quite a few Americans would currently be living in Hoovervilles or roaming the countryside in Joad-jalopies. Certainly, no one wants that to happen. So, how did Ben do it? How did Bernanke pull off his epic economic miracle, i.e., snatching the economic system from the jaws of disaster and, in the space of only a few short months, returning it to a state of sanity and prosperity?

While Ben’s Miracle may have spared the country years of misery — BTW, it took FDR three terms to accomplish what Bernanke has wrought in a mere nine months — it has also etched a highly innovative chapter in the history of capitalism. Indeed, for true believers in the history of capitalism, the chapter on Ben’s Miracle is likely to produce a shock of gray hairs. According to its authorized history, capitalism is an economic system that is based upon risk and reward. Risky investments offer the advantage of large returns, however, they also escalate the chances of financial ruin. Thus, capitalism is often touted as the most efficient of all economic systems because of the way that it rewards the wise and punishes fools. At least, that’s how it’s supposed to work.

For the purposes of accomplishing his Miracle, Ben Bernanke suspended some of the most fundamental rules of capitalism. In November 2008, when the full scope of the financial crisis came to light, instead of permitting corporate jackals to reap the financial ruin that they so richly deserved, Ben loosed a near Biblical deluge of financial absolution. All sins were forgiven, no lunkheaded investment was too egregious to merit a bailout. TARP was only the beginning. To enhance liquidity, the Fed bought up trillions in toxic assets.

At this point, one might ask, “So, where did Ben get the money to resuscitate all those Wall Street wastrels?” Well, apparently, in Ben Bernanke’s economic universe, money grows on trees. No wonder President Obama reappointed him. Who on earth would fire a financial wizard of that caliber? Anyone who can conjure trillions of dollars during the nation’s darkest hour has certainly earned his spot on the roster. Still, to be perfectly honest, that’s what ticks me off about Ben and his Miracle.

That is, during times of economic sanity, the high priests of capitalism often preach about money being a scarce and, therefore, precious resource. These homilies usually include admonitions about how those who wish to accumulate an abundance of elusive swag must tread the perilous tightrope of capitalist virtue: work hard, play by the rules, invest wisely — or else, plummet into the abyss.

Yeah, right.

Actions speak louder than words. Ben Bernanke may talk like a true-believer, but his economic Miracle willfully contradicts the most sacred tenets of capitalism. Rather than punishing irresponsible buffoons, Ben’s Miracle was predicated upon a strategy that rewarded financial malfeasance; even to the point of handing out bonuses to incompetent executives. Of course, Bernanke embraced this morally hazardous solution because deadbeats throughout the financial community had cunningly diffused the jeopardy of their incautious investments–via the magic of credit default swaps–throughout the entire financial system. Given the dire threat of systemic risk, Bernanke had little choice but to implement a policy of universal clemency.

Leaders often have to make tough decisions. Given the available options, either bailing out Wall Street’s reprobates or watching the entire economic system collapse, I believe Ben made the right choice. Indeed, so long as I am able to keep my job, my home, and continue feeding my family, I will continue to support Big Ben and his economic Miracle. In an imperfect world, Ben Bernanke has managed the 2008 meltdown and the current economic recovery as well as anyone could hope.

That said, I do find Ben’s solution to the 2008 financial crisis somewhat alarming. Consider, if you will, the economic precedent that Bernanke has set: moral hazard is as dead as a dodo. The sharks on Wall Street are not fools. Ben’s universal bailout illustrated that, as long as there is sufficient collusion among investors, they need no longer fear the downside of contemptible financial risks. Success is assured if only the geniuses on Wall Street can find some way to threaten the entire economic system. How’s that for irony? Ben Bernanke has proclaimed to the world’s financial pirates that, by risking everything, they will–at least on his watch–risk nothing. Maybe it’s just me, but that’s not what I consider an enduring or palatable solution to the current economic crisis.

Still, what’s done is done. Hopefully, Ben Bernanke has a whole orchard of money trees.

VN:R_U [1.9.3_1094]

Rating: 0.0/10 (0 votes cast)

VN:F [1.9.3_1094]

No Comments “

Colorado Stealth University

June 7th, 2010

Power, control, and secrecy in higher education

Over the past few years, the Colorado State University Board of Governors has become increasingly secretive. During the spring of 2009, the BOG’s stealth maneuvers became so extreme that several Colorado legislators introduced House Bill 1369, which was intended to require the CSU Board of Governors to conduct its business with greater transparency. In a separate action, on May 5, 2009, District Court Judge Stephen Schapanski ruled that the CSU Board of Governors violated state open meeting laws when the BOG interviewed Joe Blake behind closed doors for the position of System Chancellor. Thus, there is abundant evidence that the CSU Board of Governors has become more clandestine, however,what is less clear is why the BOG believes it requires so much secrecy.

Transparency is an essential part of managing public institutions. That is, exacting public scrutiny has a tendency to keep leaders honest. In the absence of such scrutiny, leaders tend to wander from that straight and narrow path. Richard Nixon represents perhaps the most troubling example of a public servant who was undone by an excessive penchant for secrecy. Thus, transparency is the key to good governance. Indeed, it is that truism which makes the CSU Board of Governors’ recent passion for secrecy so worrisome.

Again, one must ask, what’s with all the secrecy? As long as the CSU Board of Governors makes decisions that serve the better interests of their constituents, there should be no need for secrecy. Of course, therein lies the rub. Secrets become essential when leaders of public institutions place their own interests above those of their constituents. The decision to install Joe Blake as CSU System Chancellor is an ideal case in point. No doubt, the CSU Board of Governors had some inkling that conferring a plum sinecure on one of its own members would likely stir outcries of cronyism. Therefore, the BOG concealed key elements of the chancellor search process in order to minimize public oversight until its eyebrow-raising conclusion was a fait accompli.

Additionally, the CSU Board of Governors’ dogged secrecy has effectively suppressed the curious circumstances surrounding the departure of former Chancellor Larry Penley — who, hard-working Coloradans might like to know, negotiated a sweet severance package (including payouts of $389,000 per year until 2010) at Colorado tax-payer’s expense. Thus, the lesson to gain from this is, as long as public officials can maintain secrecy, they can violate the public’s trust with impunity.

Of course, there are additional advantages to keeping secrets. Stealth has often been employed by leaders who are angling for additional power. For example, under Colorado Law, creating new public institutions of higher education requires a decision on the part of the state legislature. The power of conferring legislative authority on public colleges and universities remains the sole preserve of the legislature largely because, in anointing new colleges and universities, the state must also assume responsibility for funding those institutions. Yet, in spite of this constraint, several years ago the CSU Board of Governors, without bothering to secure legislative authority, created the third campus in its System, CSU-Global.

If you visit the CSU System homepage (http://www.csusystem.edu/), you will see three boxes in the center of the page that link to the three campuses in the CSU System: including two that enjoy legislative authority, i.e., CSU-Fort Collins and CSU-Pueblo, and one that does not, CSU-Global. Further, on January 28, 2009, Diane Evans, Treasurer for the Board of Governors, affirmed in an open forum at CSU-Pueblo that, though CSU-Global happens to be a “virtual” university, nevertheless from the perspective of the CSU Board of Governors, CSU-Global occupies a stature that is equivalent to the other two CSU System campuses. Dick Robinson, who co-chaired the open forum and who happens to be a past Chair of the CSU Governing Board, concurred with Diane Evans. Robinson stated that, from the perspective of the CSU Board of Governors, there are three campuses in the CSU System and, though each has a different mission, the Board of Governors recognizes each as an independent campus in the CSU System.

Wow. So, who needs legislative authority when you can get whatever you want more efficiently without it?

Although, by this time, the fact of CSU-Global’s existence should be a surprise to no one, nevertheless, the manner in which CSU-Global came into existence should be alarming to everyone. By stealthily arrogating the right to create a third campus on its own volition, the CSU Board of Governors has set a major precedent: no longer do Colorado institutions of higher education need to gain approval from the state in order to create new, publicly-supported colleges or universities. That is quite a coup d’etat.

Okay, so, what’s the big deal? After all, one could argue that the CSU Board of Governors knows what’s best for Colorado State University and, thus, the BOG should have every right to make decisions independently of state and public interference. Compelling as such an argument may be, it does overlook one key point: Colorado State University is a taxpayer-funded institution. The people of Colorado own and operate Colorado State University. The CSU Board of Governors has not been appointed to serve as they see fit, but to serve the better interests of the people of Colorado. In its zeal to operate under a cloud of secrecy, the CSU Board of Governors seems to have overlooked that all-important truth. Fortunately, there is a simple solution to this problem. The people of Colorado can remind the CSU Board of Governors that they work for us. If Colorado’s taxpayers demand more transparency and compliance with state rules and regulations, then the BOG will have no choice but to comply. Isn’t it great to live in a democracy?

Transparency is the very least — and yet it is perhaps the most important quality — that taxpayers should expect from their public servants. It’s time to let the light shine in at Colorado State University.

VN:R_U [1.9.3_1094]

Rating: 0.0/10 (0 votes cast)

VN:F [1.9.3_1094]

No Comments “

The Business of Higher Education

June 7th, 2010

The Business of Higher Education

In recent years, colleges and universities have encountered increasing pressure to operate like businesses. As the logic goes, businesses must survive in a cutthroat climate of unfettered competition and thus these organizations need to be leaner, more efficient and more responsive to the needs of their customers than not-for-profit organizations, such as colleges and universities. In the unforgiving crucible of free market competition, only the fittest businesses (e.g., those that deliver the highest quality products at fair market value), will survive.  Of course, the seemingly endless government bail-outs following the 2008 financial crash cast a dubious light on the above claims, nevertheless, the notion that higher education should embrace a more business-like organizational philosophy remains deeply entrenched. Colorado State University’s recent hiring of its first-ever System Chancellor offers an illuminating example of this sensibility in practice.

On May 6, 2009, the CSU Board of Governors announced the hiring of Joe Blake as its System Chancellor. It is fair to say that Joe Blake is a somewhat curious choice for CSU’s System Chancellor because, although Blake can brag of extensive contacts in the Denver business community (Blake’s most recent job was as president of the Denver Metro Chamber of Commerce), his resume is conspicuously absent of academic credentials. Indeed, it is noteworthy that, in assembling its search committee, the CSU Board of Governors intentionally excluded faculty and student representatives. In response to protests concerning the limited composition of the chancellor search committee, Michelle McKinney, a public relations representative for the CSU System Board of Governors, stated baldly, “Search committee members were chosen for their knowledge and understanding of complex, billion dollar businesses.” In other words, from the perspective of the CSU Board of Governors, Colorado State University is a business. Therefore, when it comes to choosing the University’s leaders, the CSU Board of Governors considers input from successful businesspeople to be more pertinent than the opinions of academics.

Viewing these events through the most optimistic lens, one could argue that vast changes are in the offing for higher education. In an Information Society, college degrees have become an ever more essential ingredient for success. Yet, indispensable as college degrees may be, with each passing year, students encounter more difficulty gaining access to and completing higher education. Escalating costs coupled with reduced public funding have shifted the burden of college finance onto the backs of individual students. As students face the prospect of accumulating home mortgage-sized debt over the course of their college careers, many gifted, but financially-strapped students will have no choice but to forgo higher education.

Somehow, some way, educators must find a way to change that dynamic: college and university leaders must find a way to make higher education more affordable–and soon! Insights from the business realm will certainly be helpful in that process. Business leaders are only too well aware of the hazards of running afoul of consumer expectations. When a valued good becomes excessively overpriced, consumers tend to take their buying power elsewhere. As a case in point, consider the Big Three automakers. Not long ago the Big Three were the titans of industrial America, but having fallen out of step with their customers, the Big Three have hit upon tough times. Once again, in a free market society it behooves organizations to deliver the highest quality products at affordable prices. Consumer loyalty is not inexhaustible.

Indeed, higher education must change in order to meet the needs of its twenty-first century students. Fortunately, I am pleased to report that higher education has undertaken a variety of initiatives to achieve precisely that goal. To begin with, most colleges and universities have implemented flexible degree programs to permit students with limited time and extensive non-academic responsibilities (i.e., full-time jobs, family obligations, military service, etc.) to progress toward college degrees at a pace that suits their lifestyles. In addition, many universities have employed the latest technologies in an effort to reach out to place-bound students. Thus, many students who lack the necessary mobility and wherewithal to pursue a traditional on-campus education can still procure college degrees via online or “virtual” higher education opportunities.

Changing times have dictated that higher education must also change. Thus far, higher education has responded admirably. Yet, as with all successful institutions, to ensure ongoing success, higher education must constantly seek ways to reinvent and improve itself. Still, as planners look to the future, I believe it is important to consider the strengths and weaknesses of higher education in as broad a framework as possible. Much as higher education can benefit from the insights of business leaders, it is essential to recognize that higher education is not a business, nor should it ever become one. While higher education can and must synergize with business in many ways, business and higher education are distinct pursuits. Elementally, business is a for-profit activity, whereas higher education is a not-for-profit endeavor. This is the case, quite simply, because education is not a commodity; one cannot purchase an education the same way that one might purchase a pair of snow tires. Education is an investment that requires years of patience, diligence and perseverance before one can hope to reap a windfall.

Certainly, education is not cheap. It has taken an enormous investment to lay the educational foundation for the Information Society. However, I think it is fair to say that, having laid that groundwork, the dividends realized thus far have been spectacular: because of its investment in higher education, the US has been able to maintain a position of leadership in the development of the Information Society.

Undeniably, one way of mitigating higher education costs might be to seek new ways of transforming education into a for-profit endeavor–one would expect such initiatives to be a topic of primary interest to business leaders. However, I wonder if it is possible to extract profit from higher education without simultaneously impoverishing it? Further, viewing higher education as a resource from which to extract profit represents the antithesis of the educational philosophy that has propelled the North America and other nations to the forefront of the Information Society. We have has achieved prominence in the global village by investing in, rather than siphoning wealth from higher education. Therefore, I believe it is possible for the us to continue reaping great rewards from higher education, but only by enhancing its commitment to access-for-all, and by maintaining its philosophy of education as a long-term investment in the future. We will continue to play a central role in the Information Society, but only so long as we recognize that the “business” of higher education is to lay the foundation upon which to build a more enlightened, democratic, and prosperous world for one and all.

VN:R_U [1.9.3_1094]

Rating: 10.0/10 (1 vote cast)

VN:F [1.9.3_1094]

No Comments “