I've never understood money. It doesn't do you any good until you spend it, and once you spend it, you don't have it anymore.
I never understood income, either. I was employed for most of my life at a frugal, let's call it, state university. I earned much less money than friends in the "private sector" or the trades, but it didn't seem to matter much. I never missed a meal, I sent my kids to good colleges, and I enjoyed the security of knowing that I wouldn't be laid off. Meanwhile, I spent a good hunk of my life reading books and talking about literature with young people. On the whole, it seemed like a good deal.
I did have some resentments, however, one of which was the disparity in salary between faculty and adminstrators. If we were all working in the same place, why should the guy who ran the student union, or who managed "public relations," or who lobbied the legislature, or who was in charge of campus parking or admissions, or who coached the linebackers, or who was second assistant vice chancellor for this-or-that receive a salary twice or three times as large as mine? I never grasped the reason.
But then I discovered that the real money in the University system wasn't in these areas. It was in managing the University's portfolio. A few years ago, Harvard Magazine reported that the managers of its endowment were receiving annual salaries of $8,000,000 to $10,000,000 -- or about 100 times what I was pulling down.
But, it was reported, they earned these phenomenal salaries because they were such financial geniuses -- and their genius could be judged by the enormous growth of the endowment.
I have to say that I was sceptical. I remembered one of my father's maxims: "when the stock market is going up, everybody's a genius."
Then I received a letter from Harvard's President, reporting on the steep decline in the value of the endowment.
In a fit of pique, I wrote to President Faust (her real name).
Dear President Faust: when the stock market was flying, the managers of Harvard's endowment were geniuses and were paid astonishingly high salaries. Now that the endowment has lost 30% of its value, do you plan to a) lower the salaries of endowment managers to realistic levels, and b) ask them to recompense the university for their absurd past overcompensation ? Yours, Vivian de St. Vrain (Ph.D. 1966)
I didn't expect an answer, but after several months, I received the following letter, which, truth to tell, I regard as rather cold and perfunctory.
Dear Dr. St. Vrain.
Although I cannot comment on matters of employee compensation, I understand and appreciate your concern for Harvard’s wellbeing. Please be assured that the endowment management remains entirely focused on supporting the University’s most fundamental education and research priorities.
Regards,
Drew Faust
Whoa. Back o' the hand to poor Vivian.
OK, that's it. In retaliation, I'm striking Harvard out of my will. President Faust will have to find someone else to endow that new administration building.
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