Home / General / Because It’s <i>Wreckable</i>, Alright?

Because It’s Wreckable, Alright?

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Felix Salmon has an essential story about Eric Schneiderman’s investigation into the bustout of Cooper Union. George Campbell took over a well-regarded liberal arts college, permanently associated with one of Lincoln’s greatest speeches as well as orations from other progressive leaders, fulfilling its mission of providing a free high-quality education to a small, dedicated group of students. The institution was financially stable when he took over.

Campbell, however, wanted a proactive, strategically dynamic Master Plan involving building new buildings nobody else particularly wanted. Campbell argued that this $120 million could be raised through fundraising. As we learned when CUNY sought to give David Petraeus a six-figure gift for doing something with some vague resemblance to teaching, though, beware of administrators who project their ego trips onto potential donors. Presicely because the demand for new buildings among the Cooper Union community was so weak, Campbell couldn’t raise anything remotely like the necessary money. But this is America — if you can’t raise the cash, borrow it. Campbell found one bank willing to lend him the money for his idiotic scheme, with remarkably onerous conditions:

And yet still Campbell didn’t give up. One lender – and only one lender – was willing to front Cooper Union the money that Campbell was requesting, but that loan came with four unacceptable conditions.

The lender was MetLife, and the first unacceptable condition was that its $175 million loan was to be secured by a mortgage on the Chrysler Building land. That land was granted to Cooper Union, in perpetuity, by Peter Cooper’s heirs – it was never designed to be collateral for short-term liquidity of dubious necessity.

The second unacceptable condition was that the liquidity was not going to be short-term at all: the loan would take the form of a 30-year mortgage, with a prepayment penalty so enormous (it was $81 million in 2012) that the loan could never be restructured or otherwise paid off early. Even if Campbell managed to magically find the rest of his $120 million, he couldn’t use it to pay down the loan, thanks to that prepayment penalty. The loan would last the full 30 years, even though Cooper Union had no real plan for where it would find 30 years’ worth of interest payments. By the time that the $175 million loan was paid off in full, Cooper would have paid back $10.3 million a year for 12 years, followed by $15.8 million a year for another 18 years, for a total of $387.4 million. That’s well over $200 million in total interest payments alone. Cooper Union had no realistic way of even paying back $175 million, let alone $387 million, so MetLife’s terms were clearly a non-starter.

The third unacceptable condition was that Cooper Union would be forced to give up an enormous amount of upside on its Chrysler Building land. In 1998, Cooper Union negotiated a rather clever 99-year lease for the land, under which it had a lot of leeway to raise rents substantially after 2018. Indeed, there was even a possibility that Cooper Union might be able to end up owning the Chrysler Building itself.

But MetLife was not interested in maximizing Cooper Union’s upside; rather, it was interested only in minimizing its own downside. So MetLife, in return for the $175 million loan, required Cooper Union to sign a series of leases on the Chrysler land, dating all the way out to 2048. Those leases were very favorable to the tenant, Tishman/Speyer, and they essentially prevented Cooper Union from ever being able to take advantage of rising midtown property values.

Finally, there was one last unacceptable thing that Cooper Union would need to do in order to get its $175 million: It would have to get the New York attorney general to agree to the deal with something known as a cy près petition. A cy près petition happens when a charity needs to restructure the terms of its trust, or endowment. In this particular case, in order to get the required cy près relief, Cooper Union would find itself being forced to lie to the attorney general about the necessity of taking out the loan in the first place. Since no university president or board of trustees ever wants to lie to an attorney general, the whole idea of borrowing the $175 million was obviously never going to happen.

Why would Campbell do such an extraordinarily stupid thing? Part of it is self-aggrandizement — new buildings are better for your “legacy” than something as mundane as maintaining a good institution and running it well. And there are more material benefits to be had as well:

Faced with a loan whose terms were unacceptable on multiple levels, the Cooper Union board did exactly what you would expect them to do. They agreed to everything, and paid Campbell a hefty bonus for his troubles.

Needless to say, the plan was a complete fiasco. The financial situation of the school deteriorated massively, and the hatchet man brought it by the board to replace Campbell fired fifty shots into Cooper Union’s mission by beginning to charge tuition.

There’s something uniquely indefensible about this particular act of looting. As Paul has observed, the orgy of debt-fueled (most of it of the taxpayer-funded student variety) building has been a disaster for American higher education. But some individual non-elite tuition-dependent schools might be able to say with a little plausibility that they’re trapped in a collective action problem: if they don’t offer the lazy rivers and opulent dorms today’s students demand, their enrollments will decrease. I suspect most of the time this isn’t true, but it’s at least an argument. Cooper Union — with a rich tradition, at the time free tuition, and an attractive Greenwich Village location — didn’t have any trouble attracting high quality students. Campbell wanted to borrow an unsustainable amount of money to build new toys for the same reason Gordon Gekko wanted to liquidate Blue Star airlines — there was more in it for him that way.

For a different version of the same story, head a few blocks southewest. On the decline of shared governance, see the situation in Iowa.

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  • Ken

    As usual, the scandal isn’t what’s illegal, it’s what’s legal.

    • ThrottleJockey

      Can someone explain the legal rationale for the NY AG inserting himself into Cooper’s governance. Agree that the President and the Board created a debacle of the worst degree, but I’m not sure why this should mean the NY AG has a role to play in fixing it. It seems like the Board that made the bed should be made to lie in it. Why should the AG be involved???

      And what did the Board “lie” to the AG about??? Saying that they wanted to restructure the trust so that they could ‘grow’ doesn’t seem like a lie–even if ‘growth’ is risky.

      • Oh shut up, you temporarily horrible old man

        Who is in charge of regulating charitable corporations in New York?

      • Scott Lemieux

        Can someone explain the legal rationale for the NY AG inserting himself into Cooper’s governance.

        Sure!

        It would have to get the New York attorney general to agree to the deal with something known as a cy près petition.

        Yes, it’s a real mystery that making fraudulent representations to the Attorney General would result in investigations by the Attorney General.

        • Lee Rudolph

          The mystery, such as it is, is that making fraudulent representations to the AG isn’t being prosecuted as criminal fraud.

  • Gregor Sansa

    If this was basically fraud by the trustees, can’t the university community sue somehow and leave them bankrupt? Something like odious debt, but with a university, not a country…

    • Ken

      Forget it, Jake, it’s Chinatown.

      • Davis X. Machina

        That’s a mile south. Follow the Bowery.

  • This just makes me unbearably sad.

    The obvious destructive bonkerriffic irresponsibility is staggering. They took something glovely and well run and just destroyed it for no reason at all all the while patting themselves on the back for being so awesome. Oh, and they walk away with a ton of cash and a resume line that is a plus rather than the equivalent or a third rate JD.

    • DocAmazing

      Not all that different from the pension-destroying junk-bond manipulations of the 1980s, but with nobler-sounding motives. The Gordon Gekko reference just needs an academic update.

      • Nobdy

        The big difference in my eyes is the ratio of collateral damage to ill-gotten gains. When the junk bonders and hedge funders steal $100,000,000 by god they steal $100,000,000. It goes into their pockets. This guy set fire to a whole institution worth hundreds of millions, and for what? A few million in bonus? He probably got less than 5% of the damage done in ill gotten gains. It’s like stealing a Bugati only to melt it down and sell it for scrap.

    • Derelict

      The entire episode is of a piece with the new American ideal of running a business or an institution: If you’re a competent steward of the operation, nobody wants you anywhere near it. If you’re wildly incompetent, well, the world’s your oyster!

      In this case, Campbell has destroyed the institution and been both lauded and highly compensated for it. He will no doubt move on to bigger and much more socially destructive things. Those who blazed the path he trod have enabled all manner of the astonishingly stupid and self-dealing to rise to levels hitherto unimaginable: Editors who hollow-out esteemed publications and get scooped up by ever-larger pubs to run those into the ground, business people who run their Fortune 500 companies into near bankruptcy and depart with a ginormous golden parachute (and then run for president), and even business people who manage to run several firms into bankruptcy despite having vast oceans of cash and land and contracts handed to them because their daddy is vice president and then president–only to go on to become president themselves and wreck the country.

      Welcome to the Age of Incompetence. Bow down before the drooling idiots who are now in charge.

      • Scott Lemieux

        The entire episode is of a piece with the new American ideal of running a business or an institution: If you’re a competent steward of the operation, nobody wants you anywhere near it. If you’re wildly incompetent, well, the world’s your oyster!

        Cf. “Carly Fiorina, Credible Candidate For Presidential Nomination (TM)”

        • Halloween Jack

          Donald Trump getting the notion in his absurdly-overcoiffed head to run was the best thing that could have happened to Fiorina; she came off well at the debate (even though she was stuck at the kids’low-pollers’ table) by being The Sane One.

  • Cooper has long been a way for working-class NYers to get a good engineering or architectural education without having to work three jobs or go into debt. Not no more, I guess.

    Fuck these guys.

    • mikeSchilling

      It’s where my father got his chemical engineering degree, towards the end of the Depression, when there’s no way he could have attended a school that charged tuition or did’t let him live at home in Brooklyn.

      Damn them. Damn them to hell.

      • mch

        It’s where my poor grandfather, who had stopped school at the end of 8th grade, completed his degree in electrical engineering shortly before WWI while working by day to support himself and his mother. (He had to commute from the Bronx to the lower East Side for his night courses.) He went on to design radios for airplanes during WWI, to be CEO of Con Ed, and to be Cooper Union’s first alumni trustee. I’ve only recently learned that he had a grandfather and great grandfather who were involved (in modest ways) in the founding of the Maryland Institute for the Promotion of the Mechanic Arts. What a wonderful product of the early industrial era such institutions were! (I think they got their start in France, actually.) Practical training and instruction, yes, but also public lectures by scholars, public figures, politicians (Abraham Lincoln at Cooper Union, Henry Clay at the Maryland Institute, for instance) — makes me thinks of the 92nd St. Y today. Liberal arts in that sense. Cooper Union, thanks to Peter Cooper, was especially progressive, insisting on education for women as well as men (e.g., stenography classes), at least on paper not allowing for racial discrimination, and, of course, making education available for free to those who could not afford to pay anything. Courses in things like electrical or mining engineering were very small, btw (as they were at, e.g., Columbia) — fewer than, say, ten students a year. But it was a new idea to educate people in “industrial arts” outside of apprenticeships….

  • AcademicLurker

    But at least they were disruptive…

  • DrDick
  • J. Otto Pohl

    I saw this documentary which deals with the debacle on my last Turkish Airlines flight from Istanbul to Bishkek.

    http://www.newsweek.com/shooting-ivory-tower-new-documentary-sets-its-sights-americas-higher-education-255761

    • Gregor Sansa

      Wow, Turkish Airlines really has some interesting selections for in-flight movies.

      Oh… wait… Jotto… self-centered personal details have nothing to do with the thread… OK.

      • Lurker

        This link was really a legitimate addition to discussiin, nonetheless.

        The most interesting point there is that active partying at college is expensive, and for a poor kid, ruinous. If they graduate without the connections, with a large load of debt, they are easily doomed to a life of poverty.

        Yet, it does not mention that such high life is a high-risk strategy: you can get connections necessary for social climbing by e.g. becoming the “house nerd” for a frat with well-connected membership. It mayt end with you in the gutter but the rewards, though unlikely, are considerable.

        • matt w

          I’m kind of concerned that they seem to concentrate a lot on Cooper Union as though it were an example of some sort of broader crisis in higher education, when it’s really an example of administrators looting a university that had been on a sustainable path with a solid endowment. Maybe that is a broader crisis in higher education, but not the kind that that article suggests.

          The author says “financial woes led the school to consider charging tuition for the first time in its 150-year history” as if that just happened, and as if it were part of what “could be the inevitable bursting of a bubble.” That’s what the administrators want you to think–that they’re making tough financial choices (to make other people suffer) in order to correct a financial crisis that’s long been brewing, when there’s only a crisis because of their rapacious behavior. They’re like Republicans stealing money from Social Security and then trumpeting that Social Security must be destroyed to save it.

          • I think of what happened at Cooper as the higher-ed analogue of what happened in Wisconsin: Walker’s budget cut taxes and amazingly a budget gap the same size appeared that could only possibly be filled by cutting services.

          • ajp

            Reminds me of that Milton quote “they who have put out the people’s eyes, reproach them of their blindness.”

          • ajp

            Reminds me of that Milton quote “they who have put out the people’s eyes, reproach them of their blindness.”

      • Warren Terra

        Hey – Otto made a perfectly good comment that, yes, mentioned his personal experience, but only on way to giving a relevant link – and as you admit, even the bit about his personal experience was quirky and interesting.

        We give Otto some stick for some of his comments, and I think some of those comments deserve or at least genuinely inspire such a response. But this isn’t such a case! Can we please not be a dick on general principles, and encourage the good comments?

        • postmodulator

          IAWTC, we should move forward based on the thesis that Jotto is trainable.

          • rhino

            J. Otto wouldn’t even make the bottom ten in my list of commenters if the *only* posts he made were his more annoying ones. His contribution here is much more valuable than mine will ever be, for starters.

            The glib little barbs tossed his way any time he comments, on the other hand, are seconds of my time I will never get back. Perhaps it would be best if everyone flamed his ideas rather than his existence.

        • Gregor Sansa

          I’ve stood up for him before on the same basis that you are doing so now. I didn’t see my comment as particularly harsh. Certainly his was a net positive for the thread, but the personal details were very Jotto, and I thought that was worth a chuckle. Nothing serious intended.

          • cpinva

            it was, however, a gratuitous shot. I find him annoying at times myself (hell, we’re all annoying at times, it’s part of the human condition), but on occasion he comes out with something of relevant interest, such as his post today. that he can’t help but throw something of him in it is just, well, JOP being JOP. it didn’t divert the thread, and the linked item was interesting.

            to the issue at hand:

            I’d say this was unbelievable, but that doesn’t really do it justice. George pillaged the school, with the help of a completely disinterred Board. they all had both a fiduciary & moral responsibility to the insititution, as well as its present/future student body. they all failed in that responsibility about as miserably as it’s possible to fail.

            the “rotting pile of dead horse corpses”, masquerading as the Board, should be sued for everything they’re worth. it appears, from the article, that both George and the Board went out of their ways to insure no independent counsel reviewed this loan agreement (fiduciary responsibility). had they done so, I’d like to think there’s no way this would ever have gone through.

            the AG’s office, while being lied to, failed in its duty as well. it doesn’t seem to have ever asked for the source documents, to support the claims of threat of loss of accreditation, etc. that alone would have exposed this deal for the fraud that it was, and kept the school out of the financial black hole it was happily tossed into.

            in essence, everyone that could have stopped this train wreck from happening failed to do their jobs, and the only loser out of this deal was the school and the students.

  • Peterr

    Perhaps Campbell will get a new job heading up ALEC or AEI or the American Conservative Union, and do an even better job with them using his free-market wisdom than he did for Cooper Union.

    • matt w

      This is an interesting question–do wingers run their organizations in the disastrous ways that they want everyone else to run theirs?

      • When organisations are propaganda pukefunnels, I imagine that everyone involved is grifting furiously, knowing that the billionaires behind them can always write another cheque.

        • cpinva

          I would guess that’s an expectation. after all, if you can’t grift your own weasel organization, how on earth can you be expected to teach others how to grift theirs, and the rubes in the general public?

          • You have passed the test, Little Grifthopper.

            • “Snatch these Bitcoins from my palm.”

              • tsam

                And now I shall grift the Earth.

        • Manny Kant

          Perlstein’s written a great deal about the extent to which a lot of right wing organizations are basically a grift.

  • ChrisTS

    There is nothing good, or even polite, to say about Campbell and the ‘trustees.’

  • LosGatosCA

    The values of America, and apparently the world as a whole, have simply cratered.

    I have to hand it Milken first, criminally, but even more so to Eisner, unethically, since they proved that bad behavior pays, and it pays very, very well. Once the smarter, ethically flexible folks realized that there weren’t any societal barriers to looting it was game on. It’s not what you build or contribute that counts, it’s simply what you can get away with.

    It’s a sorry reflection on the collective state of our citizens that most don’t even know they are simply considered prey by these folks. At least we put some of these predators in jail in the past (Milken, Skilling, etc) but now we are apparently more interested in letting them diversify and expand their targets.

    More lucrative to be their accomplices than stand up to their bad behavior.

    • jim, some guy in iowa

      wait til we elect one of those guys President. and if we don’t do it with Trump, there will be another one

      • DocAmazing

        What, you missed GW “Arlington Ballpark” Bush?

        • jim, some guy in iowa

          I was thinking of him as more frontman than management… but I guess realistically you’re right, the results were t he same whether he was the mastermind or just a tool

      • Davis X. Machina

        Run the government like a business, baby!

        (Did I mention the business was Lehman Bros.?)

        • Ken

          Anybody know of any statistics on the average lifespan of a US corporation?

          • I know that a lot of them seem to born suffering from senile dementia.

            Here is a questionable source saying big corps average 40 to 50 years.

          • Lee Rudolph

            Well, of course some of them change names (with or without first declaring themselves bankrupt).

            But I did get many a frisson of grim pleasure over the years that I walked most days past a large, large wall-plaque in the science building listing the names of all the corporate donors, nearly all of which no longer existed.

    • cpinva

      “Once the smarter, ethically flexible folks realized that there weren’t any societal barriers to looting it was game on.”

      it depends very much on the level, and who you graft. commit graft on a massive level, against the proletariat, and you’re good to go. commit it against the people you party with, and they’ll turn on you in a heartbeat.

    • tsam

      Our values haven’t done anything other correct from a small improvement after WWII and The New Deal. Governments being kleptocracies is pretty common throughout history.

  • wengler

    The Cooper Union debacle is the type of decision you get with unchecked power. The elite have not and will not be held to account in this country and we will just have guillotine fantasies until they are.

    • DrDick

      It is also what happens when you run a school like a business. The CEO gets a golden parachute, the board is unaffected, and everybody else gets the shaft.

      • cpinva

        yeah, they kind of fixed this with publicly held companies, making the board directly responsible for the legitimacy of the financial statements, but didn’t do the same for non-profits. since non-profits don’t directly financially affect nearly as many people, they (congress) didn’t feel it was necessary. it turns out, they were wrong.

        • Steve LaBonne

          I didn’t know that. Yes, that was a serious miscalculation.

  • joe from Lowell

    The trustees don’t even seem to have gotten rich off of any of this. Or am I missing something?

    • AcademicLurker

      Destroying a cherished American institution is its own reward.

    • Warren Terra

      I wouldn’t eliminate the possibility that by seeming so thoroughly biddable in their free service to this charity board they made themselves hotter prospects for appointment to other, more lucrative boards.

      Also: you’re assuming compensation in the form of money; they probably already had money, and were offered compensation of a more emotional/status nature.

      • Scott Lemieux

        Campbell is now on the board of Trustees of RPI, because of course.

        • Now that he’s destroyed the alma mater of a quarter of the engineers I know, he can destroy mine.* Great.

          *More so than Shirley Jackson’s actions** have, I mean.

          **EMPAC. EMPAC. EMPAC.

          • wjts

            “It isn’t fair, it isn’t right,” the alma mater screamed, and then George Campbell was upon her.

            • At least if we had made Lovecraft president we’d have got some good hallucinations out of it.

              • wjts

                e.g. At the Mountains of MBAness.

                • Lee Rudolph

                  Oh, well played!

        • cpinva

          did you notice that Campbell’s Wiki page is no longer accessible? I’d be curious to know who’s responsible for that?

  • Stag Party Palin

    I may have mentioned this before, but because of my experience on the board of a major conservation non-profit, I am not surprised. Even in a group of intelligent, educated people who do not accept payment for serving, you can get an incredible amount of group-think. Dissenters from the wisdom of management are treated as “shrill” and then ignored, and with very few exceptions (in my case, 2 out of 36), quickly come around to be with the group.

    Sheeple is a generous term for the human condition.

    • DocAmazing

      I work at a hospital that nearly closed. Many groups fought to keep it open. We group of physicians met with the hospital’s Board of Trustees to attempt to keep them from accepting a merger that (in the form it was then proposed) would have been ruinous, and would have led to our closure within months. We were too late; they had (with the assistance of the “charitable” organization that owned the hospital at that point) imbibed heavily of the corporate Kool-Aid, and were reduced to repeating “no margin, no mission!” over and over. I kept looking around for the pods.

    • cpinva

      “Dissenters from the wisdom of management are treated as “shrill” and then ignored, and with very few exceptions (in my case, 2 out of 36), quickly come around to be with the group.”

      or find themselves no longer members of the board.

    • FridayNext

      Oh, I agree 100%. My experience is in museums; as staff, management, and boards and off the top of my head, I could think of the names a dozen institutions you could substitute for Cooper-Union and come away with exactly the same story. Some closed for good, some shrank to become shadows of their former selves, some had start charging admission where they were once free, and some had to sell off artifacts or paintings. And they all suffer from some combination of bad governance, low ethics, a pathological desire to build “legacy,” sheer e.g. and power run amok, and an industry that emphasizes DO MORE BUILD MORE SERVE MORE DO IT NOW NOW NOW NOW NOW.

      • Steve LaBonne

        Time was when passing on a venerable institution unharmed, and with luck modestly improved, to the next generation was considered a fine legacy. Not sure how civilization can survive if that attitude completely dies out.

  • Unemployed_Northeastern

    I can’t find my cite offhand and Google is predictably just giving me student loan results, but IIRC, the amount of debt held by colleges and universities themselves via construction bonds and the like is up around $300 billion itself. It’s an underreported aspect of the general disaster that is the cost structure of higher education. Example: I was just reading in the Boston Globe how Emerson College, a performing arts-centric institution, would be shuttering the beautiful, late 19th century Colonial Theater for some time to make HVAC renovations and such. The Globe related that Emerson, whose annual cost of attendance is a good $15k to $20k less per year than a Harvard or Northeastern, has spent a shade over $500 million buying and developing property like the Colonial Theater in Boston’s Theater District over the last decade. They also dropped about $115 million building a campus in Los Angeles a few years ago. Know what their endowment is? $49 million. The one bond rating I could find for them shows about $250 million rated at Baa1. Yikes. This kind of thing is not quite endemic, but far more prevalent than people would think.

    • matt w

      I found this citation that, according to Moody’s, public colleges and universities had over $60 billion in debt in 2010-11.

      • postmodulator

        Public institutions must be able to borrow very cheaply. I’m sure the assumption is that the state would bail them out.

      • Unemployed_Northeastern

        UMASS holds about $3 billion of that amount.

      • joe from Lowell

        Is that a lot?

        How would we figure out if that’s too much? What would we measure that against?

  • postmodulator

    I’ve phrased it this way before: what’s the point of building the God damned institutions in the first place? Cooper Union had been around 150 years. These ass-clowns smashed it to rubble in half a decade and haven’t even had to take a savage, merciless beating for their troubles.

    In a larger sense, the very idea of the university predates the freaking Renaissance. One generation of MBAs, and the idea is distorted virtually beyond recognition.

    • DrDick

      The MBA is the most powerful instrument of mass destruction ever devised by man.

      • Gregor Sansa

        At first I read that as “NBA”.

      • joe from Lowell

        The MBA has been rendered obsolete by the EdD – a terminal degree in, as far as I can tell, how to apply MBA-like principles to the administration of universities.

        • Doesn’t Cosby have an EdD?

          • Lee Rudolph

            Yes indeedy.

            To be fair, if (as I don’t doubt) Joe is correct that the EdD is now an MBA-lite specially tailored to the destruction of universities, it certainly hasn’t always been that way—it used to be a PhD-lite specially tailored to credentialist requirements. (And, who knows, maybe some EdDs have been heavies; maybe, even, some of our valued commenters here are EdDs, and Joe and I have just committed a major faux pas. I never ran into such an EdD myself, but, hey.)

            • I never ran into such an EdD myself

              I used to know a guy named Edd.

            • joe from Lowell

              As I look into it more, it seems like there are some schools at which it is indistinguishable from a PhD in Education, and others where it has nothing whatsoever to do with what goes on in classrooms.

            • jim, some guy in iowa

              is that the degree Cosby got for writing about his own tv show? Doesn’t seem like it should be worth the paper they printed it on

      • jim, some guy in iowa

        it’s kind of a cult I think. People who say “(x) should be run like a business” seem to not understand how many businesses fail every day in this country, or why. They just believe a businessman has Special Talents

        • Lee Rudolph

          or why.

          Of course they understand why. OBAMA!!!

        • Steve LaBonne

          In fact I linked to this story on my Facebook page as an example of what ”run like a business” actually looks like these days.

      • Unemployed_Northeastern

        Per NCES data, American universities bestowed almost 190,000 MBAs in the 2012-13 academic year. Forget being the most ubiquitous of graduate degrees; that is more than any undergraduate field of study save for, natch, business administration. We give out more MBAs than bachelor’s degrees in the social sciences & history (combined), or in the nursing and related health majors. It’s absolutely bonkers.

    • cpinva

      when I find myself in a group that has, as at least one of its members, an MBA holder, my first recommendation is to bind, gag and toss them in a corner, where they can do no harm.

      I will be the first to admit that a group of CPA’s is, by nature, a pretty boring bunch. that said, they’d never allow nonsense like this to go unopposed, and would have demanded to see the source documents upon which Campbell was making these ludicrous claims. further, they would have insisted on having an attorney review the loan agreement, before any action was taken on it. it might not have stopped that train from leaving the station, but at least they’d have made an effort to keep it from being fully fueled first.

      • Lee Rudolph

        further, they would have insisted on having an attorney review the loan agreement, before any action was taken on it.

        It would never have occurred to me that even a gang of wreckers like Campbell and his pet board of trustees wouldn’t have had such an agreement reviewed by a (not necessarily competent or disinterested) attorney. Do you really think they didn’t???

  • jdasf111

    Public institutions must be able to borrow very cheaply. I’m sure the assumption is that the state would bail them out.

    Interest on their debt is typically tax free. So their rates are around a 35% discount from corporate bond rates.

  • Some not-really-hopeful-but-less-bleak follow-up here.

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