Soaring college costs and the Penn State private plane
I was amazed to see this sentence in the piece the New York Times’s ever-amazing Jo Becker wrote last week about all the goodies outgoing Penn State football coach Joe Paterno negotiated in a new contract even as the Jerry Sandusky scandal was imploding around him: “He would also have the use of the university’s private plane…”
Penn State has a private plane? Sure, the school probably charters a jet when the team travels. But do the university executives have their own jet? How many other universities have perks like this?
As this article from Bloomberg.com documents, the relentless rise in higher education tuition and other costs has trapped students in debt from readily available student loans backed by us taxpayers. It is fast becoming a national scandal akin to the mortgage crisis. Which means we need some tough, fresh reporting finally holding university leaders accountable for spending and management efficiency.
According to news reports Penn State trustees raised tuition on the main campus last week by 2.9 percent. University officials bragged that this was the “lowest percentage tuition boost in 45 years and one of the smallest in the nation.” However, that raise followed a 4.9 percent increase the year before, and it exceeded the pace of inflation in any event. Sure, state aid to the school was cut, but a check of the university’s website reveals that the overall expense budget for the coming school year is still up $131 million, or 3.2 percent, over the year before, again outpacing inflation and despite those cuts in state aid. The overriding reality is that higher education remains a gold mine for reporters looking for waste and lack of accountability.
Air Paterno may be a good hook to get people interested. Which other schools have planes?
2. Scrutinizing the New York Fed:
The Federal Reserve Bank of New York has now taken center stage in the swirling scandal of who knew what about the manipulation of Libor rates. And I can report from experience that center stage is not where the New York Fed likes to be. In 2010, while writing in the New York Times Magazine about the work of Kenneth Feinberg – the Treasury Department-designated pay czar appointed to curb the compensation of executives at banks bailed out by TARP – I discovered that the New York Fed played a key, behind-the-scenes role in protecting AIG executives from having to accept AIG stock as part of their compensation. New York Fed officials told Feinberg that they agreed with these AIG executives that the stock of their own company was “worthless” and urged him to think of a different way to compensate them.
Because the stock was selling for approximately $40, this seemed a curious position for the New York Fed to take, and it raised questions about why AIG would not be required to disclose that its own executives, not to mention the Federal Reserve Bank of New York, were taking the position in negotiations with the Treasury Department that a $40 stock was worthless.
However, when I tried to get comment from the New York Fed, a spokesman told me that officials there “never” speak on the record. He was serious. And his claim seemed borne out when I looked through news clips about the organization and found that quotes of any substance were unattributed or on background.
With its cathedral-like building in the heart of the financial district and a board made up of elite Wall Street figures such as JPMorgan CEO Jamie Dimon, the New York Fed is the epitome of the financial establishment – yet it’s a government-funded agency, which should seemingly be open to public scrutiny. Its central role in TARP (Treasury Secretary Timothy Geithner was its president at the time) never produced the kind of full portrait of how it works and what its full influence is that it deserved. The new Libor scandal should get the financial press on the case.
The New York Fed may have played a major positive role, or it may have been an enabler or protector. The point is nobody outside the agency really knows, because the press hasn’t gotten inside to tell us how what may be the country’s most secretive non-national security agency actually works.
3. How did FDR do it?
As the 2012 election approaches, it’s clear that the central question (indeed, it’s already a cliché) is whether and how a president can be elected with unemployment exceeding 8 percent. So how come we haven’t seen a good story on how FDR won re-election in 1936, when the unemployment rate was over 16 percent? FDR not only won – he carried 46 of 48 states and got nearly 61 percent of the popular vote.
Sure, it’s repeatedly mentioned in passing that FDR pulled off a victory despite the state of the economy. But I’d like to know more about how he did it and how his campaign compares with the Obama effort. What were his campaign themes that year, and what were they in 1940 – when unemployment was still a miserable 14.6 percent and people had to be looking for an alternative after not four but eight years of a president trying to manage an economy far worse than the one we have today? And how, if at all, did he attack his opponents, Alf Landon in 1936, and Wendell Willkie (a Wall Streeter) in 1940?
4. Savannah profiles?
Where are the profiles of Savannah Guthrie, the new Today Show co-host? She’s a lawyer, whose bio says she scored first on the Arizona state bar exam. She has all kinds of other academic honors, and has had a lightning-fast rise since joining NBC News in 2008. Obviously lots of intriguing stuff here.
PHOTO: A pair of F-18 jets fly over Beaver stadium before the start of the Alabama versus Penn State NCAA football game in State College, Pennsylvania, September 10, 2011. REUTERS/Tim Shaffer