Sunday, January 30, 2011

Larry Summers and the Harvard C Students

They're probably his favorites:
The A, B and C alums at Harvard in fact could be broadly characterized thus, he said: The A students became academics, B students spent their time trying to get their children into the university as legacies, and the C students—the ones who had made the money—sat on the fund-raising committee.
I'm reminded of somebody else's observation:
“One of the speakers at my 25th reunion said that, according to a survey he had done of those attending, income was now precisely in inverse proportion to academic standing in the class, and that was partly because everyone in the lower third of the class had become a Wall Street millionaire.”

I reflected on my own college class, of roughly the same era. The top student had been appointed a federal appeals court judge — earning, by Wall Street standards, tip money. A lot of the people with similarly impressive academic records became professors. I could picture the future titans of Wall Street dozing in the back rows of some gut course like Geology 101, popularly known as Rocks for Jocks.
That article goes on to suggest that, as big bucks went to Wall Street jobs, so did the smart kids:
“When the smart guys started this business of securitizing things that didn’t even exist in the first place, who was running the firms they worked for? Our guys! The lower third of the class! Guys who didn’t have the foggiest notion of what a credit default swap was. All our guys knew was that they were getting disgustingly rich, and they had gotten to like that. All of that easy money had eaten away at their sense of enoughness.”
But apparently it was the C students who gave most generously to Harvard during Summers' Presidency, and who paid him (a grown-up smart kid) millions to... I guess help them understand derivatives? Something like that.

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