Academia

Harvard and Austrian Business Cycle Theory

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Harvard University might not teach much in the way of Austrian Business Cycle Theory, but they seem to be living out a version of it, as detailed in this interesting Vanity Fair feature.

It's all about how the loose money of perceived boom days that would last forever led them to launch many long-term capital-intensive projects that they now find themselves unable to bring to completion, leading to lots of wasted resources and unfinished megastructures. The story is also well worth a look for general fans of Ivy League schadenfreude.

NEXT: (Some of) Congress Promises to Read Bills Before Voting

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  1. Proving yet again that Yale is better than Harvard!

  2. A slightly funnier article from the same source.

    We are going to use the same people to find the problem that might have been the problem. While they are at it maybe they can teach their students math like they do at Wharton. Since bidness has math and stuff in it.

  3. Schadenfreude.

    Senk you.

  4. My alma mater finished fiscal year 2008 with an endowment of $6.63 billion… so my sympathy for Harvard of the (once) $30 billion-plus is very limited. (Also, the UofC has been funding capital improvements principally from donations, while the endowment provides less than 9% of the operating budget. There’s something to be said for prudence.)

  5. That was an interesting read. I didn’t realize just how much of an asshole Robert Rubin was. He did all he could to undermine Jack Meyer, and then got all bent out of shape when he took his show on the road?

    Did Rubin ever run a private business with bottom-line responsibility to shareholders, or was he an ivory-tower Keynesian who went from academia to government and back?

    -jcr

  6. Incidentally, my own experience with Harvard MBAs is that they’re trained to be middle managers at IBM in the 1960s. It’s the only degree that I would actually hold against an applicant.

    -jcr

  7. So, Harvard was making a lot of money under the direction of Meyer, weathering the 2001-2002 bear market with little difficulty.

    Then self-righteous anti-capitalists drove him and his employees out, as well as the only competent successor they could find.

    However, the anti-capitalists continued to act on the assumption that the endowment would just keep bringing in the cash, even though the brains were gone. When the next downturn hit, Harvard got totally hammered.

    Oh, well. Who is Jack Meyer?

  8. Dang it, Warmongering Lunatic beat me to the punch line!

  9. Summers and Rubin are useless.

    Meyer is no savior or god, but at least he walked the walk and backed up his talk.

    Don’t you feel safe with all the academics we have running the show now? Then again I have a hard time figuring out who is worse, the cap and gown wearing shit heads or the shit heads in dark suits who make sure all of their Goldman buddies stay in the black. Can’t fucking win.

  10. Oh, well. Who is Jack Meyer?

    I’ll take Ayn Rand allusions for $100, Alex.

    -jcr

  11. the cap and gown wearing shit heads or the shit heads in dark suits who make sure all of their Goldman buddies stay in the black.

    A nice summary of the current Administration.

  12. Meanwhile, Cooper Union, my grandfathers alma mater, is doing fine.

  13. I have to say this is good

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