As reported in The Herald a couple of weeks ago (“Occupy shifts focus to tax status,” Jan. 26), Occupy Providence has recently focused criticism on the University for its tax-exempt status amidst the public feud currently playing out between President Ruth Simmons and Mayor Angel Taveras over the same issue. Their criticism is a speciï¬c one: The University should pay more money to the city to make up for what it does not contribute in property taxes. It’s an interesting issue but suggestive of an even more interesting question. To use the language of the movement, is Brown a tool of the 1 percent?
As it stands, Brown’s financial aid department is less than perfect. Every year, middle- and lower-income students with fantastic applications are forced to forget Brown, while other students, arbitrarily lucky enough to do so, pay full tuition to attend the University.
We can’t hide the ties between Brown and the investment banking industry, as the Center for Careers and Life After Brown regularly hosts internship events that feature financial groups as giant as Barclays, Morgan Stanley and JP Morgan Chase. Brian Moynihan ’81, the Bank of America CEO who was the public face of his bank’s heavily protested plan to charge debit card holders $5 a month, is a Brown alum.
Moreover, these ï¬nancial institutions indiscriminately open their doors to graduates of Ivy League universities. Lauren Rivera, assistant professor of management and organizations at Northwestern University’s Kellogg School of Management, demonstrated this after taking several years to speak with employers at elite firms in law, consulting and investment banking. She found that the primary reason for hiring, above all else — including grades — was whether the applicant had attended an ultra-elite university. Attendance at Yale or Brown, for example, was enough to gain entry.
It might be possible to answer the central question of this article on the strength of these preceding statements alone, but it is better answered through a controversy that came to Brown in 2010. That year, Simmons was publicly found to have been on the board of Goldman Sachs for a number of years. Her penultimate yearly salary was $323,539, and she left the job with a total of $4.3 million in company stock.
Simmons, like a number of Brown students, is a member of the 1 percent. Simmons, like many Brown students, most likely maintained her position on Goldman’s board, at least partially, through the power of Brown’s name. And Simmons, like numerous Brown students, received a massive salary through her job. So is it fair to criticize her? Or, accordingly, is it fair to criticize the many Brown students who are in a similar situation?
Well, Simmons has worked hard at increasing the amount of financial aid that Brown gives each year, helping to guarantee that those without high incomes have the opportunity to go to Brown. And I would hazard a guess that most Brown students would agree that this is a good and moral thing to do.
Likewise, I doubt that Simmons, or any Brown student, truly believes that it is ethical for elite service ï¬rms to base their hiring decisions solely on what college the applicant graduated from. How many of us were but a few SAT points away from going to our second choice schools? We’re not so different from the students of other good universities, and I don’t think we should receive special treatment based on minuscule high school grade differences.
As for the millions in compensation that Simmons received for her services, that relates to a more general problem of the ï¬nancial industry. Wall Street produces, among other things, high salaries. I could write on the moral issue of paying anyone more than $250,000, but I am more concerned with the functional problems of this system. Such high wages can drain talent from other ï¬elds that contribute to the economy. Substantial numbers of smart, science- and math-oriented students have been channelled into the ï¬eld of ï¬nance to the detriment of various other industries in America. The result has been a weaker, less diversiï¬ed economy whose human capital is over-involved in the area of investment banking. But during Simmons’ tenure, Brown did create a new school of engineering, and the diversity of talents and passions at Brown lends itself to creating an economy that is as dynamic as it is strong.
I hope to have shown that, in each of these areas, Brown, its presidents and its students believe in and pursue initiatives that contribute to a more equitable economy. However, we still have immense involvement in investment banking, a powerful branch of the economy that, for better or for worse, will always exist. Because of this, I contend that Simmons and the many students who work in the financial industry should be judged by how they act, not by whether they are part of the industry in the ï¬rst place. I believe this because I don’t think we need zero investment bankers in America — I just think we need moral ones.
Kevin Carty ’15 is a political science concentrator from Washington D.C. He would love to hear any responses and can be reached at firstname.lastname@example.org.