Judging by the looks in people's eyes, I was far from the only one impressed by both the level of public interest and the coordination evident at the Oct. 12 Occupy Teach-In. I was particularly happy to see the number of non-student residents among the hundreds who packed Salomon 101.
But my excitement quickly became reserve during the first part of the program. This segment — which was led by Mark Blyth, professor of political science, and Ross Levine, professor of economics — taught me the most about some of the biggest pitfalls of an institution like Brown trying to engage in the dialogue around the Occupy movement. The two men, who are both more progressive representatives of their fields, used little academic jargon. Nevertheless, I felt the space of the teach-in was being used to allow something that happens far too often in our society: the empowerment of a star set of technocrats to define the terms of a dialogue when ideally, all members of society should feel empowered to speak their truth.
How else could it be that the entire room listened with rapt attention as Levine advised more regulation, as if the problem of the moment was only to ensure that the financial industry does not run into such problems again? How else could it be that there was no discussion of the stripping of wealth from communities — including many in Providence — that occurred and continues to occur in the aftermath of the subprime lending crash? How else could it be that the lack of restorative justice — not just for defrauded investors, but for the low-income people and people of color who were aggressively steered into predatory loans that became toxic assets — went completely unmentioned?
It would be unfair for me to solely blame the professors for these silences, as the multiple-hour event offered many other opportunities to discuss, for example, how the economic downturn saw an average of 16 percent of the wealth of white families disappear, compared to 66 percent of the wealth of Latino families. Or how Wells Fargo Bank pushed black families into subprime loans even when they may have qualified for prime loans. Or how investment banks like Goldman Sachs created the tools that made it more profitable for the lenders to push subprime loans than safer, prime ones. Or even how many of these same institutions are now speculating in student debt, which bears many of the same attractive features that subprime mortgages once did, in addition to the fact that unlike mortgages, unsustainable student debts are almost impossible to discharge through bankruptcy.
I think we at Brown should talk more about some of these details, not because it is fun to wallow in the depression that they might induce, but because doing so could lead to a productive analysis of how we relate to it all.
To include Brown's place in this analysis, it makes sense to talk about our endowment. Our endowment is invested in a lot of different ways about which most of us know nothing. That this is a problem from human rights, social and environmental justice perspectives has been pointed out by many people, and I agree that something ought to be done about it.
For example, one thing is clear: Because Brown has to pay out a small amount of its endowment to help cover its operating budget and to be able to deal with emergencies, a portion of our financial resources has to exist in forms that are easy to access and spend as needed. As of June 30, this portion amounted to 1 percent of our endowment, which does not seem like much until you realize that it is 1 percent of about $2.5 billion, or $25 million. Because our investment managers cannot invest this money in hedge funds that trade mortgage-backed securities, it might as well be invested in our community.
Community Development Financial Institutions are a special class of financial institutions that are recognized by the government as having the primary mission of promoting community development. They include community development banks, certain venture funds and credit unions. Where many mainstream mortgage lenders and banks ensnared people in hidden fees and robo-signed away neighborhoods, these institutions have given people access to credit on reasonable terms and depository accounts that do not gouge for minimum balance fees and the like. Many have had success in the neighborhoods that were supposedly the greatest credit risks, and which have been abandoned by the banks.
If Brown deposited money in these institutions, it would increase the financial resources that these institutions can lend to small businesses and elsewhere in the community. It would not be charity, as these institutions generate competitive rates of return on investment. It would indicate an incremental change in Brown's relationship with the rest of Providence.
Ian Trupin '13 is studying COE/Organizational Studies and wants everyone to know that Nov. 5 is National Move Your Money Day. Go credit unions!
