More on Public Finance

In a new post, Javier responded regarding my previous comments on public finance and universities. His point is well taken. I had not thought of the impact of ratings agencies upon university practices. 

A while back, at the University of Limerick, many of us were faced with severe difficulties getting paid. Why? It eventually turned out to be McKinsey and Company giving very specific advice to the university finance department about who should and shouldn't be paid. Yes, McKinsey and Company. Some individuals in the program walked away and never came back as a result. I nearly did. 

It goes further. Back in Los Angeles, I worked for one program director who thought of McKinsey and Company as his models and heros. Yes, McKinsey and Company. And this well-educated individual set out to run an architecture school along the lines of a cursory reading of McKinsey strategy: eliminate the "deadwood," hire recent graduates instead of experienced individuals, introduce readings from business strategy into teaching, strike alliances with consultants and businesses, and so on. 

Both of these experiences demonstrate how deeply corporate thought has pervaded the university. This is something that concerns me and something that I, as a faculty member of two schools, feel needs to be discussed openly throughout universities.  

Back when the full impact of the housing crash was still hard for newspaper critics to understand, I wrote this piece pointing to Harvey Molotoch's City as Growth Machine (which you can find here). The value of Molotoch's essay is that rather than making the issue personal (something one newspaper critic thought Javier and I were out to do), it points out the structural role of newspapers—and by extension architecture critics—in this condition. 

Another source for readers interested in these topics is David Harvey's A Brief History of Neoliberalism and the summary he gives of the book in this talk. When Wall Street bankers bailed out New York City during the fiscal crisis of the 1970s, Harvey explains, city workers were forced to invest part of their pensions in municipal bonds. The result, naturally, is that city workers now are ever more beholden to the ratings agencies.

It's a brilliant, and vicious, system. It's also proven to be unsound. We are all paying the bills for the mistakes of the bankers today. Is it too much to ask that newspaper criticis rethink their roles and begin raising such questions in print? Yes, of course, they are concerned about what their editors and the publishers might think, but since most positions in print journalism are likely to vanish during the next round of cost cutting anyway, maybe it's in their own interests to speak out.