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I just published this, arguing that the parents involved in the college bribery scandal are just millionaires from America’s merely rich. Wall Street billionaires have much deeper ties elite universities, making bribes unnecessary. insidehighered.com/views/2019/03/…
In his 1955 book, The Power Elite, sociologist C. Wright Mills documented that half of the 90 richest Americans at the time who had attended college had gone to the Ivy League, with a third having gone to Harvard University or Yale.
Over the last 30 years, however, something big has changed in the ties between prestigious universities and the nation’s rich and powerful: Wall Street financiers have attained even greater dominance as alumni, donors and governing board members.
While virtually absent from the #Forbes400 list of the wealthiest Americans in 1982, private equity and hedge fund managers had come to make up 20 percent of the noninheriting members of the list of the wealthiest Americans by 2017, rivaled only by the billionaires of high tech.
the nation’s wealthiest financiers are much more likely to have Ivy League ties than other economic elites. For 2017, 58 percent of private equity and hedge fund managers on the Forbes 400 had Ivy League degrees compared to just 30 percent of those from outside finance.
With deep pockets and the élan of wealth, the new financiers also have assumed pre-eminence on the boards of their private university alma maters.
private equity and hedge fund managers together went from just 3% of board seats at the top private universities in 1989 to 17% in 2014. That drove an increase in the share of board seats going to any kind of financiers, including traditional bankers, from 17 to 32%.
Private equity and hedge fund managers gained an even larger share of board officer positions, rising from just 4% to 32% of board chairs, vice chairs and secretaries. This drove an increase in the share of board offices held by any kind of financier from 32% to 67%.
Tellingly, no comparable transformation has occurred at public universities.
The children of trustees and billionaire donors are routinely given admissions preferences. So no illegal bribe is needed to gain an advantage.
I’m 1998, Stanford admitted the child of one its board members, private equity investor Rober Bass, despite grades and an SAT score (1220) that were lower than those of seven of her classmates who were denied admission and below the average for admitted students.
If we want roll back this persistent inequity, we first will need to break the co-dependency of the Ivy League and powerful economic elites such as those from finance.
U.S. senator Ron Wyden announced legislation last week that takes a promising first step in this direction. The bill would eliminate tax deductions for donations given “before or during the enrollment of children of the donor’s family.”
Hopefully, this will be an opening salvo for more creative policy initiatives to level the playing field at America’s most elite colleges and universities.
