Prof Blasts Walk-Out on College Libs List-Serv
Professor Robert Eckhardt blasted Monday’s planned tuition walk-out in an email sent over the Penn State College Libertarians listserv.
The email was sent in response to a plug for the event sent out to the listserv on the request of the Leftist Symposium. Eckhardt, the faculty advisor for College Libertarians, makes his case against the logic behind the rally and argues that instead the group should push for the Senior Class Gift Committee to begin investing in gold. I kid you not.
It’s worth a read. Check it out below.
Email sent from faculty advisor Robert Eckhardt to Penn State College Libertarians
Thanks for including me on this message, I guess. Sort of. Maybe. Well, perhaps not.
Is it really a positive, thoughtful response for Libertarians to join with the Leftist Symposium (whatever the hell that is)?
After all, the core concept of this protest is rather dumb-ass, don’t you think?
What possibly can be the positive influence of students leaving class to protest at Old Main? The Penn State administration ALREADY has protested the appropriations cut, and quite evidently will continue to do so. There is some precedent for such actions:
“Henry of Huntingdon, the 12th-century chronicler, tells how Cnut set his throne by the sea shore and commanded the tide to halt and not wet his feet and robes. Yet “continuing to rise as usual [the tide] dashed over his feet and legs without respect to his royal person. Then the king leapt backwards, saying: “Let all men know how empty and worthless is the power of kings, for there is none worthy of the name…. Cnut set up a Royal palace during his reign on Thorney Island (later to become known as Westminster). It is believed that, on this site, Cnut tried to command the tide of the river to prove to his courtiers that they were fools to think that he could command the waves.” Edited from Wikipedia.
I am not surprised that the Leftist Symposium (again, whatever the hell that is) has no clue as to the roots of the current problem, nor would much have a clue about its extent (the abysmal financial state of the entire nation), or how to go about really devising a long term solution. But Libertarians?
Here’s a suggestion: Why doesn’t some officer of the Penn State Libertarians contact Congressman Ron Paul and ask him for an endorsement of tomorrow’s protest described above. If you do this by phone, I suggest that the club’s representative hold the phone a pretty good distance from her/his ear, because I suspect that Dr. Paul’s derisive cackle could produce at least temporary damage to hearing. And right now no one needs additional medical expenses.
Rather than join in some generic demonstration that could be perceived as both superfluous and self-serving, why not start generating ideas and activities that would have a genuine chance of solving some of Penn State’s financial problems and be worthy of Libertarian philosophy?
Here’s just one idea that would have a real Libertarian cast to it:
How about campaigning for all or part of next year’s Senior Class Gift to be used to purchase gold that would then be part of the University’s permanent endowment?
Last year the amount of the class gift was roughly $166,000, allocated for a boardwalk at the entrance to the Arboretum.
This year’s is $221,000 to be spent on the Michael Murphy memorial.
Lest anyone get me wrong, I think that both of these are superb ideas, true to the spirit of Penn State and worthy of being carried through.
But suppose that next year’s class gift of roughly $200,000 were used to purchase gold bullion?
At current prices of roughly $1430 per ounce, this would represent roughly 140 ounces of gold.
I do not know what the price per ounce of gold will be ten years from now. That will depend on many things, chiefly the extent to which fiat currency continues to be proliferated.
But I do know what the price of gold was ten years ago: roughly $300 per ounce.
So, if part of Penn State’s endowment — or class gift– had been used ten years ago to purchase 140 ounces of gold, the cost would have been roughly $42,000.
Today that would have that market value of $200,000.
Anyone who has been paying attention to precious metals (most Libertarians, I hope) will know that gold has appreciated at roughly 15% per year over the last decade.
You may or may not know this, but the average annual rate of return on Penn State’s endowment over the same period has been 3.8%. Therefore, the same $42,000 under Penn State’s current endowment would be roughly $61,000 — that is, less than one-third of what the return have been if invested in gold.
I would guess that most Libertarians would more or less know this. But they may not know that some university endowments already have begun investing in gold. In July of 2010, the University of Texas endowment purchased $500 million in gold (3% of its total endowment). I do not know the exact price that they paid, but at that time gold was selling at roughly $1200 per ounce, so their theoretical gain so far is roughly $230 per ounce or about 19%. I do not know what the Penn State endowment has earned over the last year, but I doubt it is 19%.
Here’s a related thought. If you look at the old traditions of Penn State, students used to contribute labor to various projects (as some still do off campus with Habitat for Humanity, etc. — worthy endeavors).
Suppose that instead of doing something hackneyed such as standing outside Old Main and joining the Leftist Symposium in yammering at Penn State’s administration to do whatever they already are doing, Penn State Libertarians explored the possibility of some Penn State students joining with some Penn State building trades people on weekends to volunteer their time to build the Arboretum walkway or the Michael Murphy memorial? Those projects could still get done, and whatever money is saved could be used to establish a pool of gold as a new division of Penn State’s endowment. That strikes me as a win/win/win possibility in tangible outcomes. And, by the way, the external PR value could be incalculable.
Even if the initiative failed, if Libertarians proposed such an exercise in some form (Senior Class gift fully or partially invested in gold, with some saving made possible by students supplying volunteer labor for a socially valuable common cause), the attention that it would direct toward the effects of fiat currencies destroying value while gold preserves it would be valuable in itself.
I wish that all of you would think about something else: inviting John Williams of Shadowstats.com to come and speak on campus. John already has agreed to do this without any speaking fee, as long as it could be fit into his travel schedule.
I will not say reflexively that there is no money to be saved in Penn State’s budget. However, I think that it can be demonstrated that the rate of rise in Penn State’s costs overall, and also rises in tuition, only seem large if one does not take into account the real rate of inflation that has gone on for years. If one uses Shadowstats figures the picture is a very different one. I am astounded that Penn State’s administrators have not grasped and made this point publicly.
One last thought for you to turn over: Penn State employees have for decades received average wage “increases” that have lagged the real rates of inflation. Two years ago there was a salary freeze. Last year the average rate of salary increase was 2%. President Spanier just has announced another salary freeze for the coming 2011-2012 year as part of the way of keeping down what seems inevitably to be another rise in tuition and fees. This action is counter-productive in many ways, including being destructive of morale, but faculty members such as I can handle the economic consequences (in my case partly because nearly a decade ago I followed for my own family the advice about gold purchases that I am advocating now for others). But students really should consider what a complete wage freeze will do to the staff and maintenance workers. Many of these people work hard and with great dedication to earn salaries that are in the range of $25,000 to $30,000. Their costs for food, fuel, rent, and so on are going up at least as rapidly as tuition and fees. Please think of what a prolonged wage freeze means to these people.
Or, what the hell, you can go join with the Leftist Symposium. After all, who would expect University students to think critically and productively?
Your ever cheerful faculty advisor to the Penn State Libertarians,