Facts and Fiction About Higher Education: An Encounter with Larry Summers

By Richard Vedder

A couple of days ago I found myself sitting next to former Harvard President (and Treasury Secretary) Larry Summers at a congressional hearing (the Joint Economic Committee of Congress; those interested in my testimony should be able to get it on the American Enterprise Institute website). I have always considered Summers to be arrogant, abrasive, self-centered, but also bright and sometimes even courageous. I told him, quite sincerely, that I was rooting for him as the Harvard faculty bashed him for such things as telling Cornell West to do some real academic work for a change, and for noting gender differences with respect to quantitative skills. He was ousted more for stating not only his opinion, but in some cases the simple facts, and for not bowing to the oppressive left-wing intellectual conformity of the Harvard faculty.

But much of my positive feelings for Summers dissipated during his testimony. Some of the things I strongly disagreed with him on dealt with issues like the causes of the Great Depression that go far beyond the interests of this web site. But he said a few things of interest to higher ed. As typical of university presidents, he complained about a lack of funding, especially for research and development. Fair enough, I guess. But he implied that Harvard could not keep good researchers for a lack of funds. A look at IPEDS data on Harvard faculty salaries show sharp increases in them over time, increases that have no doubt been furthered by the huge increases in Harvard's endowment in recent years. Senior faculty in the sciences at Harvard fairly commonly earn $200,000 or more annually with huge fringe benefits and job security. While some may be lured away by private industry (who cares whether their research is being done for companies or universities?), on the whole raising the specter of a loss of talent because of stagnating budgets may have been a bit much, at least as it pertains to Harvard.

But that was nothing compared with his statement about how he was disturbed that students from the bottom 50 percent of the income distribution constitute only 10 percent of students at top universities and how that somehow that is partly the fault of inadequate federal programs. That is complete bull (actually, "mostly bull" as the under representation of lower income students at those schools is very real). Most top schools have used their own institutional aid in recent years increasingly on a merit basis, tending to deemphasize need based aid. Federal financial assistance for higher ed has risen something on the order of 10 percent compounded annually for at least 12 years. To claim "we are neglecting the poor" is outrageous in light of the data on federal financial support and in light of the actions of schools like Harvard to turn their back on the needy (go to the Education Trust website for a marvelous study by Kati Haycock and a colleague on this point).