Randomly Noted

The U.S. stock market swoon last week – caused in part by Obama administration’s announced plans to limit the size of banks and restrict their proprietary trading – shows the dangers of populism and the mixed economic nature of most Americans.

Even banker-hating working people, the presumed natural constituency for populist rhetoric emanating from the White House and Congress, probably have some real stake in the heaalth of the financial markets, where values could be hurt by some of these plans.

Now that 401ks are a dominant retirement vehicle, even people who don’t make individual stock investments or buy mutual funds have something to lose. And defined benefit pension recipients are typically part of pools that are making big stock investments.

So most Americans are employees and investors, not either or.

I’ve just come from a chat with the University of Michigan’s president, Mary Sue Coleman, and was tempted to headline this blog “Michigan’s Only Bright Light.” But I decided that would be unfair and inaccurate – in addition to U Mich, there are certainly other things going well there, just not all that many due to the Detroit auto industry’s collapse and wretched unemployment.

As Coleman puts it, the University of Michigan has been in austerity-budget mode for several years; it was fairly obvious shortly after she arrived on the scene, in 2002, that the U.S. auto industry was in decline and public funding for the university was heading downhill. The economic crisis sealed the deal, and along with state money, alumni giving dropped. So did the university’s endowment, which took a 21% hit.

Coleman is dynamism personified, despite a broken hand wrapped in a cast: when she says she actually likes the fund-raising chores that plague college presidents, one believes it. Of course, extracting money from alums’ wallets has been rather difficult since the economy tanked, but Coleman sees signs alumni interest may be picking up.

Continue reading…