Thank you for Beth Saulnier’s wonderful story about Ruth Bader Ginsburg ’54 (“Justice Prevails,” November/December 2013). Saulnier touched briefly on Ruth’s late husband, Marty Ginsburg ’53, a giant in his own right and a man of the highest integrity. After he passed away, the Wall Street Journal law blog (June 28, 2010) had the following to say:
Ginsburg joined the Georgetown University Law Center’s faculty in 1980, and focused his scholarship largely on the Internal Revenue Code. He also worked as a tax lawyer at Fried Frank in Washington. Ginsburg is well known for, among other accomplishments, helping Ross Perot resolve a handful of thorny tax issues during General Motors’ acquisition of his company, Electronic Data Systems, in 1984.
According to versions of the story we’ve heard, in just several hours’ worth of work, Ginsburg helped Perot save some unbelievably whopping amount of money. But the two couldn’t agree on how Ginsburg should be paid. A couple hours at Ginsburg’s hourly rate wasn’t enough, in Perot’s mind. At the same time, paying out even a modest fraction of what Perot saved as a result of Ginsburg’s work was too much, in Ginsburg’s mind.
The two settled on an endowed chair at Georgetown law school in Ginsburg’s honor.
I wish for the day when more such “disputes” could be settled in such a gentlemanly and noble way.
Dealing with Debt
Re: “The Other Debt Crisis” (November/December 2013). Because our family has had a long love affair with Cornell, I am quite concerned with its financial situation. As a trustee emeritus and confirmed liberal, I am still a fiscal conservative. The size of the endowment is not as relevant as the endowment per student. We are the lowest [in the Ivy League] in this category, trying to compete with smaller and better-endowed peer institutions. I worry that things that enrich the campus experience will continue to be shortchanged at the expense of too much debt and too many students attending on University-funded tuition, housing, and dining. Unless more external sources of these grants can be found (federal, state, and private providers), we will sadly need to find more paying students and limit how much financial aid Cornell can really afford.
With each increase in tuition, more applicants will need help. With incomes stagnant and not likely to improve much, more parents will need help. With the growth of more-affordable public institutions, Cornell runs the risk of taking weaker applicants over time. While there has been some much-needed cost-cutting, you can go only so far before you hit bone. I believe we should consider, for example, year-round options (a trimester or quarterly system) to better utilize the underused dorms, dining, etc., and generate more revenue. I think we need to put a realistic lid on Cornell-funded grants. I think the academic staff should be well paid generally, while establishing minimum teaching levels for most. I think the myriad of organizations—sports teams, theater, dance, music, and so on—need to be funded like faculty salaries. The cost of all those enrichment programs is trivial in relation to debt service, financial aid, and debt repayment. It’s kind of like getting rid of National Public Radio, the National Science Foundation, and the like in the phony name of balancing the federal budget. Let’s not fall into that trap. I still support and love the place, but significant change is needed for Cornell to remain a premier educational institution.
The tone of “The Other Debt Crisis” suggests that Cornell made a mistake by issuing debt during the Great Recession, but the facts presented actually suggest that the University made incredibly shrewd decisions during the downturn. Cornell made the right call when it chose to issue $500 million in bonds for liquidity. The S&P 500 is roughly double what is was in 2009, so if Cornell had sold $500 million in assets instead of borrowing, our total endowment could be $1 billion lower than its current level. Similarly, the University was able to benefit from historically low construction costs by continuing projects during the recession. With the recession over, Cornell is now focusing on reducing debt. It is not a “crisis”—it seems more like a “success.”
Correction to Corrections
In our last issue, we published two editorial corrections labeled “Corrections—November/December 2013.” They were actually corrections to articles in the September/October 2013 issue.