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Author: Sarah Waldeck

4

Super-Sized University Endowments: Is Your Alma Mater Richer (or Poorer) Than You Think?

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The New York Times recently published an opinion piece by a Harvard alum who was refusing to make a donation to her alma mater, which in 2007 reported an endowment of more than $34 billion. Yesterday the Times reported on a group called Harvard Alumni for Social Action, whose goal is to convince Harvard to use its endowment in untraditional ways, such as for the support of colleges in Africa. As the Harvard alum opined, “Many colleges may genuinely still need alumni contributions to stay solvent, but Harvard isn’t one of them — nor are Yale, Princeton or several other super-rich universities.”

Endowments provide plenty of fodder for discussion and this month I plan to do at least a couple of posts about them. Today I want to start with the preliminary question of how to determine whether a university or college is “super-rich.” This is a critical inquiry, because everyone agrees that if Congress adopts measures designed to spur endowment spending, most of these measures should apply only to the wealthiest institutions. In my estimation, this means those institutions with an endowment per full-time student of $300,000 or more. In 2006, about 30 universities and colleges fit this description.

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4

Anthropologists Debate Female Circumcision

TierneyLab has a post about the annual meeting of the American Anthropological Association, which included a panel on female genital cutting (FGC). Some of the panelists have stated that the Western “zero tolerance” approach to FGC represents cultural imperialism and a fundamental misunderstanding of certain cultural heritages. Other panelists have maintained that because of the American tradition of infant male circumcision, as well as the genital cosmetic surgery that some American women voluntarily undergo, those who argue against FGC speak from glass houses.

At the time of this writing, the TierneyLab post had generated a whopping 208 comments. Most, although not all, argued against the position taken by these panelists and emphasized the drastic physical effects of FGC as well as the circumstances under which it is often performed. But it’s hard to argue with one basic point of the post: genital cutting is a cultural phenomenon.

To wit, consider the experience of a medical center in Seattle which serves a large Somali immigrant population. The tale is recounted in The Seattle Compromise: Multicultural Sensitivity and Americanization, by Doriane Lambelet Coleman. (You can find the article at 47 Duke L.J. 717 (1998)). Many Somali mothers requested that the medical center circumcise their daughters; they were mystified that the hospital would circumcise boys but not girls. The mothers were clear about what they wanted: a symbolic cut on the hood of the clitoris, one that would draw blood but not excise any tissue. The mothers believed that as a cultural and religious matter, some form of genital cutting was necessary. If the hospital did not do it, the mothers would take their daughters to Somali “midwives” in the Seattle area or send them back home. In either event, their daughters would experience far more genital cutting than the mothers were proposing, possibly even complete removal of all external genitalia. The medical center convened a special panel to consider the matter. Eventually the hospital agreed to perform the cut suggested by the Somali mothers, with the use of a local anesthetic, and only on girls old enough to understand the procedure. The hospital was hopeful that this would serve as a transitional measure and that second-generation Somalis would abandon the rite.

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Accommodating Breastfeeding Mothers

mermaid.jpgBefore my guest visit at Concurring Opinions ends, I want to comment on a case that received media attention in September and October: Currier v. National Board of Medical Examiners. The Massachusetts appeals court granted a preliminary injunction ordering the National Board of Medical Examiners (NBME) to allow Sophie Currier additional break time so that she could pump breast milk during a medical licensing exam. The Supreme Judicial Court denied the NBME’s request for further judicial review. This was undoubtedly a victory for Currier, but what about for other breastfeeding mothers?

Over at slate.com, Dahlia Lithwick asked why more female columnists did not comment on Currier. She speculated that women are so beaten down by the Mommy Wars that they chose to remind quiet; or that some women silently wondered why a mother of two small children would start a medical residency; or that many women believed that because they breastfed and worked without accommodation, Currier should as well. I’ve found it difficult to discuss Currier, but not for any of the reasons that Lithwick suggested. I usually applaud policies and legal results that help women balance families and careers . But here I’m concerned that Currier’s legal victory will ultimately undermine the goal of widespread accommodation of breastfeeding employees.

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Squirrel Cop

Need some time away from the Thanksgiving festivities? Disappointed by (or don’t care about) the football scores? Spend 15 minutes listening to the segment Squirrel Cop from PRI’s This American Life. (When you link to the site, click on the “listen to full episode” icon and then fast-forward to minute 19:52; it’s worth it.)

In a recent post, I criticized James Q. Wilson and George L. Kelling for not providing a more substantive reflection in an Atlantic essay that revisited their broken windows hypothesis. But when I teach criminal law, I use broken windows to introduce the concept of police discretion and to remind students that the practice of policing usually is far-removed from what appears on Law and Order. The segment from This American Life accomplishes the same thing, albeit with much more levity than I usually muster in class.

A quick apology that I was unable to streamline the listening process. This American Life won’t give permission for their audio to be posted on any server but their own.

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Update To A PayPal Christmas

At Discourse.net, Prof. Michael Froomkin responded to Tuesday’s post about efforts to entice consumers to use PayPal instead of credit cards for their Internet shopping. Froomkin’s basic argument is the same as the one made in the comments to the original post: credit cards are more advantageous to consumers than PayPal, primarily because credit cards offer more protection to those who are dissatisfied with the goods they have purchased. The comments to Froomkin’s post discuss whether PayPal or credit cards are better for consumers, and what the loss of interchange fees means for credit card companies.

To clarify my first post, payment intermediaries (whether a credit card company, PayPal or something else ) make consumers and merchants better off. Indeed, it’s hard to imagine Web commerce existing without them. What I find interesting is how payment providers solve the chicken-or-the-egg problem that I referenced in my initial post; or in other words, why some payment options flop while others become widespread.

Right now merchants are offering consumers immediate benefits for a decision to use PayPal instead of a credit card. I’ll bet that many holiday shoppers will be unable to resist offers of free shipping or discounts from the retail price. Of course, consumers may regret their decision to use PayPal (and to make the purchase in the first instance) if they are unhappy and neither PayPal nor the merchant responds positively to their complaints. But if PayPal is going to take off as a real competitor to credit cards, consumers are going to have to use PayPal more than once; that is, it is going to have to become their preferred form of payment. Unless that happens, merchants who have changed their Web payment technology to accommodate PayPal have made a bad bet.

All of this means that how PayPal responds to the criticism of its buyer protection program will go a long way toward determining whether PayPal really takes off, or whether it remains a service that most consumers associate with eBay and not with “traditional” Web retailers.

3

A PayPal Christmas

santa.jpegJust in time for your holiday shopping, here’s a way to stick it to those credit card companies: use PayPal for your Internet shopping.

The New Times is reporting that high-end Web retailers are introducing promotions designed to attract consumers willing to use credit card alternatives like PayPal and Google Checkout. A quick tour of PayPal’s website shows that lower-end merchants like FTD and Avon are getting into the game as well.

Why do these retailers want to lure you away from your credit card? It’s mostly about processing fees, which merchants have been fighting with renewed vigor. Last spring the Washington Post reported that retailers were asking government to regulate per-transaction fees, which credit card companies collect from merchants each time you swipe your card. Credit card companies countered that retailers were seeking price controls. Now merchants are hoping that consumers will simply use an alternative form of electronic payment. PayPal and similar services charge merchants lower processing fees and offer other advantages, such as not requiring retailers to reimburse them for fraudulent purchases.

As David Evans and Richard Schmalensee describe in their book Paying With Plastic, payment systems are multi-sided platform networks. This means that PayPal and other payment providers are intermediaries that can make both consumers and merchants better off. But because a payment network is multi-sided, the benefit to a party of the network depends on how many parties are on the other side of the platform. In other words, consumers don’t care about how many other consumers use PayPal; they just care about how many retailers accept PayPal. Retailers don’t care much about how many other retailers accept PayPal; instead they care about how many consumers use PayPal.

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Twenty-Five Years of Broken Windows

police.jpgJames Q. Wilson and George L. Kelling recently revisited their broken windows theory of policing in a brief essay that appears in the November issue of The Atlantic. In a 1982 issue of that same magazine, they advanced their now well-known hypothesis that a decrease in visible signs of public disorder would lead to a reduction in crime rates. To be fair, the format of the essay—which appeared as one of many commenting on the “The Future of the American Idea”—did not lend itself to nuanced reflection. But because broken windows helped make community policing commonplace, sparked proposals for dramatic changes in criminal procedure doctrine, and is a key element in the biography of Rudolph Giuliani, Wilson and Kelling’s readers can be forgiven for hoping for a bit more.

In their new essay, Wilson and Kelling write, “Virtually all of the evidence we have from studies of police suggests that restoring order is associated with a drop in crime. This is reassuring, but it may not be conclusive. The idea has never been fully tested.” This does not satisfactorily answer scholars who have questioned whether a reduction in serious crime actually follows an increase in public order. Most importantly, it does not address whether a drop in serious crime—if it occurs—stems from the reduction in public disorder or from the increased surveillance that aggressive misdemeanor arrests make possible.

Wilson and Kelling also write, “Decency in public places may be only a small part of the American idea, but especially for those people living in dangerous, gang-ridden neighborhoods, it is an important one.” This is a statement with which it is difficult to argue. But it says nothing about whether constraining disorder is the best use of limited police resources, or how the police choose their targets in a public order campaign, or whether addressing disorder can ever mean more than moving it to a less visible place. We would all benefit from knowing more about how the original proponents of broken windows would answer these difficult questions.

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Corporate College Presidents and Super-Sized Endowments

Yesterday The New York Times had two articles that left me thinking about university endowments. One discussed the increased Congressional pressure on charitable institutions to spend down their endowments; the other noted the soaring salaries of college presidents. Combined, the articles highlight the need to challenge conventional thinking about what constitutes a strong endowment.

The Times reports that in the last 10 years, the amount of assets held by non-profits has nearly doubled, to $2.5 trillion by the end of 2005. Educational institutions held almost $600 billion. (If nothing else, employees deciding whether to enroll in TIAA-CREF should take note of what compounding interest and tax-free gains can yield!) Private foundations are required to spend 5% of their assets each year; educational institutions are not subject to even this minimal requirement.

Grinnell College, with 1500 students and an endowment of over $1 billion, was highlighted in the Times article. Russell Osgood, Grinnell’s president, points out that Grinnell gave about $1 million more in financial aid than it received in revenue from tuition and fees. He also says,“We’re here to ensure the long-term health and function of Grinnell College. That’s our sole objective.” But the Times does not quote Osgood as explaining why more than $1 billion is necessary to protect a small liberal arts college against an economic downturn. Rather, Osgood says:

Society at large benefits from those monies being invested in our economy. . . . The United States has a problem with its rate of savings, and one of the few bright spots are colleges and universities, which are two of the largest contributors to the national rate of savings. Anyone thinking about reducing endowments should think long and hard about what that might do to the overall ability to generate jobs and fund good ideas.

Maybe, although no-one is suggesting that universities empty their coffers. And the national savings rate is what not alumni were thinking about when they wrote checks to their alma mater, or what Congress was considering when it extended favorable tax treatment to educational institutions and their donors.

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Oregon Supreme Court Considers Circumcision of 12-Year-Old Boy

No graphic for this post, tempted though I am . . . .

On November 6, the Oregon Supreme Court heard a dispute between parents over the circumcision of their 12-year-old son. The father, who has recently converted to Judaism and has full custody of the boy, wants him circumcised. The mother is trying to stop the procedure and argues that it is both sexual and physical abuse. The lower court dismissed her challenge but would not permit the circumcision to occur until all appeals were exhausted.

There’s been plenty of talk about this case over at Law Blog. Reading the comments provides a snapshot of the debate over whether the United States should continue its practice of male infant circumcision. Law Blog has comments about the procedure’s health benefits and associated risks; assertions about whether circumcised males experience less sexual pleasure than uncircumcised males; and questions about whether one can criticize male circumcision and avoid being labeled anti-semitic.

I’ve argued elsewhere that even non-religious infant male circumcision is driven primarily by cultural concerns, not medical ones. Sociological research has shown that many parents decide to circumcise because they want their son to resemble his father or his peers. Moreover, the cultural ubiquitousness of infant male circumcision substantially affects the debate that surrounds the practice. Doctors, academics and judges cannot help but be influenced by the fact that they are likely to be circumcised themselves (particularly if they are Caucasian), or to have only been exposed to circumcised sexual partners, or to have decided to circumcise their own children. This cannot help but color the debate, probably in ways that even the participants themselves are unaware.

The Oregon case provides an interesting twist because the child is 12. At Law Blog, readers have emphasized the OUCH factor and argued that the boy can decide whether to undergo circumcision when he turns 18. But some other cultures believe that circumcision is too painful and traumatic for newborns; instead, they circumcise boys during late elementary school, as part of a passage into manhood.

An article in the NY Sun quotes Geoff Miller at NYU as stating that he would “be quite shocked or at least surprised” if the Oregon Supreme Court reverses the lower court. Miller has good reason for his opinion, as courts have been unsympathetic to non-custodial parents who seek to prevent the circumcision of infants, and to custodial parents who claim the procedure was done without their informed consent. Still, this case may turn out differently than the rest. The Pacific Northwest has the lowest circumcision rates of anywhere in the county. The boy is 12. The combination of these two factors may mean that judges in Oregon view this case through a different cultural lens.

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Cash Is No Longer King

money.jpgAmerican Council of the Blind v. Paulson is scheduled for argument before the D.C. Circuit Court of Appeals on November 19. You probably heard about the case when the district court issued its ruling almost a year ago; it orders the Treasury Department to design and issue paper currency that permits the blind to readily distinguish between different denominations. Plaintiffs invoked the Rehabilitation Act, which aims to ensure that the disabled fully participate in today’s society. They successfully argued that such participation requires that the visually impaired be able to conveniently and confidentially exchange currency in ordinary daily purchases. The district court’s opinion was notable for its silence about the striking changes in the ways that Americans pay for goods and services, as well as its failure to address the staggering ancillary costs that accompany major currency change.

As my colleague Erik Lillquist and I have written about here, currency is just one component of payment systems in the United States, a system that has undergone massive transformation over the last several decades. Of course the American Council for the Blind is correct when it asserts that the blind need to be able to engage in everyday commerce. But this sort of participation rarely necessitates the use of currency, which is increasingly becoming a twentieth-century relic.

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