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Everyone Hates Harvard
theodp writes: Hedge fund manager John Paulson personally took home nearly $4 billion in 2007 after convincing banks to create securities of sub-prime mortgages he could bet against. Now Harvard, which originally passed on an opportunity to join alum Paulson in his big bet, is also reaping the rewards of the nation's financial crisis as it renames its engineering school the "Harvard John A. Paulson School of Engineering and Applied Sciences" after receiving a staggering $400 million donation from Paulson, the largest gift in the university's history. Quartz argues that Paulson's $400 million Harvard donation just reinforces inequality. Author Malcolm Gladwell took to Twitter to voice his distaste (sampling: 1. "It came down to helping the poor or giving the world's richest university $400 mil it doesn't need. Wise choice John!" 2. "If billionaires don't step up, Harvard will soon be down to its last $30 billion." 3. "It's going to be named the John Paulson School of Financial Engineering.") And, in Everyone Hates Harvard, Philip Greenspun notes that even WSJ readers reacted with vitriol to the news. "I would have thought that Paulson would be a hero to market-following WSJ readers," remarks Greenspun, "not a villain."
Big endowment schools are simply not the most effective place to donate. If you have a lot of money and it's really where you want to give--or more likely if you're trying to buy someone's way in--sure, nothing's stopping you from donating. But if your goal is improvement of almost anything, it's just dumb.
Donate $1/year to keep up your alumni participation numbers, which influences the ratings of your school and the value of your degree. Aside from that, give someplace where the dollars are more effective.
If you are going to give to a school, give to a school that does a lot of public interest work but has a low endowment-per-capita. (Georgetown Law comes to mind, for example--a law school with a strong public interest program and a small endowment per capita).
If you are going to give to to another non-for-profit, look for direct aid dollars. Better yet, look at the Gates foundation or the like--the people who are spending billions and their life's fortune on this hire pretty good people to run it, aiming at maximizing long-term benefit. That is kind of awesome. Leverage their investment to direct your own. Picking a charity on your own is *hard*--too many are scams or mismanaged.
No, it says right in the summary that the banks' decision to bundle sub-prime mortgages into complex derivatives that, on paper, had low probabilities of failing but that, in total, created systemic risk that far outweighed the risk associated with any single mortgage bundle. He knew that presenting it in a certain way would enable him to sell the idea.
He's nothing more than a common crook, peddling dream scams to the public. Just because his marks were supposedly informed investors does not change the fact that he exploited their existing evaluation frameworks in a manner he knew, or ought to have known, would create huge harm to the broader market.
You really need to check your biases.
There was an 11 year hunt for Bin Laden, But your going to assign all the credit to the guy who happened to be there at the end ?
Solved the wars
I love your use of the word solved. It's like solving power consumption issues with grenades.
They are greedy assholes. Even Adam Smith recognized that. The insight Smith had that greedy assholes actually produce beneficial outcomes for society.
Think of capitalism a bit like nuclear power. Capitalism is all about harnessing greed to the benefit of society. Unmanaged or poorly managed it results in a catastrophic meltdown to the detriment of all. With the right controls in place and good oversight (but not too much) it can be a hugely powerful force for good. This requires sensible rules fairly enforced. Too few rules and the meltdown occurs (see 2008 financial crisis). Too many rules and you don't get much benefit because nothing happens (the reaction shuts down). If things get too hot or a problem occurs you institute rules (like control rods) to throttle down the reaction before it blows.