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Universities hoard cash while students overpay

Victor Fleischer in the New York Times: Who do you think received more cash from Yale’s endowment last year: Yale students, or the private equity fund managers hired to invest the university’s money?

It’s not even close.

Last year, Yale paid about $480 million to private equity fund managers as compensation — about $137 million in annual management fees, and another $343 million in performance fees, also known as carried interest — to manage about $8 billion, one-third of Yale’s endowment.

In contrast, of the $1 billion the endowment contributed to the university’s operating budget, only $170 million was earmarked for tuition assistance, fellowships and prizes. Private equity fund managers also received more than students at four other endowments I researched: Harvard, the University of Texas, Stanford and Princeton.

Endowments are exempt from corporate income tax because universities support the advancement and dissemination of knowledge. But instead of holding down tuition or expanding faculty research, endowments are hoarding money. Private foundations are required to spend at least 5 percent of assets each year. Similarly, we should require universities to spend at least 8 percent of their endowments each year.

The federal reserve is not your friend

Sen. Rand Paul and Mark Spitznagel in Reason: The Federal Reserve is literally owned by the nation’s commercial banks, with a rotation of the regional Reserve Bank presidents constituting 5 of the 12 voting members of the Federal Open Market Committee , the body that sets targets for certain interest rates. The other 7 members of the FOMC are the D.C.-based Board of Governors — which includes the Fed chairperson, currently Janet Yellen — and are nominated by the President. The Fed serves its owners and patrons — the big banks and the federal government, while the rest of Americans get left behind.

The Federal Reserve has the ability to create legal tender through mere bookkeeping operations. By the simple act of buying, for example, $10 million worth of bonds, the Federal Reserve literally creates $10 million worth of money and adds it into the system. The seller’s account goes up by $10 million once the Fed’s monies are received. Nobody’s account gets debited for $10 million. This is a tremendous amount of power for an institution to possess, and yet the Fed shrouds itself in secrecy and is accountable to no one.

#BlackLivesMatter should work with Republicans

Leon H. Wolf in the Washington Post: As a conservative who has advocated for criminal justice reform, I have a lot of admiration for the #BlackLivesMatter movement, which has been remarkably effective at raising awareness of the myriad ways that black Americans are treated differently — or, put more bluntly, treated worse — by law enforcement. Although I haven’t always agreed with their tactics or rhetoric, I have appreciated the movement’s tenacity and unwillingness to be mollified by platitudes and talking points from politicians who’ve attempted to co-opt them.

That’s why I think #BlackLivesMatter is wasting its time pressing Democrats for answers, or action. The party of big government can’t meet their demands.

For starters, the Democratic presidential contenders have done an infamously bad job of responding to #BlackLivesMatter protesters who’ve attended their events. Sen. Bernie Sanders and former governor Martin O’Malley were practically heckled off the stage at the Netroots Nation conference after they were unable to effectively articulate, let alone posit, concrete solutions to protesters’ concerns. Former secretary of state and Democratic front-runner Hillary Rodham Clinton’s campaign has been similarly panned by #BlackLivesMatter leaders.

#BlackLivesMatter protesters won’t find answers to these systemic causes of hostile police interactions with black citizens by asking Democrats, because Democrats are too invested in a system that drains revenue from individuals any way it can.

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