3 ms·

This totally misses out a very important point. Colleges are hedge funds with a school attached, and attached with the only goal of making the profits they make

This totally misses out a very important point. Colleges are hedge funds with a school attached, and attached with the only goal of making the profits they make on their endowment tax-free. Not just it's about signaling. It's also a tax avoidance scheme. This world is so broken, not surprising the richest and smartest people i know never finished college (or finished a crappy one parents just forcibly sent them to) and never officially worked anywhere. And worst part of it. Startups are also the same thing. Why startups in the "classic" (YC-sense) exist (or provide any advantage over what is derogatorily labeled "revenue business"), is the historically ultra low interest rates, which makes valuations vs EBITDA, which is an inverse of effective interest rate, absurdly high. Exiting at such a valuation is whole lot more attractive than just collecting profits by running a 'normal' business. And these ultra low interest rates are funded by robbing next generation of pensioners by printing money by the trillion: by robbing ourselves, just in the old age. It is also zero sum. Also a Ponzi scheme. Also a scam. And there is no escape from that. All the world of ours would cease to exist if we one day stopped lying to ourselves. "Real" stuff ended with abolition of the gold standard, and no one wants to go back, because it was too bad, and that or Communism would be only alternatives. We better keep pretending things are alright.

musicale 7y ago
If you're going to slice up universities by financial components, the university itself is a fairly large component (perhaps billions of dollars per year for some schools.) The income for the university proper (from research, tuition and fees, etc.) is often larger than endowment income. There's often also a fairly large real estate/land management component as well as a (basically professional) sports organization. Universities differ from regular hedge funds in that they don't have the same sort of investors. In fact, because they're non-profit, they can't return profits to shareholders and instead have to spend them or keep growing the endowment.
- anovikov 7y ago
  >they can't return profits to shareholders and instead have to spend them or keep growing the endowment. This is same as saying that they exist for the illegal profit of their managers (laundering away the profits) rather than legal profit of their investors?

musicale 7y ago

If you're going to slice up universities by financial components, the university itself is a fairly large component (perhaps billions of dollars per year for some schools.) The income for the university proper (from research, tuition and fees, etc.) is often larger than endowment income. There's often also a fairly large real estate/land management component as well as a (basically professional) sports organization. Universities differ from regular hedge funds in that they don't have the same sort of investors. In fact, because they're non-profit, they can't return profits to shareholders and instead have to spend them or keep growing the endowment.

anovikov 7y ago
>they can't return profits to shareholders and instead have to spend them or keep growing the endowment. This is same as saying that they exist for the illegal profit of their managers (laundering away the profits) rather than legal profit of their investors?