I heard on the news Friday that Swarthmore College, a school with a certain degree of engineering chops, has had protests about its endowment fund investing in the oil and gas sectors.
Swarthmore’s endowment fund is apparently caving in to demands and will stop investing in oil and gas. The reporter said a spokesperson allowed as how the change would have a cost of about $200 million.
You know how I think, right? According to the Swarthmore College Catalog, the annual student cost is $55,750. Forgetting inflation, if we add $10,000 and change for transportation, books, beer (not much beer) and incidentals, we are at about $66,000 in yearly expense. If one divides $200 million by $66,000, the result is 3,030 students. So, by avoiding the petroleum biz, maybe 1,000 Swarthmore engineering students won’t get engineering degrees, and maybe one of them would have come up with a great alternative energy source. We’ll never know.
And the oil biz seems to be heating up. It cost me more than $70 to fill up my car Saturday, and I had a 15-cent per-gallon discount. So, maybe, ultimately, the politically correct decision will cost Swarthmore more than $200 million.
The last great college endowment stupidity, before this one, was when a certain alumni class at Harvard (apparently, craziness at colleges and universities is no respecter of age) objected to the manager of the endowment receiving a bonus of a million or so. The alumni class created so much flap that the manager resigned to start his own investment fund. Could you guess the new fund’s biggest investor? You got it in one: Harvard.
Now the former endowment manager makes far more than $1 million, or whatever amount the bonus was, and the extra pay was, of course, at the time, a reward for realizing excellent results.
Have an outstanding week and keep in mind that market forces are potent and powerful. There’s nothing in the world wrong with creating better and renewable energy, but the road to get there is not likely to get any smoother because Swarthmore quits investing in a significant part of the commodity world any more than U.S. companies refusing to buy clothing from Bangladesh helps poor workers in that country.
The collapse of the Bangladeshi garment factory was a horrible and unspeakable tragedy, but so is the fact that tens of thousands of workers may lose their jobs because U.S. companies suddenly are going to be politically correct.
For more from Richard Hoe, see: