The Decline and Fall

I lectured part-time at the Haas School of Business at the University of California at Berkeley over the course of three years, a few years before the economy collapsed. The Governator was (and still remains) in charge of a profoundly dysfunctional state, where frenzied popular ballot initiatives with little concern for long-term issues, could overturn the thoughtful reasoning of a legislative session… Oh, I guess with term limits (another ballot initiative), by the time California legislators learn their jobs, they are termed out. And with yet another popular ballot initiative requiring a 2/3 majority of a disharmonious legislature, reeking with inexperience, every year was another budget crisis.

But I could see the economic stress at Berkeley in the gradual “wear and tear” in the buildings as we walked from our cars passed the depreciating engineering and science buildings by the well-maintained law school to Haas, which had lots of private money supporting it. Every year, those buildings that depended on taxpayer support deteriorated a bit more. Engineering professors lamented how their “state of the art” equipment, essential in teaching students to prosper in a world that was constantly embracing increasingly new frontiers, was hopelessly obsolete. That was then, and today, the jewel in this nation’s public educational crown – the 10 campus University of California system of some of the finest schools on earth – is teetering and unraveling in California’s budget crisis.

Eight out of ten of the UC campuses have made the annual US News & World Report’s top 100 American universities, with UCLA and Berkeley pretty typically in the top 15. In international circles, rankings have changed dramatically of late. The November 20^th New York Times made this sobering analysis: “In 2004, international rankings by the London-based Times Higher Education named Berkeley the No. 2 research university in the world, behind only Harvard. This year, Berkeley plummeted to No. 39, mostly because of its high faculty-to-student ratio. The other international rankings, by Shanghai Jiao Tong University, rated Berkeley No. 3 this month.”

Already, almost every clerk, administrator and professor in the UC system is forced to take an unpaid “furlough” – the equivalent of an 8% pay cut. As a whole, the California has ripped $2.8 billion dollars from its educational budget, $813 million from the university system alone. “Across the 10 campuses, instructional budgets are being reduced by $139 million, with 1,900 employees laid off, 3,800 positions eliminated and hiring deferred for nearly 1,600 positions, most of them faculty.” NY Times. With an overall state budgetary shortfall of 49.3%, and new projections putting fiscal 2009 at an additional $6 billion below projections and 2010 revealing another $14 billion in further projected shortfalls, the state’s momentary delusion that it “solved” its most recent budget crisis is soberingly gone.

Echoes of the Vietnam War protests in the 1960s returned, as picketing students took over buildings and chained themselves to fixtures as the governing board of the UC system, the Regents, met to consider the unthinkable: raising UC tuition by a whopping 32%. The measure passed on November 19^th. While the increase won’t be assessed against students whose families earned less than $70 thousand, California’s parallel high unemployment and foreclosure rates made even families in these income brackets unable to met current debt service obligations. Students were being forced out of school because they simply could not pay; the careful savings over years was destroyed by an absurdly high tuition increase (to $10K a year for state residents starting next fall – much higher for out-of-state applicants; room and board adds another average $14,000 per year).

The November 21^st Los Angeles Times provides these additional observations: “UC has long drawn the best and brightest from all the socioeconomic strata in California, especially among the middle class, whose incomes were too high for financial aid at private universities… [But] UC also has been reducing class offerings to the point where students are finding it hard to get into courses they need. And … some private colleges already are using the cutbacks to recruit students away from the state's public universities.”

The UC system has been a driver of economic growth all over the state. Entire sectors of cutting edge industry have grown up around UC campuses, but if the businesses of tomorrow see that California’s top educational institutions have little extra to offer, the long-term prognosis for growth in California, the essential seed of recovery, seems to be much more negative than anyone can truly calculate. “‘Dismantling this institution, which is a huge economic driver for the state, is a stupendously stupid thing to do, but that’s the path the Legislature has embarked on,’ said Richard A. Mathies, dean of the College of Chemistry here at Berkeley, long the system’s premier campus. ‘When you pull resources from an institution like this, faculty leave, the best grad students don’t come, and the discoveries go down.’” NY Times

As President Obama met with Chinese leaders on his recent Asian trip, he was met with polite words but stiff resistance to his suggested policies. The U.S. was seen as the profligate child with little credibility to make demands on anyone else. As we take down the engine that drives our future – education – it does seem as if our bargaining power can only decrease further. It is indeed a question of priorities, and that’s what leadership is all about.

I’m Peter Dekom, and I approve this message.