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At the University of Michigan, pro Palestinian protestors have "Shut Down" student government, by being elected to it (gifted link)
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- Title
- At Michigan, Activists Take Over and Shut Down Student Government
- Published
- Aug 27 2024
- Word count
- 1194 words
I used to be an advisor for student organizations, and this is a form of protest I can support. The student body can elect these representatives out if they want, it doesn't disrupt academics, and it can go on as long as needed to annoy the administrators who will likely have to deal with refunding fees since many states have strict dispositions on the use of fees. The university may also have to shift funds around to cover shortfalls caused by lack of fee spending. I'm not taking a position on these specific students or their demands (I haven't checked) but the form of protest seems ideologically aligned to the spirit of student and faculty governance.
Yeah that's basically where I am. This is what we're supposed to be teaching these students to do. We should want them to be this passionate and involved,. especially when they "do it the right way."
While I don't ideologically agree with these students, I do admire their drive to stand for what they believe in to the point of becoming political.
I generally don't understand what divestment will accomplish since there will usually be someone to buy the stock up, and often it won't be someone the students would prefer (usually firms like BlackRock who are pro-war). Alternatively, consider that some of these investments are scientific or educational in nature, like collaborations with the universities in other countries.
It's a complicated thing for sure. To a great extent I think a lot of it is students trying to exercise influence and feel heard in one of the limited ways they can. Divestment, especially depending on how it is carried out, can certainly be a blunt instrument.
Having spent much of my career in higher ed, one of the fun things has always been watching passionate young people get worked up about things and get engaged. Appropriately channeled, it's a great way to help students figure out who they are and what they believe in a complicated world.
It's also a lot of fun to play devil's advocate with them.
Cosign, even if I've only been here for 8 years.
Absoutely. This is how we enact change overall, is teaching the next generations to be passionate about doing the right thing and doing it in the most appropriate way. Like I said, I don't agree ideologically, but I should amend my statement to say I am damn proud of them for standing up for what they believe in and running for an office that will afford them the ability to enact the change they want to see in the world.
And by ideologically, I am against DBS, but I do see how it can be used to force Israel to stop commiting war crimes.
The most profound impact of divestment is disaligning incentives. It's easier to be critical against war when you stand to gain nothing from it.
I think economic incentives are overrated when it comes to political causes. It’s an easy accusation to make, but often doesn’t hold up. Causation typically goes the other way, where people try not to invest in things they don’t like. Whether that makes or loses money is hard to say and not really the point.
You need to be pretty heavily invested in something (like, working at a defense contractor invested) for that not be the case, and even then, people can be skeptical about their employer.
Sometimes people hope it’s true because it would make their cause more meaningful.
I'd agree the economic incentive itself isn't terribly strong, though it is objectively real, in the way that the gravitational effect of Venus on Earth's tide is weak but certainly there. If the issue is muddy and complex, a handful of these small changes can amount to a meaningful effect on whether you're slightly in favor of something or slightly opposed to it. It's also such an inoffensive request that the stark opposition to defense divestment itself raises questions about whether it may be more important than expected.
I think it could be treated as a weak force when we’re talking about what many people do on average, as economists do. But individually, it’s something people will pay more or less attention to, depending on what else is going on and their habits.
People have very different attitudes towards money. Some will take advantage of every opportunity, trying to save money with every transaction. Others don’t care so much and it might be more important to them to seem generous. People have different ideas about the ethics of earning and spending money.
I think there's something to say about not wanting your money to support something you don't agree with. It's definitely more about moral stance than economic change though.
Running as the Shut Down party, they were elected and have done what they promised, shutting down funding for student orgs and teams until the University divests.
edit:
Explainer for Student Government Associations at universities
I'm not sure how common this is abroad, but many US colleges/universities will have some form of student government that determines how these fees are spent. Often they're pretty low key, though elections can get weird sometimes, but sometimes, they become pretty dramatic and due to low turn out, a motivated group of folks can get both serious and humorous platforms elected. It depends on the school how much control they have over changes, but most seem to get at least some say in student fee expenditures. Some schools prohibit spending these fees without SGA passing it.
As I've noted on previous threads, I do not want to rehash the larger conversations about the actual conflict, but I'm interested in how college students are engaging politically in protest and now in student government to try to make changes happen. I don't know if Michigan can divest, I know our institution has zero control over its investments but they may be receiving other donations for naming rights or the like that they can impact.
I don't know that I agree with them but I admire their willingness to keep fighting and I get frustrated when administrators tell them to follow the rules, but wait no, not like that. And I'm concerned it will turn into a desire not to have shared governance.
(Gift link)
Im not really interested in discussing whether the Shut Down party is justified in general, but I am curious about the non Shut Down party members.
Are they justified if they were to be upset about this? Regardless of their stance toward the broader issue, if you are someone who is involved with student government out of a genuine passion for it, and your whole year is scuttled because of a protest of a broader issue outside your control, would that be acceptable for them to be upset?
You mentioned the administrators not being sympathetic, but I feel like fellow students would be a separate case.
I think everyone is fully justified in being unhappy about losing elections, regardless of the level of government it occurs at (from student body, all the way up to federal law and beyond). If losing doesn't upset you, was your heart really in it in the first place?
At the same time, this is democracy functioning as it should. No one deserves a political position just because they really want it. Anyone interested in elected public service must understand that elections are not about fairness and rewarding hard work; they are about the rights of the people to choose their own representatives.
I see what youre saying, but at the same time I dont feel like this really makes sense to me.
If this was actually important, like if this was the federal government and some group or party caused a shutdown of the government, people would not be as chill as the perspective you are describing. I believe we have in fact had a few temporary government shutdowns, often as the result of some politician insisting on some kind of concession to their platform and holding up passing some critical funding bill to achieve that.
And people dont just brush it off when that happens, they make it a big thing and try to shame the other party for having caused it. People treat it like its an unambiguously bad thing to do that. They treat it like there are actual negative consequences ti be concerned over not just people being salty that they lost.
Now granted, this doesnt matter as much. Most students probably dont care what the student government is doing. But I would imagine some of the people actively involved in student government care a great deal, and probably want to do the things that a student government typically does.
I think this is really the key difference between a student government shutdown and a US government shutdown. For the latter, the stakes are much higher -- government employees won't get paid, putting them at risk of homelessness; the US risks having its credit downgraded, financially harming virtually every American; and people could literally die. When a politician insists on a government shutdown, they are arguing that the policy they're advocating for is more important than the potential harms listed.
To be more concrete, here were some of the impacts from the 2018-2019 government shutdown, in which Trump-aligned members of Congress held the budget hostage over funding for the border wall:
In contrast, a student government shutdown only creates inconveniences. There are no long-term harms as far as I can tell.
Yeah, I fully agree. There was a lot of complaining about the encampment protesting, but if people are even up in arms about this then peaceful protest is non existent. I think it's important to also think back on people complaining about sit ins and other protest actions against Jim Crow and Apartheid South Africa.
From what I understand student government allocates funding for a number of student activities, so those students quoted in the article are missing out on something. Its not their livelihood, but some of the quoted students seemed put out by it.
I get why folks would be upset.
I was an advisor for student groups in the past, and know how groups can struggle to fund certain activities. I think most student groups will be able to function without these funds though, maybe with some extra effort or challenges. They can fund raise, reduce costs associated with their activities, pivot their plans, etc. The administration could also help by doing things like reducing facility use fees for impacted groups. Honestly, it's a great exercise in executing and leadership in a period of change. It's a great opportunity for them.
So I get that some will be upset, and they have every right to be. I also think this is an invaluable civics lesson on the importance of voting in every election. I hope these students take that to heart and stay engaged as they leave college. And if enough students want change, and care enough to show up and vote, then this group will get voted out.
My bias here is probably that I loved challenging students to grow, adapt, and face adversity. And I'm thinking about how fun it would be to guide groups through this situation. It makes me miss my days working on campuses.
Yeah, I guess I can understand that. I dont really know how to express why this seems off to me. I just feel deeply unsettled reading the comments here. It seems so disconnected from reality, like the actual tangible effects of this dont mean anything to anyone, but also this is supposed to be really important somehow in a way I just can't comprehend.
Is it the dichotomy that how can the protest action be important, and not cause real world inconvenience or harm? Because I can see that.
I view campus protests as students using the tools they have to feel heard, which may or may not have significance beyond that. Normally, this wouldn't be newsworthy, except that the politics in Washington happen to intersect these protests in a way that amplifies their significance. So I don't think the withholding of student funds is significant to the student body in any major or lasting way, but could get picked up by partisans in Washington to pay political football.
No, I dont think thats quite it, but its close. I gave a longer response to psi, but its more the disparity between the perceived positives and negatives of this protest being so far apart that the negatives get handwaved away as not really counting.
Which I feel leads to an unaccountable moral perspective thats totally detached from the actual consequences of your actions. You can do something that puts more harm out into the world than it does benefit, and theres no way for someone to look back on their actions and say "in retrospect, I guess that was a bad thing I did, maybe I should stop with the current approach Im taking".
Its like, youre protesting for a cause you think is good, and its such a good cause that whatever you do is justified, even if in the long term it doesnt actually help anyone.
So I actually agree that it seems like there's a current attitude of scorched earth protesting - it doesn't matter who else is harmed, it doesn't matter what else happens as long as I continue to bring attention to, and try to bring down anyone I think is the slightest bit indirectly contributing to the thing I'm opposed to. Hindsight might show them there were other paths. I also think hindsight might look back and say the rest of us were tolerating heinous actions and complicity with those actions.
I am lucky to be insulated from this, they're not at my institution so I'm not seeing the negative effects close up. But on a macro scale, I just... they get arrested if they protest and demonized by adult politicians. So they create a platform, are elected by the student body, and follow through on their platform promise...
I just don't think it's fair to say they're still "doing the wrong thing" even if it turns out this doesn't cause lasting change.
I have mixed feelings on this. I get where youre coming from, it sounds bad to hear people are getting arrested for voicing their opinions.
But on the other hand, thats kind of WHY I support them. Thats what makes me believe them that they really care, is that they're willing to risk something of themselves. Thats the deciding factor to me between someone having genuine righteous indignation and someone who is just acting sanctimonious so they can talk down to others.
So it feels off to me for it to be too big an ask for the protestors to risk something of themselves, but still say its totally acceptable to push an inconvenience onto someone else for that same effect. Someone who didnt necessarily volunteer for the protest and also has a tenuous connection at best to the thing you are protesting.
As an alternative, you could host a protest by having the protestors withdraw from classes or not pay tuition for a semester. I understand why nobody wants to do that. Itd be a big personal cost to miss a semester and delay your graduation plans. And thats maybe just too big of an ask, even if ending genocide is whats at stake.
But if you dont care enough about this that youre willing to make that kind of sacrifice, maybe you dont really care enough to justify withholding funds from the Ballroom Dance team, even if you dont care about them or think their problems are important.
You cant say that we all just should accept protestors inconveniencing you because inconveniences are the only way to get results, and then also say the result really doesnt matter one way or another. The result SHOULD matter.
I don't understand the point you're making. These are almost certainly the same students who were in fact protesting in the spring. Fifty people were at a protest organized by the Tahrir Coalition (a self described student led activist group) literally today. If they're not the same students, they're likely affiliated with the same or similar protesting organizations. Also, there are always people who cannot risk getting arrested - they're undocumented for example, they take medication they can't risk missing, they cannot afford an attorney, or they have kids to take care of at home. Good movements do not kick those people out, but enlist them in different ways.
You seem to find some purity and thus greater value in the risk of consequences. But none in getting elected and implementing policies? These are two prongs of the same fork, not opposing strategies. I support protests and I support students using the democratic process.
I don't understand this fixation on "inconvenience without personal risk". In a perfect world, protest would not come with the risk of violence or incarceration. It's not more pure, it's demonstrative of our broken system when a constitutional right to protest is met with batons and cuffs. (There's some weird cultural Christianity at the heart of suffering making actions morally superior IMO. We have a weird thing for martyrdom... And then sanitizing the martyrs away into palatable role models, but I digress)
I see this not as protest without risk, but how protest leads to power. They worked hard to be noticed, to get elected, and are now engaging with the university the way they told these students to, through the student government. As for why the outcome matters less, because it's college and it's a learning experience. Educational experiences aren't just the classroom. Withdrawing from school just loses you a voice within the school. "They should just leave" is rarely a compelling argument.
But ultimately if the clubs are so inconvenienced I think they've learned a good lesson themselves about not being more politically involved, hopefully they vote this fall and for their SGA in the spring if they don't like the current government's policy.
I mean, honestly they should protest, right? If they want to get their demands without some risk, they don't really deserve it.
Ive made a bunch if comments trying to explain my position, I dont really have anything else to say at this point.
You've explained it, I just don't understand having it. I'm not trying to be difficult, I truly don't get why one is noble and the other is inconveniencing the dance team. And why the dance team isn't held to the same standard.
Well, I dont feel like the way you described it is an accurate description of my position, but I already put in a lot of effort into making a bunch of comments to try and explain myself. And it doesnt seem to have worked. I dont feel like we are on the same page. So I dont think theres anything else to say here.
I think that is very clear, thank you! I wasn't thinking in terms of the moral perspective/accounting of the shutdown folks.
For what it's worth, I think that is a very good question to ask, and your discomfort very reasonable. I think what ameliorates that for me is that I view college as a low(er) stakes place for students to make mistakes, figure things out, and hit their stride. Which isn't an attempt to infantilize them or excuse really significant errors of judgement or character, but just sort of acknowledging that all adults benefit from being extended a little bit of grace on their arc of maturity.
Thank you for taking the time to explain; have a great day!
Thats fair, and I can understand why you would feel that way. I appreciate the good conversation.
Of course they are missing out on something, and to answer your original question, I think they are justified in feeling upset. I'm not here to argue from a thousand miles away that the students should just suck it up and stop whining. But one philosophy of protesting is that inconveniences effect change, and by this philosophy the inconveniences are the point -- otherwise the protest would be entirely toothless. If the students don't like what's happened, then they should either rally against the administration or rally against the student government.
What I would object to is leaning too much into the comparison with a government shutdown -- the impact of a government shutdown is much greater, making the two types of shutdowns categorically different in my eyes.
Thats fair. Its really not the same at all.
But I feel a deep sense of dissonance that this lesser inconvenience just gets brushed off as rounding error in the moral accounting here.
Lets say we tried to assign some ethical value to a given action to figure out whether its a good idea. How long do you have to wait in between the start of your protest and the cutoff for when you say it succeeded or failed?
Because the way I see it, the way it adds up is this: in the short term, you are imposing some minor amount of bad onto a group of people, to inconvenience them, as you say. This is a necessary bad thing, under that philosophy, because it is done in service of some greater good thing that will result in the long term.
But because this is happening at some indeterminate point in the future, theres really never a failure condition. Because youre doing that protest as a part of a movement, technically anything you do contributes to that movement even of it doesnt directly result in a positive change.
You are claiming implicit success when you use the potential future benefits of your protest as a justification, but you dont actually have to succeed.
What this results in is a moral philosophy where you can justify any amount of lesser douchebaggery as long as you are attached to a big enough cause. And a cause as big as fighting GENOCIDE is enough that any inconvenience you impose on a single student or a group of students will never really matter.
Students who arent even the people you are actually upset with.
Its an unaccountable system of ethics, I think, and I dont feel like it should be valid. But according to this philosphy of inconveniences, its like the argument is that if I am in favor of any kind of activism, I have to accept this as reasonable. So it feels like I would need to oppose all activism in general in order to object to this.
I think there is a failure condition, though: if the current student government doesn't succeed within the time it takes the student body to get fed-up with their antics, then the "Shut Down" party will be voted-out and things will return to business as usual.
I think you're asking a fair question in the abstract: when does an act of protest become excessive, especially when the inconveniences are offloaded to some third party? I don't know the full answer, but I would assume it would include the following case: your act of protest is excessive when it undermines itself by causing your movement to become less popular.
In this particular situation, it just so happens that the method for "overruling" the protest perfectly overlaps with the method for measuring whether the protest has popular support: voting.
But if they reach that failure condition, does that retroactively mean that they did a bad thing?
Right now I feel like some of the comments on this story are dismissive of the people who might be put off by this, like its not a big enough deal to matter, so its not being taken as a bad thing. One of the comments just kind of dismissed it as "well of course the losers are upset, people who lose will always be upset".
I will also say, in reference to the idea that the valid method of overruling this protest is to vote, the people who are affected by funding distribution by student government are a minority of the student body. Many students arent affiliated with any of the responsibilities of student government, so it doesnt matter to them if it gets shut down. There is only a minority of the student body which is impacted by the protest, so only a minority of the student body has an active stake in the outcome.
Maybe, maybe not? Asking whether a protest is effective is different from asking whether a protest is justified, which is different from asking whether a movement is morally sound. I think answering the first question is much easier than answering the other two, even though they're all related.
I'm not sure this is really the case. From the article, it sounds like the student government is tasked with dispersing funds to student clubs and activities, so in some sense I would expect most students to be affected. The article even gives the example of the funds being used for iftars, which I think would disproportionately affect those members of the student government involved with the "Shut Down" party.
I also don't think the math supports the proposition that the inconveniences have been offloaded on a disinterested third party. The article mentions that only about 1/5th of the student body voted. Since the "Shut Down" party only won about half the votes, that would mean that only 1/20th of the university's students are involved in student activities, assuming all of the students involved in student activities voted against the "Shut Down" party. So this means (1) there are very few students involved in student activities (unlikely), (2) there are students who care greatly about student government yet don't participate in student activities (also unlikely), or (3) the students who would be affected have mixed support for the "Shut Down" party (most likely in my opinion).
This seems like philosophising and abstracting protests to the point of absurdity though, we cannot expect any protest or even any policy or action in general to take place if and only if the result is known beforehand.
People protest because they feel strongly about things, if we start condemning even a protest with a built in mechanism for ending it peacefully exactly as it started we might as well condemn protesting in general which ironically brings us back to Might is Right and effecting change is the privilege of those that do not care at all for inflicting any amount of harm to anyone.
A protest with zero inconvenience to anyone is a website (and I'm sure someone would take offence to that as well).
Its only abstract because it is absurdism though. Its a catch 22.
Anything that I would possibly object to is something that bothers me.
Anything that bothers me is justifiable because thats the only way possible be able to accomplish anything is if there is a carte blanche right to bother people.
Therefore anything I might object to is immediately justifiable and not objectionable.
Im NOT saying we should have to predict the result of a policy or action to be predicted beforehand. What I am saying is that you should have to accept negative consequences of your policy or action either way. Meaning whether the protest is successful or not, the negative effects of the protest should be considered relevant, and not handwaived away.
Because if that is the case, then the rest of my argument about how this specifically is a bad protest is relevant. But thats not relevant if anything goes and any kind of negative behaviors done in the name of protest are justifiable.
The only reason I was talking about retroacrively assigning moral credit was to try to find any example where we could all agree a protest is bad.
I guess I don't understand what form considering them relevant would take. I'm sure everyone is aware of the disruption since it's a fundamental part of the protest but you mean something beyond that and I don't understand what you're getting at.
I think the article interviewed a few folks, the student orgs involved are probably not thrilled. But also this party was elected.
People who lose the elections will always feel bummed about it though. And these students definitely do have a "genuine passion"
Hmm, ok. I feel like that doesnt quite answer what I was asking, but Im not sure if thats because I did a bad job of asking the question, or if thats just the nature of these kinds of conversations.
I feel like myself and @RoyalHenOil answered you similarly. I'm empathetic to the people who lost the election. Others elected outside of those party members (generally senators IME, the leadership roles are usually a slate of members and elected together in practice), may indeed wish to do something they're not able to do. But that's part of government too. There are regularly "shut down" threats and such in the US federal government.
But I feel fundamental to this question you're asking is an assumption that the currently elected party is somehow less serious, less passionate, less worthy in their student government role. They're doing Student Government. And I'm more admiring than upset because I have the luxury of distance and because we tell students they can't protest here or there and that they should go about things the "right" way but then complain about it when they do that too.
This is the university I went to, so I have some connections. I've been shown this article which makes a reasonably convincing argument about this lovely Public In Name Only university essentially being a front for an investment fund (its endowment) engaging in insider trading, and that the real reason the university refuses to divest is because they have a vested interest in the genocide continuing.
So, I definitely am not reading a 54 page booklet, but I think the claim that it's a "Front for an investment fund" is not the most reasonable interpretation of an institution that enrolls 52k students.
I think it's reasonable to be suspicious about whether they're being honest about their investments. I'm not financially savvy enough to interpret the information. I don't really think that the university president and board or whatever actively want a genocide.
Believe what you want, but the opening of page 6 makes a pretty compelling argument for just that:
I'm not making these accusations lightly, there are not a lot of logical reasons for the kind of behavior being exhibited here otherwise.
And I'm not saying that individual people want dead Palestinians. I'm saying that umich, the entity, is benefitting from it.
That's how endowments work. I've managed endowments and lifetime gifts at a university. We used 4% as a target of what we could spend to maintain the endowment. E.g., let's say an industry trade group wants to create an endowed position to study their interests. An endowment of $3.75 million would sustain a $150k salary, or 4% in perpetuity.*
So those targets you cite are absolutely normal for endowments.
*Things get a little complicated when you get 10-20 years out depending on the performance of the endowment.
This makes no sense to me. How on earth does it make sense for an endowment that ostensibly exists to support students to decrease the percentage of money it pays out to those students? Wouldn't it make sense for the endowment doing well to mean more money going to the university, and not an excuse to decrease the percentage so that the endowment managers could make a little more money?
This isn't the behavior of an endowment that's beholden to the university community, it is the behavior of a greedy corporation.
Because the endowment makes a certain rate of return, and you don’t want to overspend. The 4% example given is a common safe withdrawal rate, where you can spend that percentage of your investment and that withdrawal is cancelled out by the capital gains made on the account during the year. Lowering the SWR means you can have a larger cushion for lean times.
yes, I understand that if you spend less money you have more money saved - but this begs the question again. Why does this percentage only go down? Umich's endowment return is consistently near 10%, and in fact only slightly less than the S&P500. But the percentage set aside for the actual university has only shrunk. Like, the students aren't advocating for anything radical here. They're saying dump the risky and weird investments and put things in a broad market index fund like the S&P500, or something else similarly simple and unrisky.
To be clear, wouldn't the S&P contain companies they'd also want the university to divest from? Or have they made a specific request here to invest blindly instead of intentionally divest?
In the 1980's the US large cap 3 year rolling average rate of return was 15%. In the 2000's the same average was 12%.
These portfolios aren't just stocks, but real estate funds, bonds, international stocks, forex, etc. I'm not gonna crunch the historical data on the world equity markets, but I suspect I'd find the same thing. The S&P is irrelevant; the fund is much broader than that.
These endowments are often made up of many contributions with dispositions to limit the withdrawals. Even when it is a free and clear donation, the finance goals are to sustain the relative purchase power of annual withdrawals, so you need to beat inflation, hit a minimum growth target, and the rest excess growth is what you withdraw.
And back to my example, many small endowments that make up the larger endowment exist to fund specific positions, or create an endowed chair, etc.
We can agree to disagree that this is a compelling argument. It's a claim, and as I said, I'm not qualified to understand the financials I believe my university's investments are invested in state funds and treasury bills. Our foundation is separate and not technically managed by the university.
I don't know what counts as the Endowment. I didn't go to school for this so, I know less about it and that means I don't know how to interpret the data from either a financial sense or a university policy sense.
But I believe that the claims, one of which is based off this article: https://www.thenation.com/article/archive/universities-are-becoming-billion-dollar-hedge-funds-with-schools-attached/ are hyperbolic.
This article says to me, that there are definitely ethical issues in university investments beyond the BDS movements, deeply tied to state funding for those public schools, but I think the claim of "is a hedge fund" or further "is first and foremost an investment firm" is beyond what is supported here. And I think that the idea that these individuals are literally pro-genocide because it financially suits them is a pretty big claim about the motivations of some very specific individuals. Not one I'm comfortable buying into without some much more explicit evidence.
Maybe I'm a dummy putting my head in the ground, but I don't think so.
It seems really unlikely that UM has such a disproportionate portfolio that the performance of Israeli company stocks would significantly impact their overall returns. The point of these funds is to hedge risk across a broad portfolio, so you can grow the fund and realize gains to fund scholarships, etc. Disproportionally investing in companies associated with unrest seems like one of the least risk diversifying choices one could make short of penny stocks and individual companies.
I don't really begrudge you for not reading a 54 page document, but it is really frustrating to post something from the literal President of the Graduate Employees Organization of the university in question and have the highest voted response essentially be "I didn't read this, but it seems wrong based on [gut instinct]"
If you would look at page 10 for example: Figure 2 shows the endowment consistently underperforming the S&P 500. One would imagine such an endowment would be primarily such low risk investments like bonds and other fixed income sources, but in fact the 4.5 billion invested there is are dwarfed by these so called 'Nonmarketable Alternative Investments' like private equity firms, venture capital, real estate, etc. There's 10 billion dollars in those. The money is invested across 280 different investment banks who fund various MIC startups and subsidiaries. I don't have a problem with people poking holes in the methods or whatever used to find this data, but Jared Eno is not some nobody crank on the internet.
The yet more infuriating part is the direct investment in both companies known to directly support the IOF and in the shekel directly. What other reason is there to directly place $37 million in shekels if not material support for settler-colonialism? Because that's what investing in Israel does.
None of that has any bearing on my point that the performance of Israeli owned company stock would likely not move the needle on fund performance.
It's clear that the source you are citing is not unbiased. They started with a premise, and went shopping for anything to support it. They point out that the endowment spend rate was reduced from 1986 to 2010 without checking to see what the rolling average on equity market rate of returns were in those decades. I did; the rates went down.
Look, one of my state retirement accounts is invested in funds that include international real estate, venture capital, private equity, forex, etc. It takes 3 months to sell a share because of the time to calculate current market value of the shares equity stake in real property.
These are the same types of widely diversified equity market funds that endowments are parked in. As I said in another comment, I've managed disbursements for small endowments for things like endowed chairs and faculty positions. Nothing that is cited that I've seen is out of the ordinary.
Edit: and the university is likely simply buying shares in existing funds diversified across the global equity market. They aren't making individual investment decisions; the fund managers are doing that.
I had an angrier comment typed but I will simply not take the bait in your second paragraph. However I do recognize it.
My only further comment is that if you see "nothing out of the ordinary" then the entire field is rotten. Every university invests in the military industrial complex? And justifies it by saying "everyone else does it"? And this is somehow supposed to be a rebuttal? No wonder the students are so livid if this is the level of complacency of the people running the funds. If you're going to have nearly 20 billion dollars to throw around at least do something more productive for the world than funding mass slaughter indirectly enough for liberals to run cover for you. Disgusting.
Most university endowments, retirement accounts, and managed funds invest in non-securities, which includes real property and venture capital.
I'm sorry you think there was bait in my reply; there isn't. I simply disagree with your position and that report. The report is replete assumptions and with loaded language.
Bright Red letters large don't page 7
Further is, also large red letters
Additionally, all of their arguments are based on scrutinizing individual elements of this broad portfolio, without ever looking at it in it's entirely. The risk and return strategy and performance of a fund is an emergent property of its composition. You have to look at all of it together.
It is easy to go through any fund and nitpick if you don't understand selecting inversely correlated assets as a hedge strategy. They also base some of their criticism on the fact that these funds can engage in more trades because they avoid some taxes. I read through to page 26. It's like reading a dark mirror version of a business school finance book. They describe real property as high risk, and select out individual currencies that shouldn't be held, ignoring the fact that multiple inversely correlated currencies are being held.
They then go on to list all sorts of individual stocks that should be sold, including Amazon, while also saying the should just invest in particular managed funds that would absolutely include stocks like Amazon. And it really shows they don't know or don't care about what they are talking about.
Because UM can't buy or sell individual stocks without bringing their whole investment management back in house. Do you really want universities, and state pension funds, etc, to all be managed in house? That they should carefully construct their own basket of equities and non-securities, measure risk correlations, monitor fluctuations, etc? Is that really what we want? Universities to hire a team of 20-30 financier's?
And if they just invest in passive US stock funds, they will still be owning shares in companies this group wants divested.
And the reason these large funds buy little slices of almost everything, is because they are trying to protect the principal of the investment. Again, these are the same asset classes as retirement, and used to fund positions. People still need to withdraw retirement if the S&P has a down year. Or any one country or class of assets underperforms. So you look at the historical data, see what tends to go up when other things go down, and you include both sets in your portfolio to hedge.
None of what I can see here is abnormal, or even really directly or disproportionally investing in the genocide.
In that chart, they are pretty close to the S&P 500, though they don't do quite as well. They also managed to avoid losing money in 2022 by doing a bit better than the S&P 500. That's approximately what's supposed to happen when they don't take quite as much risk - lower returns during good times, but lower losses in a bad year.
But this doesn't match what the endowment fund is actually doing according to the their financial report. They're heavily invested in venture capital and private equity. It's something that an endowment fund can do because they're investing long-term. Yes, investing in tech startups is risky, but they make up for it by putting money into a lot of different startups, and a few pay off.
I think the most interesting chart is "Fiscal Year 2023 Performance by Asset Class" which shows that their marketable equities did really well that year, and meanwhile, the illiquid investments like venture capital, private equities, and real estate didn't earn much. But maybe it's just a bad year for those investments? I'd want to see a chart that goes back a few years. But all in all, I don't think we're missing out on much by not investing like the pros?
Also, cash and fixed income earn miserable returns, even less than the 5% that I'd expect with current interest rates. (You ask why they don't have more fixed-income investments, well, that's why.)
The Tahrir Coalition is making the argument that the university is investing in Israel indirectly via the tech industry - that by investing in tech, they support Israel. While it's true that there are connections and it seems they went through some trouble to trace them, I'm not sure I see it. It seems like the tech industry's profits are mostly from other sources?
This might explain why the university isn't so keen on divestment? The tech industry is the most profitable part of the economy, so ruling that out would make it hard to get good returns. The top firms in the S&P 500 are tech firms. Also, it seems unlikely that VC funds would be willing to adopt a "divest from Israel" policy. Someone would have to set up a new VC fund.
Also, illiquid investments are hard to get out of. For example, VC funds generally require a 7-10 commitment. The University could adopt a policy regarding new investments, but it would take years for their investments to shift. Meanwhile, the students will have graduated, and who knows what will happen in Gaza by then? Changing policy on illiquid investments hardly seems like a short-term strategy for having an impact in Gaza, though in the long run, who knows?
Marketable securities are different - they could sell those any time.
You can see directly how they invest in venture capital firms that then also invest in deeply evil companies like Anduril. If even a fraction of the university's money is ultimately going to find drone software to more efficiently mass-slaughter Palestinians that's too much. I really don't find the creative accounting as a way to distance the endowment from the results of its investments all that believable as a shield. If I invest in 8VC and then I see that 8VC funded Edgybees, the company that makes software to identify targets to bomb, it is logical for me to feel like my money is being used to slaughter. Why is this different for a university's endowment?
I was thinking more about the case of investing in large companies where there is a subdivision that does something war-related. The connection is more indirect there, since your money doesn’t go to the company. It goes to another investor.
VC funds give money to startups that they spend, so that’s different.
The university's previous response about divestment:
Divestment
Very interesting article. From my time as a student government rep, I have two thoughts
about half of what I did was listen to the university give presentations to us. I think student government is a bit of a farce which the university uses to add legitimacy (see we’re engaging students!). So in that sense, it’s effective protest
the <20% turnout was true in our case too, probably worse. So I really considered it my duty to represent all students. When I first read the headline I thought “kind of like a self immolation protest”, but the reality is they’re disproportionately hurting students who didn’t participate in the political process and leaving themselves unscathed (a familiar note for what’s going on in Gaza)
I have no specific knowledge of Israeli investing or how universities manage their investments, but on general principle, it’s hard to see how divestment could make a difference in Gaza. It means selling investments to other investors, but the companies involved aren’t much affected. (When you buy a company’s stock, it has no idea who you are, and they don’t care if you sell. A large investor might get a seat on the board.) Possibly, there is some short-term effect on prices? Maybe the new investors get a deal?
A bit of context: looks like the main Israeli stock index (TA-125) dropped significantly after October 7, but has since recovered.
I’m wondering how hard it would be to do. It seems like it would be pretty easy. They probably don’t have a lot of Israeli investments? The main difficulty would be keeping track of what’s not okay to buy.
So why don’t they just go along with it? Perhaps they don’t want students pushing them around as a matter of policy. Or perhaps it’s because “companies that profit from Israel” is vague and might be a pretty broad prohibition?
IMO I think it has more to do with students wanting to do something, and this is a thing they think they can actually directly affect. I don't know the details of what the students still want, but the official statement from the board of regents seems fairly reasonable: https://publicaffairs.vpcomm.umich.edu/key-issues/divestment/
Pertinent bit:
Disclaimer: I'm not advancing these as my concerns, but concerns I've heard articulated.
Some of it is logistics, some of it is avoiding precedent. Most large endowments are managed by financial firms, not directly by the university, much the same way many 401k's are managed as part of a fund and not individual stocks or sectors selected by the individual. So many universities would have to change how they manage their endowments or even who they contract with to do so.
There's also a question of precedent and slippery slope. So you divest in specific companies, but do you also divest from that entire supply chain? Companies don't compete; supply chains do. So there's this risk that you find a compromise, it likely does nothing to actually help the situation, the protestors want more done, because that is the nature of movements and issue driven people, etc. It's a question of is there any one discrete set of steps that are in a reasonable middle ground that would actually mollify protestors so they wouldn't come back for more, that also doesn't make your university completely ideologically aligned with a cause.
Divestment was a push during the apartheid protests against South Africa. Whether it was ultimately successful or not is hard to say - did the protests on campuses cause societal opinion change or just reflect that change? Did the sanctions eventually imposed do anything?
But divestment did make students, particularly Black students protesting, feel as if they were successfully stopping even passive support for an evil system.
That said, some states have their public university investments in a statewide sort of locked down investment plan, mostly to prevent corruption afaik. More info in the past thread I posted about this last spring. But students aren't just looking to divest from Israeli companies, but from companies doing some amount of business in Israel - particularly selling heavy machinery (bulldozers) or military equipment/weapons but sometimes expanding out from there.