UVA To World: Trust In Me

UVA rector William H. Goodwin Jr. provides a rather uncompelling and perhaps damaging defense of the UVA Slush Fund, courtesy of the Roanoke Times (who again has been doing yeoman’s work covering this scandal):

The possibilities are endless. They might include specialized equipment or research labs, recruitment of the finest faculty talent, or initiatives that enhance student life. They could include seed money for endowed student scholarships; support programs to further improve access and affordability for Virginians, and more.

This is no blank check. Investments will be for limited periods. They’ll be tracked and evaluated.

And to dispel another catchy but inaccurate phrase used by a former Board colleague, these investments won’t be administrative or Board “pet projects.” Such a characterization conveniently ignores a rigorous, multi-stage process that accepts proposals from across the University community and subjects them to a faculty committee review, an assessment by a leadership committee and final approval by the Board.

Pet projects don’t survive that level of scrutiny.

Now smarter folks will see two patterns in this argument: (1) a refocus on the “possibilities” that the UVA Slush Fund could be used for good, and (2) the repetition of internal checks and balances: words such as “no blank check” and “tracked and evaluated” and “rigorous, multi-stage process” and “faculty committee review” — etc.

All code for internal.  All code for the very pet projects Dragas questioned.

…and yet remember how this slush fund was aggregated.  It is an operations fund, fueled by the Virginia taxpayer, designed for operations — not a process pre-determined by the internal predilections of the UVA Board of Trustees Visitors to produce specific outcomes as if it were the National Institutes of Health (NIH) or National Science Foundation (NSF), agencies of the federal government plagued with waste, fraud, and abused despite the existence of a “rigorous, multi-stage process” — all peer reviewed, all designed to incestuously perpetuate the existence of aforementioned peers.  Pet projects do indeed survive internal scrutiny.

At this point, there really doesn’t seem to be much conversation about whether or not the Slush Fund was improperly aggregated — it was.

The case that the University of Virginia leadership now seems to putting to the Commonwealth of Virginia is “just trust us” — UVA will know better what to do with the slush fund than the mere plebeians at the Virginia State Capitol; the people’s representatives being an “important constituency” in the eyes of Charlottesville, but not important enough to question UVA’s spending habits and wealth aggregation techniques.

Here’s food for thought: should Richmond confiscate the UVA Slush Fund, here are some novel ideas that could be done with it:

• Build 10 STEM academies across Virginia and give them each an $80 million endowment ($1.6 bn).  You know what Martinville needs?  An $80 million dollar STEM Academy that will train Virginia’s students to become a part of a 21st century economy, building businesses and creating new jobs back home.  Each STEM Academy could be granted an $80 million endowment right out of the gate, ensuring that this radical new investment in self-sufficiency and workforce retraining is fueled for the new Virginia.  Need a comparison for how huge this would be?  James Madison University’s endowment?  $81.9 million.
• Create a Virginia Empowerment Scholarship Initiative that would allow every high school graduate with a 3.0 GPA to attend Virginia’s Community College System (VCCS) for free ($400mil). In Virginia, every child has the constitutional right to a quality education before graduating high school.  Those who show the promise but lack the means ought to have their tuition paid in full for two years — provided they maintain the grades.  Such a massive investment could survive off the dividends for the next 50 years.
• Create a Virginia Microfinance Network that would create or support existing regional MFIs and train Virginia’s workforce how to become entrepreneurs ($300mil).  It’s a known fact that if you go to a bank and get a small business loan, 1 in 3 businesses succeed.  Through microfinance institutions (MFIs), 2 in 3 succeed.  Existing or starting new businesses — perhaps from Virginia’s network of STEM Academies? — would band together an apply for loans through an MFI, paid back over a year.  These businesses would not only get low-interest loans that are simply unprofitable for banks, but they would be required to attend monthly meetings on how to become good entrepreneurs: how to write a business plan, how to apply for a loan, how to balance the books, why one should save six months operating expenses, etc.

This is all a good start, but it sure beats $50 million on yoga.

Moreover, the new economy that is coming around the corner is real: automation is coming, and the Virginia economy ought to be in the vanguard if we are to ride the wave rather than be caught in the undertow:

So which jobs are most vulnerable? In a widely noted study published in 2013, Carl Benedikt Frey and Michael Osborne examined the probability of computerisation for 702 occupations and found that 47% of workers in America had jobs at high risk of potential automation. In particular, they warned that most workers in transport and logistics (such as taxi and delivery drivers) and office support (such as receptionists and security guards) “are likely to be substituted by computer capital”, and that many workers in sales and services (such as cashiers, counter and rental clerks, telemarketers and accountants) also faced a high risk of computerisation. They concluded that “recent developments in machine learning will put a substantial share of employment, across a wide range of occupations, at risk in the near future.” Subsequent studies put the equivalent figure at 35% of the workforce for Britain (where more people work in creative fields less susceptible to automation) and 49% for Japan.

That’s the future, ladies and gentlemen.

We can spend it on yoga… or the Commonwealth of Virginia can spend it on the common wealth as it was intended to be spent.