Monday, March 02, 2009

The Chronicle’s “Recession Strategy” Story & Editorial

In a story headlined – “Brodhead presents recession strategy” - a Chronicle story today under editor-in-chief Chelsea Allison’s byline begins:

In "Message to the Duke Community," his second e-mail on financial matters in two months, President Richard Brodhead outlined Duke's response to the global economic turmoil.

Duke will be smaller, Brodhead noted, after changes are made to compensation, administrative costs, capital projects and hiring.

"We have entered a world very different from the one we have grown used to in recent years. In this new circumstance, Duke has no choice as to whether or not to reduce its expense base," the e-mail reads.

Duke faces a $125 million shortfall, necessitating budgetary tightening across the University. This year, total operating expenses increased by $136.7 million, to $1.96 billion.

The endowment is now valued at "just north of $4 billion," Executive Vice President Tallman Trask estimated in an interview Sunday, after sitting at $6.1 billion in June. Spending from the endowment constitutes about 15 to 16 percent of the operating budget-but all sources of revenue, from endowment payouts to philanthropic giving, have been depressed.

The shortfall figure essentially shrinks the budget, translating to a total close to that of 2004-2005, Trask said.

Officials hope to stretch the blow of the deficit across three years as they bridge the gap between revenues and costs.

"If we did it all in one year, it would be catastrophic," Trask said.

It is unclear when the economy will settle-but this strategy means the University will continue to feel ripple effects as the gap is closed.

Officials have hesitated in recent months to say that the recession would inhibit Duke's growth, but the University will be cutting back in a variety of ways: reducing expenses and fees, postponing projects and carrying a smaller workforce. …

"The bottom line is in three years out we've got to be down $125 million," he said.

As for taking on debt, Trask said the University will not employ this strategy.

"We're done," he said. …

The entire TC story’s here. President Brodhead's letter's here.

The Chronicle also editorialized: “The tough get going.”

As its title suggests, TC’s editorial is for the most part approving, even admiring, of what the university announced today. It doesn’t question anything President Brodhead said. Nor does it ask any serious questions about the financial management of the university in recent years.

The comment threads of both TC’s story and editorial make clear not everyone’s as unquestioning as TC or as willing to go along with what Brodhead, BOT chair Steel and VP Trask are now saying and doing.

Here are two examples from the editorial thread - - -

Roper @ 1:47 - - -

What possible justification can be made for the conclusion that, "In an unsurprising and prudent move, the University has decided to raise the cost of tuition by 3.9 percent for the next academic year".

It seems as though members of the Chronicle editorial board are either (a) so rich that they do not notice tuition increases, or (b) so completely on financial aid that they can ignore tuition increases.

In any event, it is always easy to approve of price increases that fall on another's shoulders.

It is ironic that your own Chronicle "online poll" shows that in-excess of 85% of the respondents believe that Duke students should receive a DECREASE in the cost of tuition, in recognition of the hardships now faced by many Duke families. Oh well... let them eat cake.

Willow Wind followed @ 1:50 - -

The 16% of respondents to the Chronicle poll disapproving of lower tuition for Duke students must be members of the Duke faculty and their spiritual cohorts, feeding at the University trough.


My Comments:

In both its news story and editorial today TC failed to mention the costs of the lawsuits resulting from the Steel/Brodhead team's inept and disgraceful actions and inactions in response to the lies of Crystal Mangum and Mike Nifong which gave rise to the attempt to frame three obviously innocent Duke students for gang rape and the ongoing cover-up of the frame attempt.

Sources tell me the suits have already cost Duke in the neighborhood of $50 million.

Where has the money to settle suits and defend Brodhead, Steele and the many other Duke defendants come from?

Where is it coming from now; and where will it come from going forward?

Many alums are disgusted with what the trustees, Brodhead, “Dick’s senior team,” and the faculty (all but a few excepted) did and didn’t do in Spring 2006.

Many alums say they’re particularly angry that university money is apparently now being spent to do nothing more than sustain the cover-up in order that Duke’s malefactors can avoid further exposure and any accountability.

TC’s silence concerning the costs of the suits no doubt helps the trustees, Brodhead, his “senior team,” and many of the faculty.

But it’s not helping Duke.


Anonymous said...

And then there's Durham's problem: with AIG going under (again), who's going to pay for Durham's part in the frame-up? Kinda warms my old Tarheel heartstrings to see this soap opera play out. I'll pop the popcorn.
Tarheel Hawkeye