In his speech Saturday to the freshman class, Yale College Dean Jonathan Holloway reflected on the clash between the imperialist and slave-driven “history we inherit” and the magnanimous “future we aspire to create.”
To be a Yalie is to be an engaged citizen — of the University and the world — so these are questions that we need to think through together: What should we do with the artifacts of a past that now offends us? Do we leave them in view to haunt us?
In order for Yale students to be engaged in the present, the first step is to stop pretending that the only history that haunts Yale is in the past.
Even though Yale hasn’t opened its books for public scrutiny, one can piece together that, through its capital and new investments, Yale continues to uphold the tradition of profiting from the exploitation of black communities. To a substantial extent, the recent success of Yale’s investment portfolio, and therefore Yale as an institution, grew from the same roots as the foreclosure crisis, a crisis which has disproportionately affected African Americans.
In the years leading up to the 2007–’08 foreclosure crisis, the Yale endowment received approximately a fifth of its revenue from direct or indirect ownership shares in land or from land speculation. It allocated as much investment to real estate as it could while still meeting its own criteria for a balanced portfolio. This meant that Yale had an interest in rising land prices, and therefore profited from the housing boom that inflated land prices in U.S. cities. One real estate firm that managed Yale’s money, the Shorenstein Company, has properties in Boston, New York, Washington, D.C., Atlanta, Houston, Chicago, Minneapolis, San Francisco, Seattle, Portland and L.A. — reflecting an investment in urban development across the U.S.
At the same time, Chief Investment Officer David Swensen also bet against the mortgage market, which is, in a sense, a bet on the bubble bursting, on a foreclosure crisis, on a devaluation of home values and on vacant houses. Skeptical that real estate prices could rise indefinitely, Swenson asked an outside manager to make “what Swensen calls a ‘supersize’ bet against subprime-mortgage-backed securities, which paid off when the real estate market collapsed,” as a 2009 article in the Upstart Business Journal put it. Or, in the more official terminology of the 2013 Endowment Report, “Yale’s active outperformance is due to successful exploitation of market inefficiencies and timely pursuit of contrarian investment strategies,” which allowed for that 7.2 percent annualized return during an especially rocky decade in the real estate market. This is significant because it means that Swensen continued to seek profits from the growing speculation on urban and suburban land prices, while still realizing that such speculation would not last and would likely end in a bursting bubble and massive waves of foreclosures.
Through Swensen’s investments, Yale had a speculative interest in increasing land value, a speculative interest in plummeting housing prices and a wall of cash to protect itself from the foreseeable consequences of that speculation: mass foreclosures, evictions and displacement.
Furthermore, thanks to this absentee-owner land speculation, Yale could also speculate on local land and encourage gentrification in New Haven. Yale did this indirectly through investment in the Yale campus, and directly through off-campus investment policies.
Despite Holloway’s plea for civic engagement, Yale’s corporate goals are specifically undermining the critical reflection he is encouraging. In a report released in 2011, the Graduate Employees and Students Organization wrote that Yale has “a corporate model that prioritizes arbitrary benchmarks and ‘results,’ and sets constraining limits on the type of research that can be performed.” As a result of this corporate model, Stephanie Greenlea, former co-chair of GESO, described how relatively newer departments like African-American Studies and Women’s, Gender and Sexuality Studies which “have not amassed the sort of alumni donation pool, or endowment, or extra resources,” are under threat of increased cuts, as opposed to more traditional departments like political science and economics. Yale’s budgeting threatens to force out some of those academic disciplines that would be able to critically analyze a foreclosure crisis that has overwhelmingly affected African-Americans and women.
As a university, each of Yale’s buildings can only honor the name of one racist oppressor at a time; but as an investment corporation, Yale has helped raise the banner of “foreclosed” across millions of homes in urban communities in New Haven and throughout the U.S., carrying on a legacy of landlessness and racist appropriation. Holloway portrays this as Yale’s ancient history when, in fact, the haunting artifacts of Yale’s past offenses have barely gathered dust. What do you call a person haunted by the living? Hanna-Barbera called them Scooby Doo. Marx called them the bourgeoisie. Holloway calls them a Yalie.
Simon Swartzman is a 2010 graduate of Ezra Stiles College and an anti-foreclosure advocate based in Chicago. Contact him at simon.swartzman@gmail.com .