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Letters

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Money managers' pay, Israeli settlers, pranks

May-June 2004

THE POWER OF EXERCISE

"The Deadliest Sin," by Jonathan Shaw (March-April, page 36), is the first article that I have seen to discuss all the different research which ties exercise (from walking to resistance training to distance running) to improved health, well-being, and weight loss. I recommend it to the many legislators, insurers, family doctors, corporate executives, and policymakers who are grappling with the obesity epidemic in America. Thanks for giving us the statistics on how sedentary Americans are and making case after case for increasing physical activity—inspiring me, and no doubt others, to go the extra mile.

Alexa Willson '79
New York City

 

Shaw wrote that with exercise, generally, the more the better. He was addressing an audience of mostly sedentary folks and minimal exercisers, but as a lifelong exerciser and an "elite" athlete, I have experienced the dark side of too much exercise through overtraining/racing as a marathoner (2:44 at Boston with a best time of 2:38) and more recently as a top-ranked masters cyclist at the national and world level (at age 56, cranking a 40K time trial in 53:58, or about 28 mph), which has resulted in certain depressed hormone levels, among other physiological aberrations.

Lance Armstrong has been quoted as saying that he realizes he is shortening his life by virtue of the demands placed upon his system as an elite cyclist. Scott Tinley, the multiple Hawaiian Iron Man triathlete champion, recently wrote of his utter shock at discovering after a physical that, instead of underscoring his belief that exercise at his level is a guaranteed elixir against aging and certain diseases, several physical abnormalities of concern were manifest to his physician and him. In other words, more is not necessarily better: There is a healthy balance. And that balance would include systematic checkups with a knowledgeable physician, preferably an exerciser.

As to longevity, vigorous exercise does contribute to expanding mean lifespan, but no study has demonstrated that exercise increases maximum lifespan. Most recent research reveals that calorie-restricted, sedentary animals live longer than their calorie-restricted, exercising counterparts, presumably due to less oxidation or free-radical generation. How would Shaw address such a seeming conundrum?

Turner Howard
Knoxville, Tenn.

Jonathan Shaw replies: Even if competitive ultra-endurance events were to be proven unhealthy, the important public-health message about the benefits of exercise remains true for the overwhelming majority of us, even among daily aerobic exercisers. In the course of researching the article, I spoke about elite athletes with Edward Giovannucci, associate professor of medicine. There aren't any good epidemiological data on disease endpoints or all-cause mortality in professional athletes, he says, for a number of reasons. No one has tried to track such people—and they are relatively few in number. But even if a study were done, the lifestyles of elite athletes are so different from an ordinary person's lifestyle (and from each other) that isolating the effect of exercise alone would be a challenge. For example, a successful, highly paid player on a professional team may be more likely to use drugs (either recreationally or as ergogenic aids to performance) than an ordinary exerciser, and that may have effects on health that outweigh any benefits of exercise.

Or consider what happens when endurance athletes like Lance Armstrong and Scott Tinley compete. Both men have almost no body fat. Armstrong has written that he drops a significant amount of weight prior to the Tour de France. (His dietary preferences also change during intense training: he eats pasta for breakfast and brings lunch with him on his bike to eat while riding.) The body burns stored glycogen and fat preferentially, but in situations of severe energy deficit, the body will burn its own tissues, including muscle and even vital organs. Athletes like Armstrong and Tinley doubtless have impressive muscle and liver glycogen stores, but that is matched by an impressive ability to deplete those stores in supreme efforts that carry them well beyond the extreme fatigue that stops most people after the equivalent of about two and a half to three hours of running, long before they actually run out of glycogen.

As for caloric restriction, anyone who is overweight will improve his or her health by losing weight. But the caloric restriction of the mice studies (reducing energy intake in healthy-weight animals) is not yet proven to increase longevity in humans. It might require appetite-suppressing drugs in order to ensure lifelong adherence, as well as careful attention to nutrition in order to provide all the essentials of a healthy diet. Exercising and eating well—though they may not increase maximum lifespan—are simple ways to maximize any one individual's lifespan, and that is enough for most people.

 

MONEY MANAGERS' PAY

The "Extraordinary Bonuses" (March-April, page 69) paid to Harvard Management Company investment professionals are clearly legal, but hardly appropriate. The HMC money managers may be extremely skilled, but their performance depends upon so many factors beyond their own endeavors that the compensation formula is basically flawed.

I call upon the money managers to establish a fund, to be administered by a select board of trustees, into which all of their "extraordinary bonuses" would be placed (but not their ordinary salaries). This fund would provide "extraordinary" scholarship aid to Harvard's financially struggling students. The money managers would be hailed as benefactors, and every student, not to mention the students' parents, would be grateful to them. Instead of outlandish financial rewards they would receive community praise and immense personal satisfaction. What more could anyone ask from this life?

Richard S. Greeley '49
St. Davids, Pa.

 

Boards of directors and shareholders often feel uneasy and frustrated when it looks like their investment managers are getting gigantically rich while investment capital grows at a relatively pedestrian pace (Harvard endowment up about 11 percent this year). Worse still, as we experienced in 2000 and 2001, what are we supposed to do when our investment manager comes to us with a smile on his face and says that the market lost 20 percent but he lost only 10 percent and is therefore entitled to what looks like a huge bonus?

A big part of the frustration comes from a very widespread error in the investment business: we are measuring the endowment's growth against the wrong benchmarks. At present, it appears that HMC's managers are paid for outperforming two different indices: their market sector's rate of return (did I make more money than the average bond investor?) and the "reference portfolio" (did I make more money than Yale?). While it is psychologically satisfying to do better than the average investor, and very satisfying to do better than Yale, those indices do not measure the actual goals that the endowment is trying to meet, such as to build the Allston campus, renovate the Hasty Pudding, and send coaches on yet more varsity-athlete recruiting trips. The amount of income that the endowment needs to produce is not connected to the bond market, and should not be measured against the bond market.

What is the University's actual "cost of capital?" The endowment has to cover two expenses: inflation, and the future stream of increasing annual cash payments that contribute to University operations. To meet those expenses, it has two revenue sources: investment returns, and the giving by open-handed readers of this magazine. Once we estimate the rates of inflation, growth in payments to the University, and future giving (for all of which there are excellent historical data to study), it will be easy to settle on an absolute rate of return—the fourth variable—which the endowment must meet in order to be called a success, and which should be used to calculate HMC's bonus.

In general, investment managers don't like being held to an "absolute-rate-of-return" target because it increases the volatility of their own earnings while decreasing the volatility of their clients' earnings. With an absolute target, they not only have to figure out how to be smarter than the next guy in the bond market, they have to decide whether to be in the bond market at all. In my slight career, I've fired some of the most prestigious investment management firms in the world for being unwilling or unable to adapt to this.

I sense that HMC are tough enough to take it. In their defense, one can say that it is extremely hard to make a good return on a giant amount of money. One can also say, however, that as managers of Harvard's endowment, they are one of the most prestigious clients in the world and should be able to hear of all of the best investment ideas first. But most crucially, if we, the University's "shareholders," actually knew how well their performance is supporting (or failing to support) the University's mission, we might not worry so much about how they get paid.

Richard Bushman '80
London

 

You not only delivered a great cover story on exercise but also gave us something to get exercised about, HMC bonuses. How can Harvard continue to dither over whether and how it should tweak a bonus system that is calibrated in another world? Toss managers Mittleman and Samuels their $69 million in cash and put them on the mats for a free-for-all with Harvard's scholarship applicants. Then scrap the bonus system. Two good and healthy exercises.

Richard S. Gray, M.B.A. '55
Shaker Heights, Ohio

 

RESETTLING THE SETTLERS

It is unsurprising that Professor Robert Mnookin counts the number of settlers as many Israelis do—225,000—ignoring the 200,000 settlers living in occupied ("annexed") Jerusalem ("Peacemakers," by Christopher Reed, March-April, page 52). There is another view, of course, namely that all of the 425,000 settlers (about 10 percent of Israel's population) are present in occupied territory illegally (at international law) and that all of them should be removed as a matter of law. Sadly for those who take this view, Israel's and the United States' imperious brushing aside of the law of occupation has long been accepted by the international community as effectively preventing any enforcement of the law.

Peter Belmont, A.M. '61
Brooklyn, N.Y.

 

Mnookin's initiative speaks volumes about where his biases lie. Why does resolution of this "conflict" require resettlement of Israeli settlers? Why does resolution require a two-state solution? And why not consider transfer of the Palestinian population as a possible solution?

Howard Mischel, M.C.P. '76
Teaneck, N.J.

 

I wish Mnookin well in his efforts to help bring peace to the Mid-East. There's certainly a need for alternative dispute resolution. But why does he focus so much on Israeli settlements? Most Israelis already support territorial concessions and the removal of settlements for peace. Settlements aren't the problem.

While it's not always popular to say, the truth today is that the primary obstacles to peace include Palestinian rejectionism, Islamic anti-Semitism, and European anti-Americanism. These forces are pervasive and unpleasant, and too often ignored by western academics.

Eric Blumsack, J.D. '90
Cambridge

 

RELATIONS WITH EUROPE

Steven Walt writes an incisive piece on translatlantic relations ("The Imbalance of Power," March-April, page 32). One aspect, however, is overlooked. Prior to 9/11, both the United States' and Europe's main priority in the Middle East was a steady supply of oil, and the internal politics of the Arab world were of no concern so long as the oil flowed steadily. Thus, we bought oil from Saddam Hussein, corrupt Saudi sheikhs, and, in the past, from Mu'ammar al-Qadhafi. After 9/11, the United States learned that the politics of the Arab world directly impacted its national security in matters other than oil. Europe still has not learned this. Thus, any American move that threatens the status quo in the Middle East is viewed with disfavor and alarm by Europeans.

No conflict maintains the status quo in the Middle East more than the Israeli-Palestinian one. It may be viewed by Europeans and Arab governments somewhat akin to a nuclear reactor. Low-level conflict, like low-level fission, is useful. If the conflict can be kept at a low level, it maintains the status quo for Arab governments by allowing a useful outlet for angry young Arab men. It also serves the European Union as a useful counterweight to the United States.

Egypt, the most populous country in the Arab world, is the second largest recipient of foreign aid from the United States. A significant amount of aid is spent upon a large-scale rearmament, for potential use against Israel. Meanwhile, unemployment levels in Egypt are at record highs, as is anti-American sentiment. When the aged Mubarak passes from the scene, the time may be ripe for war against Israel, as a way of defusing domestic tensions. Egypt currently maintains low-level conflict with Israel by allowing smuggling of weapons across the Sinai-Gaza border to supplement the efforts of Hamas. Similarly, Iran uses conflict-by-proxy and pursuit of weapons-grade uranium as methods of distracting the increasingly restive Iranian youth. The European Union has continued to fund the Palestinian Authority, even with the knowledge that these funds are flowing to known terrorist groups.

The recent bombing in Spain may bring home the point that terror is a double-edged sword and that the status quo in the Arab world is undesirable for Arabs and Europeans, as well as the United States.

Jack L. Arbiser, M.D., Ph.D. '91
Atlanta

 

OCEAN THERMAL ENERGY

In regard to Craig Lambert's interesting "The Hydrogen-Powered Future" (January-February, page 30), I note that in the 1970s after the gasoline crises, the Johns Hopkins Applied Physics Laboratory developed a solution to our energy problems. They proposed building floating ocean-thermal-energy plants that used the temperature differential between the top and lower layers of the ocean to generate electricity. This, in turn, was used to produce liquid ammonia, which, when shipped to a shore-based terminal, could be burned to produce electricity. The end cost to the user would be in the five cents per kilowatt-hour range. The result of this burning was pure water and nitrogen. A pilot plant was built at the University of Hawaii with Department of Energy support. Then the Reagan years began and all such research was halted. As a result, 30 years later we have not developed a cost-effective alternative to using oil. Our problem is that we need a political system that is not substantially funded by the oil, gas, and nuclear industries, not some technical breakthrough.

Christopher Avery '62
Washington, D.C.

 

THE LEARNING GAP

Professor Jennifer Hochschild's review of No Excuses: Closing the Racial Gap in Learning, by Abigail and Stephen Thernstrom (March-April, page 23), rightly acknowledges the Thernstroms' important contribution to education by documenting facts about disparities in learning among various groups in our society. I agree also with her criticism of their solution, because, as she says, "Our nation cannot rely on solving the problems of public education by retreating from the public arena."

I am disappointed, however, in the failure of the review to address, or even notice, what seems to be the authors' main agenda and final solution: break the teachers' unions. Their praise of charter schools and much of their criticism of public schools comes down to this proposal: let administrators rule, suppress organized teacher input, and all may yet be well.

Whatever manifest evils are visiting the schools now come, I think, mostly from wrong-headed school-of-education ideas and perhaps from changed public attitudes toward children and their learning. Teachers' unions are not the problem. In fact, if their opposition to widespread high-stakes testing has frustrated the likes of the U.S. secretary of education, they may be the heroes in a lost cause.

Conrad Geller '55
Mount Kisco, N.Y.

 

PROTECT THE "LIBERAL"

As an alumnus of the College and a university-level educator, I applaud dean of the College Benedict Gross and his team of reviewers for their efforts to revamp the undergraduate curriculum ("Rethinking College," March-April, page 62). A thorough assessment of the College's curricular policies and praxes will undoubtedly lead to significant changes in how the youngest members of the Harvard community prepare themselves for leadership roles. I am particularly relieved to learn that internationalization is among the four "broad themes" outlined by William Kirby, dean of the Faculty of Arts and Sciences (FAS). To be a true global citizen, successful twenty-first-century leaders must be afforded educational experiences that extend beyond the often cursory awareness of American-style "multiculturalism" that has pervaded so much of late-twentieth-century pedagogical philosophizing.

That said, I am concerned about the fourth theme: "greater undergraduate access to the professional schools." As one who benefited from such access (having taken graduate classes in both FAS and the School of Education), I realize how important it is for motivated undergraduates to stretch themselves intellectually by learning alongside graduate students. Yet I would be dismayed to learn that such access would come at the expense of the heart of the Harvard undergraduate experience: a genuine liberal education. Part of what makes a Harvard-educated person a Harvard-educated person is the capacity (or at least willingness) to engage in a wide array of conversations beyond his or her area of specialization. Physicians who can convincingly argue politics, musicians who read about physics in their spare time, actuaries who understand and appreciate Asian art, and literary critics who can delight in a lecture about astronomy—these are men and women of Harvard from any century.

David J. Silva '86
Dallas

 

THE PRANKS OF YESTERYEAR

I was amused to see, in Lee Hudson Teslik's "The Prankster's Secret" (March-April, page 77), that the rip-up-the-pavement prank is now being attributed to Conan O'Brien. At least as long ago as the 1960s, the tale of the same escapade was in circulation as the work of the late, illustrious George Plimpton. It was supposed to have taken place in New York City, but did not include the nice business of the two contending police forces, which is apparently embellishment to what is perhaps an urban legend. Perhaps in the next version, the story will move back to New York and the jackhammer wielders will fall into a storm drain and meet one of the alligators.

J.D. Shuchter '56
State College, Pa.

 

In 1941 "SnooperMan" got a lot of ink in the Crimson. When the Lowell House master annoyed one of the inmates, this Harvard senior decided to give his annoyance tangible expression. He enlisted Minnesota colleagues, all juniors. Although the House libraries were closely guarded, this Lowell Houseman and his colleagues entered the Lowell library, easily, and turned all of the books back to front. This generated a small article in the Crimson (and later a smaller article in Time), which included a challenge.

The challenge accepted, he turned the Adams House library, particularly challenging because entry and egress could only be effected through a skylight. The next day the front page of the Crimson was entirely black, except for the caption: "Exclusive photograph of SnooperMan, entering the Adams House library!" SnooperMan had acquired his name.

The Kirkland House library was a piece of cake, but the Eliot House library was more formidable. When the Eliot librarian, George Grindle '42, noticed that a second-story window appeared to have been tampered with, he left a friend, briefly, to watch the library. He notified Yard police, who spent the night in the library. Undismayed, SnooperMan that night turned the Winthrop House library.

Having made his point, SnooperMan retired his (black) jersey, and focused his attention on final exams. Needless to say, he passed with highest honors.

Joseph Passonneau '42
Washington, D.C.

 

A bogus edition of the Crimson was perpetrated (by the Lampoon?) at a time in 1933 when the announcement of a successor to President A. Lawrence Lowell was expected. "Clarke" was a fictitious individual. The photograph was finally found to be of a janitor or some other identifiable person. The only real hint of something amiss was the weather forecast at the bottom of page 1: "Forecast for Cambridge: Storm brewing." This paper was outside my door in Lowell House, where a genuine Crimson would be delivered if it had not been a holiday.

Harry M. Hoffheimer '34
Cincinnati

In 1939 a bogus edition of the Crimson announced the resignation of James B. Conant as president of Harvard and reported that he would be succeeded by Robert Maynard Hutchins, president of the University of Chicago and a Yale alumnus. The issue was the work of the Yale Record, of which I was managing editor. Chairman John C. Nemiah and Henry Ford II of our business staff played prominent roles as well. Several days after the paper was published, President Hutchins set the record straight. He wrote me that he would be president of both the University of Chicago and Harvard.

Cecil A. Alexander (B.A. Yale '40), M.Arch. '47
Atlanta

 

I read the following by Teslik with some nostalgia: "Spyder has yet to attain Harvard's ultimate peak—Memorial Hall tower—but it seems other students have. According to one undergraduate...: 'Full breach of Mem tower? Pick some locks, pop some hatches, and you're up. The views are more sumptuous than roast pork.'"

I suggest you ask friends of the Harvard Mountaineering Club from the 1960s how it was done regularly, without going inside the building. Of course I do not recommend it, for safety reasons, since the mortar occasionally crumbled.

I am reminded by Peter Carman '64, now living in Wilson, Wyoming, that even the Harvard police in those days knew whom to ask for help in taking down the pumpkins that appeared on the gargoyles at Thanksgiving.

Roy Smith '64
Decatur, Ga.

 

Teslik missed this one: In the spring of 1964, the Lampoon discovers that heartless vandals have sawed their rooftop ibis off at the foot. It's gone! Since the Lampoon building was formidably steep, the masters of 'Poondom decide that only the Harvard Mountaineering Club (of which I was then the president) could have scaled their building, chopped off the bird, and gotten away in the night. A week later, decoyed by a fake "emergency telegram," I race down the alley behind Lowell House and a fishing net descends on me, followed by five 'Poonies. They draw the net tight, throw me into the back of a car, drive me to New Hampshire, and hold me for ransom for their bird. When it dawns on them the next day that (1) I am not going to talk and (2) they may be breaking more than Harvard's laws, they return me to Cambridge. The next week the Mountaineering Club exacts its revenge—the Lampoon president finds himself at 3 in the morning without his trousers in a Boston suburb a long, long way from Cambridge. The damned irony is that 30 years later, I am the director of a nonprofit applying for a grant from the MacArthur Foundation. Guess who the program director is assigned to my proposal? Yep, the self-same Lampoon president I forced to take a drafty walk so many years before. No, I did not get the grant. Yes, that stupid ibis got returned (by whoever stole it) just before graduation in '64.

John Graham '64
Langley, Wash.

.

Teslik's telling of the gift of the Lampoon ibis to the new Moscow University needs a bit of editing. The Lampoon kidnapped only me, not me and George S. Abrams '54. They offered an exchange for the bird, which some of the Crimeds considered a bad deal. After all, it was much harder to get the ibis than an easily replaceable Crimson president. Grudgingly, the Crimson agreed to swap. Two cars, one with me and one with the ibis, drew up on a deserted Cambridge street, but when the 'Poonies handed me over, David Halberstam '55 pushed them aside and grabbed me into the Crimson car. Abrams and John Loengard '55 joined me in the trip to New York City. We first went to the Stork Club, but the 'Poonies had already been there; we realized we'd have to avoid obvious places to take a bird, like the Bronx Zoo. As we pondered our next move in Loengard's apartment on a Saturday, one of us leafed through Life magazine, which had a picture of the new university with its prominent spires. Suddenly, it all came together. The only American buried in the Kremlin is John Reed '10, a former Lampoon editor and author of Ten Days That Shook the World. We would give the Russians the bird in his honor. We sent their UN delegation a telegram announcing that we'd make the presentation Monday.

When we returned to Cambridge, we were concerned that we might have sparked an international crisis. One of the editors who knew John Foster Dulles, then secretary of state, called him, and we were all relieved when Dulles burst out laughing after hearing the story. The only downer was that the Lampoon had no sense of humor.

Michael Maccoby '54, Ph.D. '60
Washington, D.C.

 

DEFICIT DANGERS

With great interest, I read Benjamin Friedman's "The Deficit Danger" (January-February, page 25). If memory serves me, he has changed his opinion on federal deficits. When I took his (outstanding) undergraduate course in monetary and fiscal theory in 1980, I was very concerned about deficits "crowding out" private investment. ["Crowding out" means that the borrowing done by the government to finance its deficit reduces private investment in plant and equipment, by using up saving that is then not available to finance such investment. —Ed.] As I recall, he was not. It would be useful if he would clarify. Has he indeed changed his opinion on "crowding out" and, if so, why?

Mark Kolakowski '81
Fair Haven, N.J.

 

Benjamin Friedman replies: The question usefully highlights an important distinction. When a deficit occurs because weak economic activity depresses the government's revenues (people aren't taxed on income they don't earn) and raises expenditures (more people are unemployed, or poor, and therefore receive more benefits), it not only doesn't crowd out private investment, it more likely "crowds in" investment. In a recession, the available saving is more than adequate to finance what firms and homeowners want to invest, and by stimulating additional business the deficit can stimulate people to want to invest more. By contrast, when the government runs a deficit simply because it spends more than it takes in, even though the economy is fully employed, the resulting government borrowing absorbs saving that is scarce, and therefore it does crowd out private investment.

In 1980, the federal budget was in deficit by $74 billion (equal to 2.6 percent of that year's national income). But the economy was in a recession then; according to the Congressional Budget Office, under the policies of the day but normal economic conditions the deficit would have been only $11 billion. The CBO now predicts a deficit of $477 billion (4.1 percent of national income), of which $424 billion represents the "standardized" deficit. Hence, the government today is not only running a larger deficit than in 1980, it is doing so for almost entirely different reasons.

Finally, what also makes today's deficit more likely to crowd out private investment (or increase what the United States borrows from abroad) is reduced saving. In the 10 years prior to 1980, the net saving done by American families and firms together amounted on average to 9.8 percent of United States national income. In the most recent 10 years the net private saving rate has averaged only 5.5 percent.

Kolakowsi is therefore right. I do regard the deficit differently today than in 1980. Everyone else should as well.

 

 

CORRECTION

The photograph of the Ainu sealskin coat in "Treasure" (March-April, page 100) was made by Hillel Burger of the Peabody Museum of Archaeology and Ethnology.

 

 

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