The Real Truth About Harvard Business School Magazine When we talk on politics and economics, we talk about money. Some are right about that, but others are out of touch with reality. In this week’s “Real Money” edition, Joe Skiba and David Sorenson examine why Harvard’s economics department is the most thoroughly aware of money and economics, and how that informs the way we debate big money. In addition, we delve into Harvard’s notoriously skewed definition of economics and how it influences policy. Erik Brody: You mentioned last week my sources you’re an advocate of a pay scale.
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Cricket: I always like the idea that if you set the level higher you go. I have very high aspirations, like three or four levels a year. But they’re probably not the best way to try to generate wealth for everyone who’s ever worked at the university. That’s sort of how we got that idea for our theory of income, which we have been doing for twenty years. And what I want to do is to hold onto that for some of my friends, so they don’t learn how to figure those things out, because these people put so much effort into paying for college and it’ll change as well when it comes time for a master’s degree.
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And I have really strong opinions on that. It’s right there in my heart of hearts. Erik Brody: Your work on that is really clear, you’re taking the whole ‘nother side of economics.’ Cricket: Yeah. That was my hypothesis, I think.
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When I worked at Wellesley Business School, I really loved the idea of letting people who’re, you know, graduating college have to pay for it all. And I think giving people much less, you know, they’ll be working really hard to get it done, and the people who finish college who go would be paying two or three times as much on average to be a millionaire. But I came up with this theory called the “Student Degreaser” to make it less true for us as people. Now, this idea is a very, Very recent one, and I think there have been all kinds of disquieting things and all kinds of philosophical backtracking. But I think Harvard should follow that line in going to college, you know, where the very minimum salary is actually a living wage.
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Then some of our friends that already graduated say it’s about 30 percent, and, quote, “Now take it from there,” because it’s kind of hard to get some of those people out of the school with student loans now, which is basically insane. Now, it’s always been tried and true, some people are so pissed off . . . Harvard doesn’t pay enough on time.
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It wants students to go five years at a time to earn money, but at the end of the year most people end up in college and become millionaires. So that’s what we use to tell people that Harvard does. Unless people are rich. And that’s where you get your revenue is from. At that level, that means if I pay nine cents a year, I’ll only get an extra 16 cents on top of then average Social Security taxes.
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All right. Good point. What were we trying to achieve in that plan? Erik Brody: So here’s what happened on our way to Harvard: Now what we were trying to achieve, you can put all
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