AMY GOODMAN: Bob Samuels, just explain the situation right now. Why are these student hikes? What's the justification for the 32 percent increase in student fees?
BOB SAMUELS: Well, President Yudof, the president of the University of California system, says that because of state cut to the UC budget from 20 percent of the state contribution, which is-the state only contributes about-contributes only about 15 percent of the total budget, but because of that cut, they say they have to raise student fees. And our argument has been that this is actually a record year of revenue for the UC system, and the problem is they just don't want to spend the money on instruction. So what they're doing instead-
AMY GOODMAN: How could it be a record year?
BOB SAMUELS: They brought in a lot of money from the federal stimulus money. They had a record year in their research grants. They had a record year in medical profits. Most of their money is brought in by selling parking, housing and medical services throughout California. So they had a record year in that revenue. They had a record year in grants. And so, actually, last year they ended up getting more money than before from the state, because they got the federal stimulus money.
AMY GOODMAN: And so, what is the justification then? Explain further where that money goes.
BOB SAMUELS: Well, you know, the university says that it's poor, that it can't spend money from its other areas on students, on instructions, and so it has to basically-what it's doing now is laying off hundreds of faculty members, especially the non-tenured lecturers, and it's increasing class size.
And money is being funneled into the compensation of the star faculty and the star administrators, because in the UC system there's over 3,000 people who make over $200,000. And many of them make $400,000, $500,000. A lot of them are mostly administrators and staff, and so the university has-basically has fewer and fewer faculty, more and more students and more and more administrators.
And so, what's going to happen is it takes students longer to graduate. They can't get the classes they need. And I teach required writing classes at UCLA, and they just laid off our entire department. And we have required classes, so we don't know what they're going to do. And the dean of our division told us the university simply does not have money for undergraduate education.
....
One of the stories I want to talk about is just that UC lost over $23 billion in investments in the last two years. And one reason why it lost so much money is that it invested heavily in toxic assets and in real estate. And it followed the Yale model of investing in these high-risk assets, and at first it gained a lot of money. And what's happening across the country are universities, especially the private universities, they're losing so much money in their endowments that they're having to raise, once again, their tuition and also cut classes, cut faculty, and especially the non-tenure track faculty are the most vulnerable. And at the UC system, the non-tenure track faculty teach over 50 percent of the classes, and those are the ones that they're laying off and that they're firing. And they're also basically reducing the salaries of the workers and also increasing their workload. At the same time, they're refusing to negotiate with the unions.
AMY GOODMAN: What is President Yudof's strategy?
BOB SAMUELS: I think his main strategy is basically to blame the state for everything, while they try to privatize the university. And a very telling moment came. After the UC's budget was cut by the state, the UC turned around and lent $200 million to the state. And people said, how can you lend $200 million to the state while you're giving faculty furloughs and while you're raising student fees and while you're cutting classes? And he said, "When we lend money to the state, we make a profit from interest. But when we spend money just on teachers' salaries, that money just disappears." So, from his perspective, instruction is a losing proposition, and the university should just try to get out of the business of basically teaching students and hiring faculty.
AMY GOODMAN: You've talked about a great deal of money being lost.
BOB SAMUELS: Right. Well, that money, the $23 billion, is mostly in the pension fund and its endowment and its short-term investments. And so, that's really a long-term problem. And the UC still has a $20 billion budget. It had more money brought into the system last year than any year before. It doesn't have to raise student fees. It doesn't have to fire faculty. It doesn't have to cut courses. They're talking about eliminating minors and majors. They're talking about moving classes online. They're doing these drastic things. And what we're seeing is just basically undergraduate students are subsidizing research, they're subsidizing administrators, they're subsidizing things that have nothing to do with undergraduate instruction.
AMY GOODMAN: Bob Samuels, the implications of what's happening here in California for the rest of the country?
BOB SAMUELS: Well, basically, what we're seeing, especially at the major prestigious universities, is more and more-only upper middle class, upper class students can go to them. And they're privatizing these institutions. And the institutions-what happened about 1980 was that states started to cut their funding of higher education, and so universities looked for other ways of making money, and so they concentrated on raising funds and doing research, and especially research funded by corporations and the federal government. And so, basically now at a lot of universities, instruction only represents about ten percent of the budget, and so it's a minor aspect of the universities.
And most people don't know that, that universities, in some ways, are just kind of fronts for investment banks and investments, because at the University of California, the regents, who are the main financial overseers of the university, are appointed by the governor for twelve-year terms. And most of the regents now are Republicans, who not only have voted against taxes and have not only tried to defund higher education-and they're the ones in charge in many ways-but they're also business people chosen by Republican governors. And those-and they are real estate people, they're investment bankers. The new head of the-the chair of the UC Regents is the former head of Wachovia, and he actually-they sold subprime student loans, right? And they profit from the student loans. And also, they pushed the UC into investing heavily into mortgage-backed securities and into real estate right when those were tanking.
And so, I really think that the Board of Regents basically is forcing the UC or motivating the UC to make a lot of incredibly bad investments, and when the investments turn bad, then they try to take it out on the students, on the faculty and the workers.
Free or nearly-free public higher education was one of the cornerstones of the New Deal Party System era. It set the benchmark that in turn also kept private higher education within reach for millions of Americans whose families could not have afforded it otherwise. During the post-New Deal era, this pattern has been reversed, with higher education reverting more and more to a position of privilege and gatekeeping, with high expenses that make it increasingly difficult for even the most well-meaning to put their educations to use for purposes directed at giving back to their communities.
This is another step in that long-term process which has been under way for at least three decades now, taken in classic "Shock Doctrine" fashion, without an open democratic process, despite the fact that a Democratic trifecta is in charge in Washington, DC, and despite the fact that Democrats control both branches of the state legislature in California. I'm not saying that Democrats could totally control the process. Anti-majoritarian provisions in the US Senate and the California constitutions stand in the way of that. But they could surely make this process a good deal more public, a good deal more transparent, and a good deal more difficult for the special interests to pull off---it that were their intention.
