Former British prime minister Tony Blair will deliver the 2009 Issam M. Fares Lecture at Tufts on Feb. 2 as part of a series that brings esteemed public figures to campus to discuss contemporary issues relating to the Middle East.
While not taking part in any official meets during the month-long winter recess, the men's track and field team participated in the Second Annual Alumni Invitational in the Gantcher Center on Saturday. An informal meet that divides the roster into two competing squads bolstered by returning alumni, the Invitational offered an opportunity for the current Jumbos to hone their indoor skills in preparation for their first meet of 2009, Saturday's Tufts Invitational I.
Dr. Ron Paul currently represents Texas' 14th District in the United States House of Representatives. Paul's influence on American politics, however, extends far beyond the borders of Texas; he ran for president in 1988 and 2008. Paul's campaigns were based around Republican ideals, but with a special emphasis on constitutionalist and libertarian values. In 2008, Paul was the only Republican candidate for president who opposed the Iraq War and other interventionist policies. Michael Bendetson: Out of the 535 voting members in the 111th United States Congress, only 16 are doctors. What inspired you to leave your lucrative medical practice to enter politics? Ron Paul: It was concern that the country itself was going in the wrong direction. The government was getting bigger, personal liberties were being undermined and the financial situation was quite bad. I [entered politics] more as a lark, just to speak out, and not with the expectation of winning a seat … The first time I ran and the first time I won was in 1976. Overall, I sought office to help fulfill my desire to shrink the size of government, enhance personal liberties and improve the economy. MB: In October of 2002, you were one of the six out of 223 Republican congressmen to vote against the Iraq War Resolution. Please elaborate about why you were so adamant in your dissent toward the bill six years ago and continue to oppose our involvement in Iraq today. RP: We went to war based on lies. Lies, bad intelligence and the interests of special interest groups were pushing our foreign policy. Also, [the Iraq War] had nothing to do with our national defense. Further, if the country goes to war, [Congress] needs to declare war. There were so many reasons: moral reasons, economic reasons, constitutional reasons and practical reasons. I thought it was a complete waste and a violation against everything America stands for. As a result, I strongly opposed going in and I think if you make that bad of a mistake, you ought to get out as soon as possible. MB: You are one of the few politicians in Washington who believes that Iran is not a serious threat toward the United States. Why do you reject the notion of Iran as a dangerous enemy? RP: [Iran] does propose some problem to the United States. They are a so-called "enemy," but it's a consequence of our policies toward them. So, they did not one day wake up and say, "Hey, we all hate Americans." Our foreign policy has consequences. It is very well-remembered by most Iranians that in 1953 we went over to Iran and our CIA secretly overthrew their democratically elected government. This makes a mockery of what we claim to be. We fight wars because we claim "to spread our goodness and democracy." However, at the same time, if a democratically elected leader does not please us, we do everything possible to remove him. If there is a military dictator that supports us, we praise him and give him money. The Iranians are acting logically and in their own best interest. Even in the literal sense, they do not pose a threat. They do not have a [nuclear] weapon and they are not likely to get one … This whole idea that we have to keep spending money, building up fear, sending troops over and putting blockades around a country, all it does is stir up trouble and creates more enemies for us. This foreign policy does not make any sense for us. I think the Iranian situation is a typical example of how these things backfire on us. MB: You have remained consistent in your disapproval of federal bailouts of both the financial institutions and auto industries. Why are you against federal intervention and what alternative solution would you propose? RP: First, there is no authority in our Constitution that [Congress] should use taxpayer money to go and bail out companies that have not done well. That alone should be enough to stop [the bailouts]. Second, it is morally wrong because you have to take money from somebody who may be productive and reward people who have [not] been productive. Third, the economics of [the bailout] are atrocious. Why should we subsidize mistakes? We have been doing that in the past. Our Federal Reserve System has created all the financial bubbles and now we are suffering the consequence as these financial bubbles collapse. Propping up the mistakes made during the boom phase of the cycle is exactly the wrong thing to do. It prevents the correction [of the economy] and delays the inevitable. In order to get back to economic growth, you have to liquidate the excessive debts and bad investments. The only way you can do that is to just get out of the way. You cannot buy up all the bad debt, but that is what we are doing. This is exactly what we did in the Great Depression. So we are working real hard in the U.S. Congress and with the Federal Reserve to recreate another Great Depression. It makes no sense, whatsoever … MB: The relationship that you have with the Republican Party has been strained over the recent months. During primary season, you were constantly in the minority combating the other major contenders on issues such as the [Iraq War]. In addition, you held "A Rally for the Republic" during the Republican [National] Convention. Do you still consider yourself to be a Republican, or rather a Libertarian? RP: I think you can be both. A small "l" libertarian is a strict constitutionalist. If you look at what the Constitution says and what the founders believed, they were very libertarian. Nobody has written a rule in the Republican Party that [says], "Those of you who believe in liberty and the Constitution should not be allowed in." We can be both libertarian and Republican. It is true whether it was the McCain leadership in the campaign or in the party itself; they were not exactly friendly [to libertarians]. However, at the same time, it [is] very clear that the grassroots still supported me. When it came to one-on-one at the lower level, [Republicans] were very anxious to support me. When it came to those in party leadership, they did not want to be challenged. MB: Over the course of your political career, you have acknowledged that global warming is a serious problem. You have supported the idea of "strict property rights" as a solution over government regulation. Why do you place more faith in the private sector than the public sector to solve this problem? RP: I do not trust the public sector to do anything right. Their record is extremely poor. Although there is evidence from some data that the Earth might be getting warmer, you have pretty reputable scientists on both sides of that argument. So to act on the absolute authority that man is the sole cause of the problem would be a mistake. I simply do not trust the government to deal with [the problem]. Once the government gets involved, they end up [doing] what they are doing right now. The [federal government] is selling permits to pollute. If a company comes along and has these [carbon dioxide] or pollutant promises that they can pay for, they can [buy land]. Under a property rights viewpoint, if you are truly polluting your neighbor's property, you have no right to do it and are stopped immediately. MB: …You have rejected the notion of universal health care based on a fear of socialized medicine. Instead you have [chosen] to promote a [series] of measures based on free market health care, such as tax credits for individuals. Why are you confident that [the] solution for this crisis is found in the private sector of society? RP: Socialized anything does not work. Socialized medicine has failed throughout history. It did not work in radical socialized systems such as in the Soviet Union. Today, you can see around the world that in areas where [medicine] is socialized, there are long lines. It may be cheap, so to speak, when you see the doctor, but there is often no doctor there and you have to wait months for routine surgeries. With a market-oriented system, things are far more efficient. It is not difficult for me to see from both a political and medical viewpoint which is best. The problem today is about half the money goes to the middleman: management companies, drug companies and insurance companies. This drains the money from the care of the patient and the doctor. As a result, the system becomes very expensive and the quality of care goes down … MB: Much has been made in this past election as to "The Ron Paul Revolution." Your recent book, "The Revolution: A Manifesto" (2008), was a major success, becoming [number one] on both the New York Times and [Amazon.com] best-seller lists. Also, despite a lack of media attention, you managed to raise more money than your fellow Republican opponents during the early primary season. What, in your opinion, does this "Ron Paul Revolution" entail, and why has it become so popular? RP: I think the American people are starved for an answer. I think there is still a love of liberty in this country. They were looking for somebody who would talk about [that love] clearly. I think what helped and gave our campaign a boost is that more and more people are starting to recognize the failure of our system. Even since the campaign ended, it has become so evident that the things we talked about have unfolded. Government really does not work. Those of us who have discovered this know we need less government. Unfortunately, the sentiment in Washington is so locked in that the problem is still not enough regulation. These people are still in charge of the government, but our revolution is going on. There is this tremendous amount of people, especially young people, who realize that they are inheriting not only this financial mess, but also the obligation to have troops around the world. They are not buying into the idea that government is the solution to our problems. MB: What recommendations can you provide for President-elect Barack Obama with regards to what issues to focus on during his initial months as president? RP: My advice to him would be very simple: Stick to your promises, especially with regards to foreign policy. He wants to bring the troops home and have a different foreign policy. However, right now, because of his appointees he has not done that. It is very hard for me to expect him to take much advice from me because we hold such different beliefs. On the important issues he should listen to the base. Hopefully, he will then listen to us, who talk about free markets rather than depending on central economic planning. Unfortunately, I am afraid he will be going in the wrong direction.
While economists on Walnut Hill debate the need for more regulation following the collapse of Bernard Madoff's alleged Ponzi scheme, the Bay State's representatives on Capitol Hill have come out staunchly in support of governmental intervention in the market. "I think we have investors who have been scared for years now or more," Rep. Barney Frank (D-Mass.) told the Daily in a recent phone interview. "And that's one of the major reasons we need rules. Rules are not anti-market; they're pro-market." Frank chairs the House Financial Services Committee, which last week held a hearing on the Madoff scandal. Securities and Exchange Commission (SEC) Inspector General H. David Kotz was on hand to testify in front of lawmakers who overwhelmingly blame his agency for failing to catch the red flags sooner. Frank promised to further regulate the SEC, but argued that it is too early to suggest specific policies. "We aren't yet sure enough of what went wrong to know how to fix it," he said. In statements to the Daily through their press offices, Reps. Michael Capuano (D-Mass.) and Edward Markey (D-Mass.) also pointed fingers at the SEC and called for additional regulation. Markey and Capuano's districts include parts of Tufts' Medford/Somerville campus. "This situation is a prime example of lax federal oversight when it comes to many investment vehicles," Capuano said. "Unfortunately, it is too late for the many who entrusted their hard-earned funds with Mr. Madoff, but federal regulators must recognize the shortcomings of our current system and take thoughtful action to address them." Specifically, he suggested instituting more thorough disclosure requirements and more frequent examinations of investment advisors. Markey proposed similar reforms. "The fact that [Madoff] apparently got away with such a massive fraud for so long suggests that we need new leadership at the SEC, so that it can effectively accomplish its mission of serving as our nation's securities ‘cop on the beat,'" he said. Legislators said that the best strategy should take the form of a forward-looking approach, since there is little they can do to help investors recover funds lost when Madoff's scheme came toppling down. But even as political leaders encourage beefed-up rules, they concede that they cannot regulate away all instances of fraud. "Nothing's going to protect people against stupidity," Frank said. "People are still going to need to check and be [careful]."
After losing nearly two percent of its endowment in Wall Street mogul Bernard Madoff's alleged $50-billion Ponzi scheme, Tufts has been thrust headfirst into a national uproar over red flags, inadequate federal regulations and a crumbling economy.
As the world becomes more consumer-oriented and advertising remains ubiquitous, many questions about companies' marketing ethics have arisen. Many advertisers, always looking for new ways to promote their products, set their sights on college campuses.
The Arts and Sciences faculty last month narrowly rejected a proposal to allow American Sign Language (ASL) classes to fulfill the university's foreign language requirement, with the decision's supporters arguing that ASL did not fit the definition of a foreign language.
While most careers are suffering significantly at the hands of the economy, at least two professions are actually thriving. The demand for occupational therapists and school psychologists — two career options that may sometimes be overlooked — are rapidly increasing. According the Bureau of Labor Statistics (BLS), by 2016, the projected number of occupational therapists is expected to rise by 23 percent. For school psychologists, that number is expected to rise by 16 percent. Tufts is ahead of the curve, offering strong programs in what Professor of Occupational Therapy (OT) Sharan Schwartzberg calls "recession-proof" professions.
Scroll left and right through this interactive timeline to see the progression of Tufts' involvement in Bernard Madoff's $50 billion Ponzi scheme, from the university's 2005 investment in the Ascot Partners hedge fund to Madoff's arrest and Tufts' realization that it had lost over $20 million in endowment funds.
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The following are the snow emergency procedures for Medford, Mass. (Information from http://www.medfordpolice.com)
Pending the results of an ongoing internal investigation, the university's top two officials are withholding judgment on the process that led to a $20 million investment in Ascot Partners, a hedge fund connected to disgraced financier Bernard Madoff. University President Lawrence Bacow and Trustee Chairman James Stern (E '72) told the Daily this week that they have confidence in Tufts' financial arm, but they would not definitively say whether investors followed due diligence or overlooked any red flags. "I can't answer that yet," Stern said when asked if investors missed any visible warning signs. "I really prefer to answer a question like that when I've had a chance to review and study the material. It would be crass speculation on my part." Both administrators urged patience and pledged a full review of the university's policies with an eye toward fixing any institutional problems that might exist. They also echoed Director of Public Relations Kim Thurler's response to a New York Times article financially linking Stern with Jacob Ezra Merkin of Ascot Partners, calling the reporting misleading. Bacow said that he expects the internal review to indicate that the investment met with due diligence standards. "I know it was handled routinely," he said. "My expectation is that it did [meet due diligence], but until we go back and take a look, we don't know for sure." According to Stern, the Board of Trustees' Investment Committee will meet this month to discuss the $20 million loss. "We are doing a fairly elaborate review of this, as we should," he said. "We're going to have to come to some conclusion … If there are errors of oversight and due diligence, that's something we have to contend with." In the wake of the Madoff fallout, a number of financial experts have argued that the alleged Ponzi scheme should have been uncovered earlier. Madoff's consistent returns, they say, were too good to be true and impossible to replicate even using his self-professed strategy. Stern, the chairman of the New York-based private equity firm The Cypress Group, cautioned against leaping to conclusions. "Eyesight always gets really good when looking in the rearview mirror," he said. He also noted that illegal schemes are all too prevalent in the financial sector, making it impossible to nip them all in the bud. "In my 35 years on Wall Street, I have watched a variety of scandals," he said. "What I have learned is that if someone wants to commit fraud, they will commit fraud – and they will get away with it until they get caught. At some point it will get detected." Bacow, an economist by trade, also noted that generally speaking, disagreements about the viability of numbers and strategies do not necessarily suggest fraud; in fact, he said, they drive the economy. "If everybody looked at exactly the same information and always came to exactly the same conclusion, markets would not exist," he said. "The only reason that you have markets is that people look at the same information and draw different conclusions … If everybody has the same filters through which they view the world, nothing trades." Meanwhile, Bacow and Stern both reacted negatively to a Dec. 20 New York Times article that touched on Tufts' investment in Ascot Partners.
For investors seeking access to Bernard Madoff's house of cards, the front door was rarely an option. Instead, reports increasingly indicate that the reclusive former Nasdaq chief fueled his alleged Ponzi scheme with an air of exclusivity and carried it out almost entirely through middlemen. "The thing about Madoff is that people couldn't get to him directly," Economics Lecturer Chris McHugh said. "He was playing hard to get." It was this phenomenon, it appears, that led Tufts to entrust $20 million to the Ascot Partners hedge fund and pay the fund yearly fees, all in order to gain access to Madoff's consistent 10 to 17 percent returns.
A New York Times article that financially linked Board of Trustees Chairman James Stern with investor Jacob Ezra Merkin was misleading, according to the Tufts administration. Meanwhile, Tufts officials continue to defend the procedures that led to the university's ill-fated $20 million investment in Merkin's Ascot Partners, which lost almost all of its holdings in Bernard Madoff's alleged Ponzi scheme.
The New York law firm Abbey Spanier Rodd & Abrams filed a class-action suit against Ascot Partners on behalf of New York Law School, which lost $3 million in the Madoff fallout, and other forthcoming investors. Tufts lost $20 million from the same company.
After $20 million in losses from an alleged Ponzi scheme, legal experts say it might be time for Tufts to dig in its claws.
In the wake of Tufts' announcement on Friday that it had lost $20 million of its endowment in Wall Street mogul Bernard Madoff's alleged $50 billion Ponzi scheme, the university has maintained that its investment met due diligence standards. When the Board of Trustees' Investment Committee approved an investment in Ascot Partners in 2005, the body was aware that the hedge fund was linked to Madoff, Director of Public Relations Kim Thurler told the Daily yesterday. Thurler maintains that university officials followed appropriate guidelines, despite widespread outcry from the financial community in recent days that Madoff's methods had raised a number of red flags and that his returns were simply too good to be true. "Before making this investment, the university followed all of its usual due diligence procedures, including a full legal review and full review of the fund's investment strategy, and an analysis of the risks and strengths of the investment, including audited returns," Thurler said in an e-mail. "In light of this analysis, this investment seemed to be a prudent one." But after Madoff's arrest on Dec. 11 for securities fraud and his own admission of deceiving investors, University President Lawrence Bacow announced in an e-mail to the community that Tufts, too, had fallen victim to the former Nasdaq chairman's scheme. The school has written off the total amount of the $20 million investment, which represented nearly 2 percent of Tufts' endowment, and its disappearance will not significantly impact operations, Bacow said. He added that the university will participate in investigations of the fraud and will attempt to recover its losses. Meanwhile, Ascot Partners and its manager Jacob Ezra Merkin are the first in what is likely to be a series of firms and individuals to be sued by investors looking to recoup funds. Tufts is currently evaluating available legal avenues, according to Thurler. "At this time, we can't predict if we will be able to recover any portion of the loss, but we are exploring all our options, including legal action," she said. For Tufts and other misled investors, any results will likely take time to come to fruition. "This will go on for years," Economics Lecturer Christopher McHugh said. "Everybody will go after everybody else … I don't think there's any simple legal device." The casualty list While Madoff's alleged fraud may have pulled $50 billion out of the economy and left victims scattered across the globe, college endowments have emerged relatively unscathed. James Hedges IV of LJH Global Investments, a firm that specializes in investing in hedge funds and private equity for wealthy families, told Fortune Magazine that the absence of universities from the casualty list likely stems from their adherence to a more traditional investment playbook.
Tufts may have lost $20 million of its endowment in Bernard Madoff's alleged $50 billion Wall Street fraud scheme, according to an e-mail sent by University President Lawrence Bacow to the Tufts community this afternoon. (Click to read the full e-mail on The Hill blog)
