Harvard Responds to Iris Mack

It appears a few people at Harvard University have taken notice of the lack of notice, revealed by Iris Mack, of her book, Energy Trading & Risk Management: A Practical Approach to Hedging, Trading & Portfolio Diversification. (SEE: A Harvard Alum, Financial Mathematics Whiz, Tried to Get Her Book Noticed at Harvard: This is What Happened)

Below are emails from within the Harvard community discussing the post:

A Harvard Alum, Financial Mathematics Whiz, Tried to Get Her Book Noticed at Harvard: This is What Happened

Iris Mack,who holds a doctorate in Applied Mathematics from Harvard, recently tried to get her book noticed at Harvard Magazine. After that summer experience, she emailed me and said that "Harvard is anti-math, anti-STEM, anti-practical issues and always harping on fuzzy crap. I mean if you take a look at the alum's books they feature in the Harvard Magazine you can definitely see how they discriminate against alums in hard sciences and mathematical sciences..."

Here is a part of a recent exchange she had with the magazine. Be sure to view the link where the notice was finally put, it reads "Class Notes and Obituaries":

From Conservatisim to Not Believing in Anything, at Harvard

By Brian J. Bolduc

“How did you survive Harvard College?” conservatives ask me, half-jokingly.

Half-seriously, I tell them: “Hell if I know.”

Some pitfalls are shallower than I expected. For one thing, Harvardians are less rambunctious than their peers. Two years ago, for example, Karl Rove, a Republican strategist, spoke at Winthrop House, where he volleyed questions from an unsympathetic but respectful audience. That same year, he spoke at the University of Iowa, where two attendees tried to arrest him. Harvardians are so calm that three years ago several alumni asked President Drew G. Faust to appoint a task force to promote student agitation. They should have told her to cut hot breakfast.

True, Harvardians stage strikes every now and then. But most are spectators, not participants. Rather, I notice the liberal bias in more subtle ways—like when kids at the Institute of Politics play icebreakers. “Name your favorite columnist,” one of them says, and the rest chirp, “Gail Collins!” Meanwhile, I verify her identity with my neighbor: “Oprah’s friend, right?” I also notice it whenever I read The Harvard Crimson, which advocates the Second Amendment’s repeal. Still, I give the paper credit. It no longer supports the Khmer Rouge. And it publishes me.

For another thing, more Harvardians than I expected are conservatives. They rank among the more interesting people on campus, especially the New Englanders. They refuse to wear jeans and use awkward verbs like “midwife” in everyday conversation. They also fascinate liberals, who rarely recognize their prejudice. Last year, for instance, a sociologist interviewed some of us in preparation for a book about young conservatives. Her first question: “Are your parents religious?” Like clockwork.

Yes, liberals try to understand us, but some are patronizing in their attempts. Once when I told a girl I was conservative, her eyes welled with pity. “Do you feel isolated?” she inquired—as if she were my shrink. I thought she was going to show me an inkblot and ask if I saw Dick Cheney. That said, I prefer patronizing to nasty. Liberals can misrepresent our positions without penalty more often than we can theirs. When I criticized Obamacare, for example, a Harvard Democrat wondered about me on the club’s blog, “[M]aybe he’d prefer eugenics.”

Actually, the liberal tilt is quite navigable. Yet one pitfall for conservatives—for everyone, really—is deeper than I expected. It is cynicism.

When political junkies are freshmen, we breathe fire. We attend every event at the IOP. We sign up—by the hundreds—for the political parties. Eventually, however, we realize something. We realize that the politicians are dull and the activists crazy. My freshman year, for example, Dominique de Villepin, then prime minister of France, visited the IOP. His speech was less than profound. “Competition among our states is in no one’s interest,” he said. “The only possible road is our cooperation.” Deep, Dominique, deep.

The activists are worse. You have the sensationalist adults. When the Harvard Republican Club hosted a filming of the movie, “Hillary! Uncensored: Banned by the Media,” three years ago, an activist introduced the film by calling Hillary Clinton a traitor to feminism. “A person should be judged by the content of their character, not the contents of their underpants,” she said. And you have the eager students. One time, for instance, the HRC hosted a party for visitors from other schools, where one guy distributed his business card, which read, “Future Elected GOP Leader.”

Read the rest here.

Brian J. Bolduc ’10, a Crimson editorial writer, is an economics concentrator in Winthrop House. His column appears regularly in the Crimson.

Why the Iris Mack Tell-All about Former-Treasury Secretary Robert Rubin Is More Trouble for Former -Treasury Secretary Larry Summers

I see that Iris Mack is out with her story about former-Treasury Secretary Robert Rubin, who is now chairman of the Council on Foreign Relations.

I am following the story closely since Iris originally came to me with it. After extensive phone conversations, many emails and some fact-checking, I decided not to go with the story, which doesn't mean Iris isn't a fascinating woman.
 .
Iris grew up in the The Calliope Projects of New Orleans, an area of New Orleans that gained nationwide notoriety for its extremely high violent crime rate. She says because of this she knows how to fight. "You have to pick your fights though," she told me. "If you fight all the time you will get killed."

She has 16 siblings – "1 half, 9 full, and 6 steps."

She says her family was too poor to afford fast food, but her mother cooked and they never went without.

She also says there were plenty of cousins in the project. "One of my mom’s oldest sisters had 18 kids. So that’s 18 cousins right there. I think she had at least 3 sets of twins. I remember as a child thinking, Jesus is she not tired! I have so many first, second, third, fourth….cousins, I would need a detective to help me count them all.

"Don’t even begin to ask me about nieces and nephews because I don’t know how many" she says.

Somehow, Iris found a way out of the projects. She graduated from Vassar College with a Dual B.S. degree in  Mathematics and Mathematical Physics, then she went on to the University of California and received an M.S. in Mathematics. As a Sloan Fellow she attended London Business School and received an Executive M.B.A. She also has a PhD in Applied Mathematics from Harvard.

Her doctoral dissertation, "Block Implicit One-Step Methods for Solving Smooth and Discontinuous Systems of Differential/Algebraic Equations: Applications to Transient Stability of Electrical Power Systems," was published by Harvard University Press.

She was also semifinalist for the NASA Astronaut Program. From 1988 to 1991 she was a Lecturer, Researcher and Consultant in the fields of Applied Mathematics, Financial Engineering, Statistics and Operations Research at the MIT Sloan School of Management

A long journey brought her to Enron where she was assigned to evaluate the British division. She saw serious problems with the division and wrote them up in a report. When she got back to the states, her boss and her boss's boss took  her to dinner and told her that was not the kind of reports they write at Enron.

At the time, she thought the problem was with the British division and not the entire firm. She ultimately left Enron and ended up at Harvard Management Corporation. HMC is the Harvard firm that manages the Harvard endowment. After awhile, she realized that HMC was taking on a number of very risky trades (The trades ultimately cost the Harvard endowment billions of dollars in losses). After going through the Enron experience, she decided to speak up. She sent an email to Larry Summers, then-Harvard President, and current top economic adviser to President Obama, about her concerns. Despite a recent positive review that resulted in her getting a bonus, following the email to Summers, she was fired. She retained a lawyer and reached a monetary settlement with Harvard.

She is now a consultant in Europe and is apparently popular on the European speaking circuit. She has speaking gigs in London, Paris and Zurich.

During my conversations with her, she vacillated somewhat on going public with the Rubin story, but now that she has, I am convinced her focus has returned to Summers. At one point, she mentioned to me that the Rubin story was a chapter in a book she is writing. When I asked her what the rest of the book was about, she told me that it was going to be about how she managed to get herself out of the projects, and also about what happened with Harvard and Summers.

Thinking for sure that she must have signed some kind of confidentiality, nondisclosure agreement with Harvard, when she reached her settlement with them, I asked her how she was going to be able to write about Harvard and Summers. She explained she had found a loophole in the nondisclosure agreement drawn up by the Harvard lawyers. The loophole, she says, will allow her to say anything she wants about the people she worked with at HMC and about Summers. "Harvard lawyers really aren't that bright," she told me.

Keynes at Harvard is Now Online

Back in December, I noted an Ilana Mercer column about the book, Keynes at Harvard. She wrote:

John Maynard Keynes was a Fabian socialist strongly opposed to private enterprise. The Fabian society was formed in England in the late 1880s and spread throughout the British Empire. The Fabians aimed to replace the market with "an efficient administrative bureaucracy," as F.A. Hayek put it. Its emissaries also came to infect almost every nook and cranny of the American state and civil society.Fabians departed from communists on the use of force. Whereas the communists believed in "attaining power by violence," Fabians perfected a form of Islamic takiya – lying to spread the faith, in their case, state-socialism."Easing into absolute power by deceit" was to be achieved by infiltrating every societal institute under the guise of moderation (and by deploying impeccable manners, once terribly important among the British elites).

I bought a used copy of the book and found it fascinating. I have not commented on the book further here at EPJ because I want to read the book again, think about the book some more and check out some of the references in the book. The book makes some strong charges and certainly goes beyond anything you are apt to read anywhere else. For example, the book calls Joseph Schumpeter, a neo-Marxist. The charge is referenced with some of his writing, but obviously that reference has to be checked and thought about before one can buy into or dismiss such a charge.

The latter chapters on Keynes and the Fabians are shocking, but seem to have a ring of truth. From what I know about Fabian socialists and their methods of infiltration and manipulation the book has all that correct.

I bring all this up because EPJ reader Joel Lefevre writes to inform me that Keynes at Harvard is now online.

So I say go for it. It is fascinating reading. But, please, realize I am not endorsing the book at this point, only because I want to do some more independent research on the charges made. If the charges prove sound, it will provide fascinating insight into the Keynesian revolution and a lot of other peculiar things that happen in and around politics and government.

Since The Multiplier Is Being Discussed In Many Lofty Circles, in and around...

...Harvard, The Marginal Revolution blog and, perhaps soon, at the incoming Obama's Council of Economic Advisors, Bob Murphy was alert enough, in a comment to a Tyler Cowen post, to dig up and provide the link to Murray Rothbard's great reductio ad absurdum destruction of the multiplier theory.

Harvard Alumni Uncover the Real Keynes

Writes Ilana Mercer:

"Keynes At Harvard" provides commendably detailed and scrupulously documented answers:

John Maynard Keynes was a Fabian socialist strongly opposed to private enterprise. The Fabian society was formed in England in the late 1880s and spread throughout the British Empire. The Fabians aimed to replace the market with "an efficient administrative bureaucracy," as F.A. Hayek put it. Its emissaries also came to infect almost every nook and cranny of the American state and civil society.

Fabians departed from communists on the use of force. Whereas the communists believed in "attaining power by violence," Fabians perfected a form of Islamic takiya – lying to spread the faith, in their case, state-socialism.

"Easing into absolute power by deceit" was to be achieved by infiltrating every societal institute under the guise of moderation (and by deploying impeccable manners, once terribly important among the British elites).

Mercer's full column on Keynes is here , and is must reading.

Harvard Dissed Obama Choice to Head CEA

President-elect Barack Obama filled the last of the four top economic positions Monday, announcing that his Council of Economic Advisers will be chaired by University of California at Berkeley economist Christina D. Romer, who, according to the Harvard Crimson, "was a subject of national indignation earlier this year when Harvard did not offer her a tenured professorship."

Romer appears to be the most sane economist of all Obama's selections, which is not saying a lot given the other selections. But, she clearly understands that money supply plays a role in the business cycle and she appears to be in favor of tax cuts and government spending cuts.

There are some problems with her anti-tax stance though, in that she reaches the conclusion based on some pretty wacky econometric voodoo conclusions that Kevin Drum discusses and she leaves a loophole in her thinking to occasionally raise taxes, as Drum points out:

One of the Romers' conclusions, by the way, is that tax increases designed to reduce an inherited deficit have a positive impact on economic growth. So if Obama ever does raise taxes, expect this to be the reason he gives for it.

Harvard's Endowment Has 8.6% Return

Harvard announced today that its endowment earned an 8.6% return during the fiscal year ending June 30 to reach $36.9 billion.

-EJP Newsdesk

On Cheap Wine: The Best Post Steven Levitt Has Ever Made

At his Freakonomics blog, Steven Levitt explains a small test at Harvard he conducted regarding the difference in cheap wines versus expensive wines. Interesting results. In addition to the insight on wines, and I don't want to give away the ending, but I think it also punches a bit of a hole into the usefulness of polling and questionnaires in empirical studies.

Levitt's story and results are here.

Harvard University Cashing In On Inflation

Fed Chairman Ben Bernanke recently spoke at Harvard University. He told Harvard College’s graduating class that "I see the differences between the [inflationary] economy of 1975 and the economy of 2008 as more telling than the similarities."

Meanwhile, elsewhere at Harvard, Harvard's money management team was witnessing huge profits from their bets on inflation.

The Harvard Crimson reports, "Harvard's endowment posted returns of approximately 9 percent through the first 10 months of this fiscal year, according to data from the University. The increase puts the endowment's value at around $38 billion as of this April, up from $34.9 billion as of last June."

During the same period the S&P 500 Index lost 8 percent. So how did Harvard do it?

Heavy bets on inflation.

The John Harvard Letter that was released last August shows that Harvard's investment in commodities was at 17 percent of the endowment for fiscal year 2008, making it their single largest investment by asset class. That number reflects a near tripling of the share of the endowment invested in commodities since 2000. Further, the endowment held another 7 percent of its portfolio in inflation-indexed bonds. Thus, a full 24 percent of Harvard's endowment was a bet on inflation.

With commodity prices soaring, it was the place to be, and Harvard was there.

Harvard Business School Buys Students BMW's and Porches

Sort of.

It's sophisticated financial engineering at work. NyPo has the details, here.

Bernanke Tells Harvard: Things Are Different This Time

Federal Reserve Chairman Ben Bernanke ’75 spoke to Harvard College’s graduating class today in Tercentanary Theatre at Harvard.

Bernanke spoke to the class about the year 1975, the year he graduated from Harvard. He told the class:

Then as now, we were experiencing a serious oil price shock, sharply rising prices for food and other commodities, and subpar economic growth. But I see the differences between the economy of 1975 and the economy of 2008 as more telling than the similarities.

Oh yeah, they are different alright.

Bernanke again:

Economists generally agree that monetary policy performed poorly during this period. In part, this was because policymakers, in choosing what they believed to be the appropriate setting for monetary policy…

Sure, it is real different this time, for the worse. In 1975 money supply (M2) grew at 8.0%, today it is growing at 10.2%.

Bernanke again:

For a central banker, a particularly critical difference between then and now is what has happened to inflation and inflation expectations. The overall inflation rate has averaged about 3-1/2 percent over the past four quarters, significantly higher than we would like but much less than the double-digit rates that inflation reached in the mid-1970s and then again in 1980.

The inflation rate in 1975 was 9.0%. According to John Williams at Shadow Government Statistics, if you calculated the inflation rate now, the same way it was calculated in 1975, the CPI is near 12% this year.

Bernanke then had the chutzpah to add:

The Federal Reserve and other central banks have learned the lessons of the 1970s… as a central banker, I would be remiss if I failed to mention the contribution of monetary policy to the improved productivity performance.