Saturday, September 25, 2021

Housing the Neediest, the Harvard Way

By Yard Correspondent Larry Lowell
with Bart Vanzetti in Boston

The news continues to be grim: the methodical demolition of American democracy at the hands of the Trumpublican Party continues its relentless march, the bent Supreme Court decides to bring back coathanger abortions sub silentio, the unfolding climate disaster rages on, and the Red Sox continue to suck while wearing hideous yellow uniforms, and we learned that our Constitutional order was saved only by the grace of – wait for it ‐ Potatoe Dan Quayle.

So we were desperate to bring you some good news.  Thanks to the beneificence of Penny Pritzer '81, we are now able to bring you some:


For those of you worried about Harvard Economics Professors doing their business, whatever it is, from rude huts erected in Cambridge Common, the news comes as an immense relief.  A new building for the Economics Department – what could be better?

We remember, back before Penny Pritzker swanned across Harvard Yard, that our sectionmen (as they were then called, and were) were consigned to rather shabby quarters in a temporary barracks originally built for the Army to house ROTC.  Despite these privations, they succeeded in explaining to the meanest intelligence (us) the wonderful things that happened when marginal revenue equaled marginal cost.

Things have improved for the beleaguered Economics Department since then, as they can now be found in the Littauer Center, a handsome granite pile where luminaries like Henry Kissinger used to spin their brilliant theories, like nuclear war was really your friend.  Hey, he got tenure for it.

But Littauer lacks the state of the art facilities needed to support a world-class Economic Department (apparently).  Under the current layout for example, Professors and undergraduates are allowed to circulate in the same corridors, leaving open the possibility that the latter could try to speak to the former.  This can't go on.

The new building, and let's go way out on a limb here and call it the Pritzker Center, is supposed to be built somewhere north of the Yard, although last we looked there wasn't a lot of space within five minutes walk to the Faculty Club.  

By the way, who is Penny Pritzker and how is it that she has $100,000,000 to throw around?  According Harvard President Bacow, as told to the official Harvard organ, the Gazette:

“Penny Pritzker is everything we hope an alum will be — an accomplished and principled leader, a true and tireless public servant, and a loyal supporter of Harvard and of other institutions devoted to the pursuit of knowledge and the expansion of economic opportunity,” said President Larry Bacow. 

She sounds very nice.  She's also one of the heirs to the Hyatt Hotel empire:

Former U.S. Secretary of Commerce and Hyatt Hotels billionaire heiress Penny Pritzker is one of 40 politicians named in Sunday’s release of the Paradise Papers, an investigation of 13.4 million leaked records from two offshore services firms and 19 tax havens' company registries. 

The new Ec Building will have plenty of room for
faculty meetings (Architect's drawing)

....Pritzker, who served as the U.S. Secretary of Commerce under the Obama administration .., was required by federal law to divest any business interests identified by the U.S. Office of Government Ethics as potential conflicts of interests within 90 days of her confirmation. In a May 2013 letter written to the U.S. Department of Commerce, Pritzker stated she would divest herself of 221 holdings, [including] IAS and Triton....

According to the Paradise Papers, that’s not what happened. "Documents show that on June 27, 2013 — two days after her confirmation — Pritzker transferred shares in IAS Holdings and Triton Container to Delaware-registered DRBIT Investors LLC,...." A form filed with the Bermuda Monetary Authority shows that DRBIT is owned by trusts for Penny's children,. ...

Triton Container is a Bermuda-based shipping container company founded by Penny’s cousin Tom Pritzker, [who] invested $1 million at the time of its founding. In February 2011, the Pritzkers sold a majority stake in Triton Container to Warburg Pincus & Vestar for a reported $1 billion. It now has more than $8oo million in revenues and $8 billion in assets.

Prior to joining Obama’s team, Pritzker co-founded real estate investment firm Artemis Real Estate Partners, served as the chairman of the board for credit-leading firm TransUnion, and also was a board member of Hyatt Hotels, initially purchased by her uncle Jay Pritzker in 1957.

If only they had taught us in Ec. 10 that the best way to make billions is to start with a tidy pile of family money!  Maybe they did, but unlike Penny Pritzker, we weren't paying attention.  Also once you have s**t tons of money you don't pay taxes on, you get to keep your original wad.  According to Hyatt's own SEC filings, Penny's family trusts own over 10% of Hyatt, worth let's see over $800 million.

By the way, although she pays zero taxes on the appreciated value of inherited stock, if by some chance she has taxable income from something (like her salary as Secretary of Commerce), she can avoid taxes by deducting the value of her $100 million donation, or about $37.6 million of tax savings at current rates.  Who doesn't love America?

Building palatial new digs for Harvard gasbags was not Penny Pritzker's first foray into Cambridge real estate, as this by now yellowed clipping from the Boston Globe recounts:

Governor Deval Patrick said yesterday that he plans to direct Massachusetts employees to boycott Hyatt hotels ... unless the chain rehires the nearly 100 housekeepers it fired last month.

Patrick wrote to Hyatt Hotels Corp.’s chief executive, Mark S. Hoplamazian, on Tuesday, threatening the boycott - his third attempt in a week to convince the company to reverse its decision to replace the housekeepers at three Boston-area Hyatt hotels with lower-wage workers from a Georgia staffing firm.....

The chain said it created a task force to help the dismissed housekeepers find new jobs, offered retraining assistance, and extended their health care coverage for three months [Thank you, Penny! – Ed.].

The Hyatt Regency Boston, the Hyatt Regency Cambridge, and the Hyatt Harborside fired 98 housekeepers on Aug. 31, replacing them with $8-an-hour employees from Hospitality Staffing Solutions. Many had been cleaning rooms at the chain’s hotels for more than 20 years and earned about $15 an hour.

Some of the housekeepers said they were asked to train their replacements and were assured that the crews were only vacation and holiday fill-ins

It turns out that the Harvard Economics Faculty is not the only bunch that's had trouble finding adequate lodgings, by the way.  For several months now, homeless persons have been camping out in tents on sidewalks in South Boston, near Boston Medical Center:

Her estimable reporting on these people suggested strongly that they were desperate not only for housing but for health care services to help them fight their addiction, but were having little luck getting either.

We're going to go way out on a limb here and suggest the reason that our fellow human beings are sleeping in tents on sidewalks is because they can't afford or obtain (a) housing and (b) health care.

The “problem” of homelessness is usually presented as the agony suffered by rich people who have to see them as they cruise the streets of rich cities like San Francisco or Los Angeles in their Teslas:

It's not that the homeless are suffering that's the problem, it's that rich people have to look at them.

Funny how homelessness has increased in places where housing prices and income inequality have skyrocketed.  Like San Francisco, Boston, or, just across the river, Cambridge.

Perhaps if billionaires like Penny Pritzer '81 had to pay taxes on their huge unearned wealth, and to pay their workers living wages instead of tossing them onto Memorial Drive, there might be more money to build housing and provide services to the homeless and millions more facing eviction and workers could afford decent homes in Bailey Park.

If only there was a large group of trained professionals who could analyze the relationship between rich people skipping out on taxes on the one hand and poor people camping out in the streets of Boston on the other.

We're sure they'll get right on this as soon as they settle into their plush new digs built for them thanks to the munificence of Penny Pritzker '81.

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