Democrats Can Insure the Universities and Foil The Present Administration

A scheme to render the government powerless

The present administration has recently been attacking the universities, in particular Harvard, by threatening their grants for research. Harvard is one of the great biomedical research hubs of the world; its destruction would be a profound tragedy for the world. By any reasonable standard, funding for science passes a cost-benefit analysis. I have written about this extensively in the past, and want to avoid preaching to the choir. However, I will not entirely neglect adducing evidence.

We have substantial evidence that these negative financial shocks, especially for early career researchers, have long run effects on their skill accumulation and eventual research productivity. Cheng, Perlman, Staudt, and Tham (2024) found that interruptions in funding lasting longer than 30 days have enormous, negative, and permanent effects on researcher earnings, productivity, and employment. This is not merely the loss of four years, but the loss of an entire cohort. Further, people are risk averse. Allowing for there to be serious uncertainty in the course of our research policy is destructive in and of itself. We need people to be confident in their choice of occupation, and not avoid those with the greatest positive spillovers.

What Democrats can do now is signal that they will insure the targeted universities against their losses, and payout when they next get in power. This will allow the universities to borrow against this promise, and fund their programs until the present administration loses its baleful hold on the nation. And no, Harvard cannot fill the hole out of its endowment. Harvard receives $9 billion a year, and the endowment – paying out 5% a year – can provide 2 and half billion, much of which is earmarked for other purposes anyway.

This would cost no more, adjusted for interest, than if the government were to continue funding Harvard anyway, provided the Democrat’s promise is entirely credible. If it is not, then we will have to provide a larger reward at the end. Given the enormous spillovers from research, even overpaying would be worthwhile.

The concern would be, of course, that the voters will not vote out the present administration at the next election. This would be especially concerning if the effect of the Democrat’s action was to insulate the voters from the consequences of their own actions. This might be the case if the Democrats had promised a scheme to reimburse everyone who paid tariffs (if they could even feasibly do that). However, it is not plausibly the case that voters would see the effects of this. Medical research is the canonical example of something in which interrupted progress is invisible.

I write this in hopes that we do something. I do not want it to sit unread. If you have a friendly connection with Democratic lawmakers or influencers, please send this to them.