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Saturday, October 15, 2016

How Hewlett-Packard layoffs were avoided by founders Bill and Dave

GT headline, 'HP cuts jobs at Corvallis Campus,' Oct. 14, 2016, p. A1

PHOTO: The Corvallis, Oregon morning newspaper headlines announced the latest layoffs by Hewlett-Packard as being the result of a structural decline in business and the last year split off of the computer printer and PC business from the Hewlett-Packard Enterprise that runs a computing services business. Both of these parts of HP had been previously split off from the medical, analytical and electronic instrument test and measurement businesses that were later split into Agilent Technologies and Keysite Technologies, which included the electronic test and instrument businesses run by HP since it was founded in 1939. (See newspaper story by Kyle Odegard, "HP cuts jobs at Corvallis Campus. Up to 4,000 workers are to be laid off across the company," Gazette-Times, Fri. Oct. 14, 2016, p. A1, A3 posted online as "HP announces job cuts" that follows up on the previous story by Nathan Bruttell, "HP to jettison up to 30,000 jobs as part of spinoff," posted Sep. 15, 2015)

Aerical view of Hewlett-Packard Corvallis Campus circa 2010

PHOTO: An aerial view of Hewlett-Packard's Corvallis, Oregon campus circa 2010, which is located near Oregon State University and next to the Willamette River. The first building was built in 1975 at the center of the site and named "Building Number 4." It addressed the business needs of the rapidly expanding handheld scientific calculator division whose first product was the famous HP-35 handheld calculator first introduced in 1972. At the Corvallis site, HP invented some of the first personal desktop and portable computers, which led to the construction of HP buildings numbers 3 and 5 being built adjacent to Building 4. HP also built the world's first handheld computer smart phone in 1982 based on Bell Labs then new cell phone technology, but the project was cancelled by HP management and Steve Jobs of Apple picked it up after being shown it. Over the next twenty years, the big growth of the site occurred after the invention of the inkjet printer for both calculators and personal computers that led to more buildings being built to house the nearly 10,000 employees who were working on the HP Corvallis site by the 1990's.

headline 'H-P executive predicts 700 new jobs' Gazette-Times Aug. 8, 1974, p. 2

PHOTO: Hewlett-Packard's plans in the 1970 to build a calculator plant and research facility in Corvallis is reported in a newspaper article by John Atkins, "H-P executive predicts 700 new jobs," Gazette-Times Aug. 8, 1974, p. 2. (See previous posts HP and Corvallis newspaper history (3/11/09) about the move of the Hewlett-Packard calculator division from Palo Alto, California to Corvallis, Oregon in 1975 and Don't Cali-fornicate Oregon and HP annexation history (6/14/12).

I've written recently about the history and influence of company founders Bill Hewlett and Dave Packard. (See previous posts HP breakup making Bill and Dave spin in their graves (9/11/15) and HP 3-D printers praised by Jim Cramer CNBC Wall Street reporter (7/24/15))

What I've not said much about is how the Hewlett-Packard company founders William Hewlett and David Packard avoided laying off employees from the start of the company's founding in 1939 until their deaths around the turn of the 21st Century. They were both humble men who had survived the Great Depression in the 1930's and therefore did everything in their power to manage HP in a very conservative manner that would not require HP to be a hire and fire operation in order to remain profitable and in business if another Depression occurred. They also did not want to follow the stuffy and formal business practices common in Back East companies at the time, for example, both men insisted on employees dressing casually and calling them by their first names Bill and Dave instead of by the more formal conventions of addressing them as "Mister," while dressed in a business suit.

To avoid layoffs, Bill and Dave adopted a very conservative business strategy that was paradoxically based on innovation and invention, which historically had led many businesses to high risk, boom and bust ventures. To avoid layoffs, in addition to their excellent judgement in deciding what products to invest in versus not, they believed in having a diversified portfolio of businesses and products that were each managed by a dedicated team that could fail or succeed without bankrupting the company. This strategy allowed for the risk taking that often led to spectacular successes, while at the same allowing Bill and Dave to easily judge the financial results within thier larger business.

The advantage of Bill and Dave's decentralized division management business model was it allowed the company to grow by promoting the best people within the company without requiring Bill and Dave to micromanage every business for overall HP success. This business model worked great in the types of businesses HP was initially involved in, such as electronic test and measurement instruments and handheld scientific calculators, but it proved to have a problem in businesses that required a system of products from multiple divisions and other companies, such as computer systems, which need mutally exclusive business models to be competitive u the real world.

By the 1980's Bill and Dave had recognized the system management issue and reorganized their managers in a matrix with responsibilities to both their "box product business" as well as to the success of HP's system businesses. Of course, this was easier said than done because it required managers to fly all over the world to coordinate their activity with other businesses as well as HP's customers.

Despite the difficulty of managing the rapid growth and diverse businesses of HP, Bill and Dave kept the HP growing growing until they died. But after they died, Wall Street investment bankers started to impose their view of how companies should be organized and divided it up into smaller pieces that were easier to manage and easier for Wall Street to understand and judge the success or failure of the business finacially.

Of course, Wall Street investment bankers make good money by splitting up companies, but they did have a good point about the drastically different business models that were required to make HP successful and the fact that these business models were often in conflict to the detriment of all. For example, the traditional electronic instrument business could grow at ten or twenty percent per year while investing about ten percent of revenues in R & D to continuously upgrade and invent new products for their customers. In contrast, other businesses could be profitable only with a larger investment in R & D, such as software businesses that often need to spend more than 20 percent of revenues for R & D in order to remain competitive.

Another example was the business versus consumer businesses, such as HP printers, where a home user doesn't have the same expectations of reliability and speed that a business might have and be willing to pay for. Consumer printing products, such as inkjet printers successfully profit from a business model that is called by business schools a "razor vs. razor blade" strategy of virtually giving away the razor or printer product in order to gain market share, with the expectation that your profits will come from the annuity payment comprised of repeat sales for supplies, such razor blades or inkjet pens and paper supplies.

Of course, the problem created by needing to use multiple business strategies is figuring out how it can be explained to public investors, including inpatient Wall Street stock portfolio managers who can't figure out how to value your business in the public stock market.

Of course, as long as the company founders Bill and Dave were the major stockholders, it didn't matter because they understood it and as long as they grew revenue and profits, Wall Street didn't care about the details. However, shortly after their deaths, HP was pressured into a four way split of their business, along with a few acquisitions and mergers driven by Wall Street investment bankers. (HP first split into HP and Agilent Technologies, then HP split into HP Inc. and HP Enterprise plus Agilent split off Keysite Technologies, which was the original test and measurement box business of HP. Sadly, while HP is still a big company, this has led to it becoming a hire and fire operation like most companies in America.

See previous posts:

Saturday, October 8, 2016

OSU students' daily newspaper goes weekly for print edition and is inserted in local professional newspaper

Oregon State University's student newspaper "The Daily Barometer" is now being printed weekly only during the main school year, but it is now also being inserted in the local professional newspaper every week. (See About page "Barometer," accessed Sep. 6, 2016 that said, "Attention: The Barometer is no longer printed in the Summer and will only be published on Mondays starting Fall Term 2016. Please check out our online presence for daily news and updates." Also see the editorial by Riley Youngman Editor-in-Chief, "A new year, a new Baro," Barometer, Mon. Sep. 26, 2016, p. 2 and an announcement by the local profession newspaper the Gazete-Times: Mid-Valley Media, "A new partnership," posted Sep. 29, 2016. This change in publication of the print edition was hinted at in editorials at the end of by last by student editors who wanted readers to know they would be returning after summer break 2016, which was the first summer for decades that a weekly printed edition was not printed during the Summer Term.

This change of the OSU student newspaper, from daily to weekly print editions, prompted me to write the following letter to the editor of my local professional newspaper:

Those of us with nostalgia for old-fashioned newspapers printed with ink on newsprint were sad to read that the Oregon State University's daily student newspaper is now printed only every Monday during the fall to spring terms, but are happy to have the new printed version, called "The Baro," inserted into the Gazette-Times every Tuesday, albeit with a 4.5-inch shorter page height.

Forty years ago my mother, who refused to touch any computer, warned me that I might get what I wished for when I started evangelizing for the paperless publication computer technology that was being invented by people in both Silicon Valley and Corvallis.

Approximately two decades ago both the G-T and the OSU Barometer were some of the first publications on the World Wide Web, which leads to the question: When will the G-T start following the weekly print schedule adopted by OSU students?

(Quoted from Thomas Kraemer,"Letter: Happy to see 'The Baro' in the G-T," Gazette-Times, Tue. Oct. 11, 2016, p. A7, posted Oct. 8, 2016)

The editor of my local newspaper, Mike McInally, told me in a personal communication that he had, "No plans yet to go weekly, but it would be interesting to try to figure out a way to do that correctly." He said the Portland Oregonian newspaper has tried, with mixed results, to alter its print schedule and it also shrunk the newspaper to an 11" wide by 15" tall tabloid-like page size.

It seems to me that the value of a large newspaper page is the ability to skim read more news curated by human editors, and shrinking page sizes just reduces the benefits, at least until artificial intelligence can truly replace these human editors in the future.

For reference, here are the old and new page sizes:

  • OSU Barometer old page size 11" x 17-1/2"
  • OSU Baro new page size 11" x 13"
  • Cazette-Times page size 11" x 23" (Note it had a wider page until a few years ago when most newspapers standardized on their curent paper width, which caused the wider paper to become too expensive to buy)
  • Oregonian page size 11" x 15" in 2016

Also of interest is an "opinion piece" run in the OSU student newspaper by Ed Ray, Oregon State University President, "Welcome back students, from President Ray," Barometer, Mon. Sep. 26, 2016, p. 3. The Oregon State University President mentions the upcoming 150th anniversary of the founding of OSU in 1868 as a land grant college. President Ray also summarizes the latest enrollment figures, including the fact that 59% of the 7,650 incoming OSU students are instate students (4,510 new instate students) who have come from all of the counties in Oregon. Ray doesn't mention the overall enrollment numbers, which this year promises to be more than 40,000 students.

Some other links to news of interest:

Finally, for my own reference, I've listed below some links to the key OSU Calendars:

Obamacare rates in Oregon hurt many voters just in time for the Presidential election

I am glad to be old enough for Medicare because it is clear, from the letters to the editor of my college town's professional local newspaper, that early retirees on Obamacare are being price gouged by health insurance companies as well as drug companies and hospitals that charge cash customers 10 times what they charge insurance providers.

For example, one letter writer (see quoted letter below) described how her or his monthly premiums increased from a little over $100 per month before Obamacare went into effect, to nearly $600 per month for 2017. It is clear to me that Republicans added changes to the Affordable Care Act in a way that they knew would blow up Obamacare just in time for the 2016 elections as a political trick to help Republicans get elected. Ironically, many Republican politicians are now upset that it might help Trump get elected because these same Republicans do not support Turmps crazy political agenda.

Below is the text of letter I mentioned above:

I recently learned how Republicans calculatedly amended Obamacare in a way that would upset many voters just before the 2016 presidential election.

Prior to Obamacare, I paid a little more than $100 per month in health insurance premiums.

I was willing to keep my grandfathered health plan, as President Obama promised, by continuing timely payments of the premiums even though they more than doubled to $264 by 2016.

However, contrary to Obama's promise, the insurer canceled my policy by exploiting a loophole amendment to Obamacare that Republicans inserted.

Consequently, right before the presidential election I must sign up, or pay a penalty under the so-called "Affordable Care Act," for an Obamacare plan costing $659 per month during 2017, or if I change doctors, $579, despite financially needing only the catastrophic coverage I had.

No presidential candidate has proposed a solution to fix the root problem with health insurance - everyone wants to stay alive at all costs and their inelastic demand for medical treatment will drive up costs toward infinity,according to the fundamental laws of economics.

Insurance companies claim the number of people receiving heroic medical treatments costing more than a million dollars per person, right before they die, makes health insurance an unprofitable business, which is believable given the premiums that individuals and employers are able to pay and also how few people are able to earn and save even a million dollars for retirement during their lifetime.

(Quoted from Kim Wilson, "Letter: The root problem with insurance," Gazette-Times, Oct. 11, 2016, p. A7 posted Oct. 8, 2016)

Below are some related links of interest:

Sunday, October 2, 2016

New Saxx underwear endorsement by Chicago Cubs baseball player Jake Arrieta reminds me of Jim Palmer's Jockey endorsement

Saxx underwear as featured in Businessweek, Sep. 26-Oct. 2, 2016, p. 76

PHOTO: New Saxx underwear for men is endorsed by the Chicago Cubs baseball player Jake Arrieta, which reminds me of the endorsement of Jockey underwear by the baseball player Jim Palmer in the 1980's, which continued for several decades. Men's underwear fashion is often set by gay designers who love men, but will use a sports figure to endorse it as a way to give straight men permission to wear underwear they know women will like, but they might worry is too gay to be seen in the locker room. Also, traditionally most of men's underwear was bought by women for their man, and so the marketing also had to appeal to women. Jockey has recently lost market share to Under Armor and others who have created the "boxer-brief" that doesn't look quite as gay as the old Jockey y-front bikini, but an emerging competitor Saxx is coming on strong according the business article by Gordy Megroz, "The Pampered Package. Guys, it's time to put the family jewels in a proper pouch," Businessweek, Sep. 26-Oct. 2, 2016, p. 76, online as "Men's Underwear Gets a Mesh Makeover," posted Sep. 21, 2016 (See previous post Jim Palmer Jockey underwear 1980s ads (7/2/09))

Jim Palmer Jockey Y-front colored underwear ad in Newsweek, Jun. 20, 1983, p. 9

PHOTO: Jim Palmer played for the Baltimore Orioles Major League Baseball team (1965-1984) and posed for the above Jockey underwear ad in Newsweek, Jun. 20, 1983, p. 9. See previous posts Academy Awards host Neil Patrick Harris has underwear 'wardrobe failure' (2/24/15), Jim Palmer Jockey underwear 1980s ads (7/2/09), Jockey underwear 'no homo' Boondocks cartoon homophobia (8/1/10), and Alice's Restaurant, Jockey underwear, military draft 1969 (6/15/10)

Friday, September 23, 2016

I must be 'old' because I'm reading the obituary page

The Advocate obituary for Mark Thompson in 2016 and his gay history book 'Long Road to Freedom,' 1994

PHOTO: A magazine obituary by Lucas Grindley, "Former Advocate editor, Mark Thompson, Dies at 63," The Advocate, Oct./Nov. 2016, p. 32, online as "Editor and Author, Mark Thompson, Remembered for Grasp of Gay Spirit," posted Aug. 13, 2016 is shown next to the gay history book edited by Mark Thompson, with a Foreword by Randy Shilts, "Long Road to Freedom: The Advocate History of The Gay and Lesbian Movement," St. Martin's Press, 1994. "The Advocate" obituary says, Thompson was "a founding member of the Bay Area-wide Gay Students Coalition at San Francisco State University, and it references his website. Thompson started writing for The Advocate in 1975 and would spend two decades at the LGBT magazine." The Website by "Mark C. Thompson - Biography," accessed Sep. 23, 2016 says he "is a world-renowned authority and top speaker on Leadership, Driving Change and Innovation, Sales Growth, and Customer and Employee Engagement. . . Mark has worked side by side with three of the world's most legendary disruptive innovators: Steve Jobs, Charles Schwab and Virgin Group founder Sir Richard Branson. . . Mark was Charles Schwab's former Chief of Staff and Chief Customer Experience Officer, and the Executive Producer of which today has assets over $2.4 Trillion." Thompson's colleague Randy Shilts was a University of Oregon graduate who in 1975 went on to work as a journalist for "The Advocate" before becoming a famous reporter for the "San Francisco Chronicle" while he was reporting on the AIDS crisis before he died of AIDS himself. Shilts reporting work was made into a major motion picture, "And The Band Played On." (See previous posts Randy Shilts 'Reporter Zero' on Logo (3/10/07), OSU mentioned in The Advocate 45th anniversary issue (8/18/12), Advocate Touching Your Lifestyle 1976 (9/16/06), Wall Street Journal 1975 Advocate Story (7/8/06)) and Advocate 40th anniversary issue (9/11/07)

Decades ago, when I still exhibited the arrogance of youth, I thought that reading the obituary page was something that only 'old people' did and so I would rib my mother about her constant reading of obituary pages. However, I must now be "old" too because I am not only reading the obituary page, but I now understand why I my mother did it. My mother's stated reason for wanting to read the obituary section of the newspaper was so that she "could keep up with the town gossip," but I now realize she probably read it for the same reason I do now -- to keep track of friends and acquaintances.

My older, retired neighbor, who lives across the street from me, explained her reason to me was because she and her husband know everyone in town and they were both getting of the age when many of their friends were passing away and she didn't want to miss reading about it in the newspaper.

A few years ago when I was working with an estate attorney to button up my estate plans, part of her process was for me to write an obituary for my friends and family to use, if they wished, and so it was that around then was when I started to notice the obituaries of people who I had worked with over the years. (See previous posts Obituary for Thomas Kraemer (1/4/12) and OSU Foundation Magnus Hirschfeld Fund Agreement (1/4/12) for more on my estate plans)

I more recently noticed how both the history of the Corvallis college town and Oregon State University were epitomized by three obituaries of people who had touched my life over the last half of a century.

The most recent obituary of these three was for Bob Adams, who was the 10th employee of the consulting engineering firm CH2M-Hill that started in Corvallis, Oregon, where he was born in 1924 and graduated with a degree in Civil Engineering from Oregon State University in 1948 after serving in the Navy during World War II. At OSU he became a member of Σ Φ Ε Fraternity (Capital Greek letters written in English as Sigma Phi Epsilon) and later became a lifelong member of the Corvallis Lions Club. (See Obituaries: "Robert R. Adams 1924-2016," Gazette-Times, Aug.17, 2016, p. A4 posted Aug. 16, 2016) His funeral was held at the historic Corvallis First Presbyterian Church, Est. 1853, 114 SW Eigth Street, Corvallis, Oregon and was streamed live on the Internet. (See First Presbyterian Church Corvallis, Est. 1853 (History page accessed Aug. 19, 2016), Bob Adams memorial service and reception Friday, August 19, 2016, 2:00 pm accessed Aug. 19, 2016, "Live Streamed Worship - Bob Adams memorial service and reception," accessed Aug. 19, 2016 2 PM and "Live Streamed Worship - Bob Adams memorial service and reception," accessed Aug. 19, 2016 2 PM at First Presbyterian Church Corvallis)

My first memory of Bob Adams was when he spoke to OSU students who were interviewing with his firm for engineering jobs and I was impressed by his "home grown" approach to things, as locals like to call it.

The second obituary that epitomizes Corvallis history is of a former colleague who taught me about the politics of disability (see her obituary Lynn Andrews Gibson (Dec. 18, 1956 -- Feb. 16, 2016) posted Feb. 26, 2016) as she suffered from multiple sclerosis (MS), which is a neurological problem that only a few decades ago was considered the "faker's disease" because of its widely disparate symptoms that doctors did not believe were possible to suffer from. This skepticism did not change until MS could be diagnosed more scientifically diagnosed with modern brain imaging technology, such as CAT scans and functional MRI machines that can show how multiple regions of the brain that are not functioning.

I learned from her how most doctors are trained is to look for diagnoses that are explained by a single cause and have a single effect, which are measured by blood tests, brain images or other medical tests such as a physical exam. Hoever, if a test doesn't exist yet, then the person is not ill as far as doctors are concerned, even if they are falling over for no reason, which doctors will usually dismiss as being due to a psychological or psychiatric disorder called somatization or worse, due to malingering, the legal term fo "faking it" for some personal gain from the system. Many early victims of HIV and AIDS suffered from this kind of assumption because there was not test for HIV and no proof that HIV caused AIDS, which led many doctors to dismiss their disability as an attempt to rip-off the disability insurance system.

For example, I witnessed her and other Hewlett-Packard employees' dealing with third party disability administrators who had been hired mostly to minimize the costs to her employer, instead of helping the employee continue to contribute at work. She was virtually blind, in a wheelchair, and unable to walk, before anybody would finally admit to the fact that she was too disabled to work and that she was deserving of the generous permanent disability insurance benefits that were provided by our employer.

Her experience with MS highlights how doctors can be blind to the reality of complicated medical disorders that have not yet been identified because medical technology lacks a scientific test to detect them or measure it. I believe the so-called psychiatric disorders that most doctors treat as not being real and "all in the head" will someday have a scientific test and explanation for it, similar to how the test for HIV and its linkage to AIDS was eventually developed by medical science.

For example, it is now well known that so-called "psychiatric symptoms" are common with many metabolic disorders, such as diabetes, but these symptoms are not yet easy to measure or trtreated as can be a diabetic's blood sugar level. As a result, symptoms often get ignored by medical doctors who dismiss the symptoms as being "all in the head." The metabolic system in the human body is more complicated than an electronic digital computer and it can exhibit strange and buggy behavior just like computers commonly do. Anybody who has debugged a computer knows that it is too easy for engineers and technicians to dismiss all problems with a computer program as being the fault of stupid users, instead of going to the trouble of digging into the design to figure out the complicated sequence of events that must occur for a defect to surface.

As captured in the above two obituaries, Oregon State University, the CH2M-Hill consulting engineering firm and Hewlett-Packard have had dominated the small town of Corvallis, population 50,000, including the more than 20,000 college students, for more than half of a century. There has been a cross fertilization of students and University researchers.

When I graduated from OSU four decades ago, I was fully expecting to move elsewhere for a job, but was lucky to land a job at the brand new Hewlett-Packard handheld scientific calculator division that HP had just moved up from Silicon Valley to Corvallis to keep with up with customer demand for this wildly successful product line. In fact, Steve Jobs, founder of Apple COmputer, was in love with this HP product and it inspired him to produce the Apple PC's and iPhone smart phone. In fact, Steve Jobs successfully hired some HP engineers to help him create his empire, and he tried to recruit me when I showed him in 1982 the HP prototype of a handheld cell phone with an LCD calculator display, along with the Objective-C dynamic linking programming solution HP had devised with a thrid-party company, which eventually became the basis for iPhone Apps.

The third obituary that epitomizes the history of Corvallis and HP was the one of "Ronald Ward Keil" (1940-2014) posted Aug. 16, 2016, who was the first engineer I was assigned to work with at HP in HP's research and development lab in Corvallis. (also see short version of obituary of "Ron Keil," posted Aug. 15, 2014)

Ron Keil had been an engineering college professor before coming to HP, where he was often made fun of as being too analytical by the more seat-of-the-pants engineers who like to learn by cutting and trying things out instead of over analyzing them. As his obituary documents, he retired from HP at the age of 60, and then went on to work as a Professor of Mechanical Engineering at Oregon State University for ten years, until retiring at the age of 70. Of course, this made him one of the retirees who are called "double dippers" because they get full retirement packages from two places, in his case the standard HP retirement package in addition to the very generous State of Oregon PERS (Public Employee Retirement System) that likely paid for all of his medical expenses before he tragically died of cancer just a few years into retirement. I can confirm that engineering students loved him for his practical engineering knowledge that he acquired while working in industry, which he could share with students who hated the typical engineering professor who is super theoretical and disinterested in the details of actually building something and making it work.

I accidently stumbled into Ron's obituary while working on an estate plan. (See previous post Obituary for Thomas Kraemer (1/4/12 revised 8/19/14 accessed 8/18/16))

Finally, an example of an obituary I missed because it wasn't printed locally, was the one for my mother's younger sister, Ann Baldwin Heck, published in The Washington Post on Oct. 1, 2015. She was born in 1931 and I recall visting her every summer when I was a kid -- my mother would take me and my sister to visit with both her and my Grandmother who lived in an an apartment building literally across the street from the U.S. Capitol building in washington, D.C. My grandmother's building was full of U.S. Senators and Congressmen who she would greet on a first name basis, and I would get a chance to learn about government service from her friendly neighbors. I never found out if she read the obituary page or not!

Thursday, September 15, 2016

OSU's endowment threatened by Wall Street and Congress

Berlin university students carrying away the library from the home of Dr. Magnus Hirschfeld on May 6, 1933 for a May 10-11 Nazi book burning. New York Herald Tribune, May 17, 1933

PHOTO: Berlin university students carrying away the research library from the home of Dr. Magnus Hirschfeld (1868-1935) on May 6, 1933 for a May 10-11 Nazi book burning, (New York Herald Tribune, May 17, 1933). (See previous post OSU Foundation Magnus Hirschfeld Fund Agreement (1/4/12), which I named in honor of Dr. Magnus Hirschfeld, and also my previous posts "PBS features gay Nazi Joseph Goebbels" (5/29/2006), where I mentioned the May 11, 1933 Nazi book burning after the May 6, 1933 plundering of the sex research institute, and Magnus Hirschfeld Book notes 37 to 39 - final post (11/2/2010) that includes a list of the previous posts on Hirschfeld's book.

Oregon State University asked 15 firms to bid for its $505 million fund this year, selecting a division of New York-based Perella Weinberg Partners to replace consultant Mercer, a unit of Marsh & McLennan Cos. according to an article by Michael McDonald , "Asset Management, Wall Street Bids for Endowment Billions," Bloomberg Businessweek, Sept. 5-11, 2016, p. 35-37, online as "Wall Street Redoubles Fight to Manage $100 Billion at Endowments," posted August 29, 2016, which also linked to related stories by Janet Lorin, "University Endowments," posted Aug. 29, 2016 and Janet Lorin, "The Pill That Made Northwestern Rich," Businessweek, Aug. 22-28, 2016, p. 39

Both of these business articles on university endowments prompted me to write the following opinion piece for the local professional newspaper in my college town:

As Oregon State University starts up the Fall Term of 2016, some members of Congress are proposing to tax OSU's endowment, which is worth over a half-billion dollars, as a way to pay for Obama's noble goal of free tuition at two-year community colleges.

Concurrently, Wall Street has been aggressively competing for a cut of the billions of dollars held in university endowments, including the one at OSU that in April selected the bid of a New York-based asset manager Weinberg Partners to run OSU's portfolio, according to a story by Michael McDonald in the Sep. 5-11, 2016 print edition of "Bloomberg Businessweek" magazine.

Wall Street "asset managers" promise a better return for an undisclosed, but estimated annual charge of roughly one percent of assets under management.

"Businessweek" quotes (on p.36) a University of Michigan business professor who cautions how this situation "is an old recipe for disaster and embarrassment."

I learned firsthand about the importance of endowments when I witnessed how the genesis of Silicon Valley (located in the San Francisco Bay Area) was fueled by Stanford University's endowment, now worth $22.2 billion dollars, while I was leading advanced research programs at Stanford for Hewlett-Packard, which is a company started by Stanford alumni Bill and Dave and whose offices were literally located on Stanford's land.

City of Corvallis leaders during the 1970's sought a similar synergy between OSU and HP, which at the time included the 1954 OSU electrical engineering alumnus and soon-to-be HP President John Young, but anti-growth Corvallis voters almost prohibited it from happening because they were still suffering from problems created by the rapid growth of Corvallis after World War II, which were problems much worse than those related to the more recent doubling of enrollment at OSU.

Four decades ago I was fortunate to personally benefit from a then scarce OSU endowment, which allowed me to obtain a graduate degree debt-free, without having to also work as a "Teaching Assistant," because it paid me as a "0.5 FTE Research Assistant."

After personally benefiting from an OSU endowment and then experiencing the importance of Stanford's endowment, I decided to become the founding benefactor of the OSU Foundation Magnus Hirschfeld Fund for multidisciplinary research at OSU in all academic disciplines, for example, research in subjects disparate as animal science and theoretical computer science.

I named this Fund in honor of Dr. Magnus Hirschfeld, whose Berlin research library was infamously burned by Nazis in 1933 -- an atrocity that my grandfather vividly recalled from when he was a visiting research professor of chemistry at Berlin University.

I am not a billionaire and all of my ancestors died almost penniless, therefore my initial OSU endowment is relatively small, but I am hoping it will inspire a generous addition to it by a billionaire who also cares about research at OSU.

Although it is true that research paid for by Stanford's endowment has led to companies, such as HP, Intel, Apple Computer and Alphabet Google, paving over orchards previously used to grow oranges and McIntosh apple trees between San Jose and San Francisco, I sincerely believe that a larger OSU endowment would not necessarily cause a similar urban area being built between Corvallis and Portland.

In fact, I'm planning on Corvallis remaining as a nice, small college town because I plan on living here the rest of my life.

Finally, while it is also true that much of OSU's endowment is kept in separate funds that are legally bound by contracts for specific purposes, it still must be protected from Acts of Congress and Wall Street profiteers.

(Quoted from Thomas Kraemer, "As I See It: Protecting Oregon State's endowment," Gazette-Times, Sep. 15, 2016, p. A7)

University endowments can be funded many ways other than rich billionaires, for example, over the last decade the Northwestern University's endowment of nearly $11 billion dollars grew from less than half of that thanks largely to the windfall of money they are receiving from their research that led to the Lyrica drug research, according to the article by Janet Lorin, "The Pill That Made Northwestern Rich," Businessweek, Aug. 22-28, 2016, p. 39.

A related issue for OSU is the possible drainage of funding toward the needs of a new campus that is being set up in Bend, Oregon, which is mentioned in the newspaper editorial by Mike McInally, "Think Too Much: Why OSU's Bend cmapus matters here," Mid-Valley Sunday Editorial page of Gazette-Times, Sun. Sep. 11, 2016, p. A8, which included a discussion of enrollment numbers at OSU -- see below. (Note: this was printed in the Suday paper, but it wasn't available online until Tuesday.)

One student praised the new OSU Bend, Oregon campus for having "Room for research," which was a sub-headline in the print edition of the article by Anthony Rimel, "OSU celebrates opening of Cascades Campus," posted Sep. 14, 2016.

See the following links and previous posts of interest:

Monday, September 5, 2016

High school jocks' homoerotic hazing not charged as a sex crime

Photo of Oregon sodomy laws circa 1951 in the book by Donald Webster Cory, 'The Homosexual in America,' Greenberg, 1951, p. 289

PHOTO: One of the former Oregon laws against homosexual sex was "OREGON 23-910. Sodomy" that stipulated: "If any person shall commit sodomy or the crime against nature, or any act or practice of sexual perversity, either with mankind or beast, or sustain osculatory relations with the private parts of any man, woman or child, or permit such relations to be sustained with his or her private parts, such person shall upon conviction thereof, be punished by imprisonment in the penitentiary not less than one year nor more than fifteen years." (Aas quoted in the famous book by Donald Webster Cory, "The Homosexual in America," Greenberg, 1951, Appendix B, p. 289. This is book is frequently recalled in reminiscences by gay people who came of age in the 1950s.) See previous posts Oregon blue laws circa 1950 (9/7/06 and Oregon sodomy law invoked in sugar daddy lover spat (11/23/14)


My local professional daily newspaper and several local TV channels' newscasts recently reported the story "Coach, six Philomath football players, cited in 'aggravated hazing' case at football camp," posted Aug. 30, 2016. My local newspaper also ran the related story by Jim Day, "Anti-bullying policies required by state law," posted Aug. 30, 2016.

I was surprised that the Philomath football players were charged with only Class A or Class B misdemeanors, instead of being charged with sexual assault or some other sex crime, given they are accused of "contact with the anus or anal area (or) aggressive contact with the testicles," according to the Benton County District Attorney John Haroldson, as quoted in the Gazette-Times Aug. 31.

Oregon's Legislators revised the State's blue laws in the 1970's to legalize consenting sex between adults, but they carefully left in place laws against all forms of nonconsensual sex, especially when minors are involved.

In my experience, most people will, at first, deny that this type of behavior is homoerotic in nature and claim it is "normal guy locker room humor," but they will see it as being homosexual after viewing the type of videos that are commonly shown in downtown San Francisco gay bars and sex clubs, which feature naked guys in gym locker rooms and scenes of dominance and submission of Freshman plebes' initiations to the team.

Sadly, largely due to Americans' homophobia and sexual prudishness, high school coaches are forbidden from educating students by showing them these videos, as a method to prevent future sexual assaults.