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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. Now, we'll talk to Scott Bok about two really big things happening in our country. One is the set of topics suggested by the title of Bok's new book, Surviving Wall Street: A Tale of Triumph, Tragedy, and Timing. That's about what's happened in the stock market over the last generation and its effect on Wall Street and Main Street alike. Very much in the news with the volatility of the last month, right?

Also, Scott Bok was chair of the board of trustees at the University of Pennsylvania when University President Liz Magill resigned after that congressional hearing, where she and two other Ivy League presidents gave a legalistic answer to Congresswoman Elise Stefanik's question about whether calling for the genocide of Jews would violate their university's code of conduct. Bok resigned too.

Two chapters of his book address that and the bigger picture of what's happening between the government and higher education that he thinks is the context. In fact, Scott Bok and Liz Magill will be doing a book release event together at the New York Public Library, Main Branch, 455 Fifth Avenue, the one with alliance, tonight at six o'clock. Mr. Bok, thanks for joining us. Welcome to WNYC.

Scott Bok: Thanks. It's a pleasure to be here.

Brian Lehrer: Your book about surviving Wall Street now includes two chapters I see on Penn and President Magill and higher education. Did you add them because they were so pressing to a book you had basically otherwise written about something else?

Scott Bok: Well, I think when the event Penn first came up, I thought it was somewhat of a different story. I thought it might be an interesting epilogue really. The book is all about leadership through crises, five different crises that hit Wall Street over the course of the last quarter century. Over time, I really came to think that it was more the culmination of the story really. It was the ultimate evidence of the power, the influence of Wall Street.

The situation at Penn felt a lot like a corporate takeover attempt, which is something I worked in throughout my career. Lastly, there were many corporate takeover-type tactics that were used. I thought it really, in some ways, is a culmination of a book about a Wall Street that went from very, very small and hidden to most Americans at the time I began four decades ago to something that really is pervasive throughout American life today.

Brian Lehrer: Are you saying that significant people on Wall Street like yourself have wound up with too much influence over higher education because of who sits on boards of trustees?

Scott Bok: I think, arguably, that is the case. I think, for years, universities have filled their boards predominantly with donors. Those donors, given the enormous success of Wall Street over the last few decades, have increasingly come from Wall Street. That was all fine. In almost 20 years on the Penn board, I didn't see any real controversy, any real disagreement or debate. It was a very unified group, very forward-looking and positive group, and things were going very well in elite higher education. When a crisis came, it did come to the fore that there is a lot of influence among a fairly narrow set of people on these boards of trustees.

Brian Lehrer: Let's talk about some aspects of that. Here's the clip for reference of President Magill responding to Congresswoman Stefanik in that consequential moment. The question was whether calling for the genocide of Jews would violate Penn's code of conduct.

Liz Magill: If the speech turns into conduct, it can be harassment, yes.

Congresswoman Elise Stefanik: I am asking specifically calling for the genocide of Jews. Does that constitute bullying or harassment?

Liz Magill: If it is directed and severe or pervasive, it is harassment.

Congresswoman Elise Stefanik: The answer is yes?

Liz Magill: It is a context-dependent decision.

Brian Lehrer: A context-dependent decision. I know you've talked about this before, Mr. Bok, but with this much hindsight now, what happened there in your view?

Scott Bok: Look, I think as I said really at the time, it was a case of being perhaps over-prepared and over-lawyered and giving somewhat of a legalistic answer. Technically, the question was, does it violate the student code of conduct? The student code of conduct at Penn explicitly said that students may not be disciplined for speech alone, that it tracks the First Amendment, very, very broad ability for people to speak out.

The question obviously is about something that President Magill never heard called for on the Penn campus and, certainly, I never heard in several decades of being involved at Penn. That very theoretical, very extreme question against the context of a code of conduct that said you can't be disciplined for speech, the right answer really was still probably the more emotional, political, moral one of essentially saying, yes, we've never seen that happen here. We don't think that will happen here. We have a very, very broad right to free speech in our student code of conduct. Still, I think the right response would have been to come down to yes.

Brian Lehrer: President Magill resigned under pressure after that as we all know, but you resigned too as chair of the board of trustees. Why was that?

Scott Bok: Well, I felt like the board had really become unmanageable and very, very fragmented again after 20 years of being a very, very unified, collegial place that had become very fragmented. I think there was an issue, frankly, with lack of confidentiality. I wanted to have the ability to speak out more than you can as a representative of an institution.

If you're the CEO or the chair of an organization, I have been of many over time, you're really constrained as to what you can say. When you speak, you speak for the whole organization. There were things I wanted to say about what was going on at universities. I thought I was better able to say those outside of that role. I followed President Magill's resignation a short time after with my own.

Brian Lehrer: Now, you've said, I've seen you quoted anyway, saying Magill didn't come up with the student code of conduct. Does that mean you think the code of conduct itself was wrong in some important way, but she wasn't responsible for that?

Scott Bok: No, I think that's pretty typical student code of conduct. Frankly, it's state-owned universities that really operate under the constraints of the Constitution. You do have very broad First Amendment rights. Speech really is free. What she was referring to, and perhaps an overly technical and legalistic sort of way, was that where the lawyers-- thinking back to my law school days now, where the lawyers draw the line is where pure speech turns into something more like conduct.

It can be extortion. It can be a threat. It can be shouting fire in a crowded theater. Those things are not protected by the First Amendment. I don't think there's anything wrong with the student code of conduct having a very broad right to free speech. In the very extreme theoretical case that Congressman Stefanik put forward, I think a better answer would have focused probably on the moral as opposed to the technical way that would play out.

Brian Lehrer: I guess the way that some people reacted to that was if it had been a question posed in the same way with the same code of conduct in place about any other group or many other groups, if that same question had been asked about Black people or Latino people or LGBTQ people or women or many others on the receiving end, it would have been clearer. Some people felt that there wasn't as much concern about anti-Semitism. Have you heard that?

Scott Bok: I have heard that. It's some speeches more preferred than others. I honestly think that's overplayed, though. Look, you don't have a lot of people shouting racist things or anti-Semitic things or homophobic things on campuses. Look, it sometimes happens. Campuses are big organizations. More like cities than corporations, right? Thousands and thousands of people that aren't really under your control as a president or a board.

We would occasionally have people come. I remember a specific example of a particularly religious person of a point of view that homosexuality was wrong. They would come and rant and rave on the main drag through campus and say terrible things, outrageous things.

We chose to ignore it. We obviously made sure people were safe around that. We obviously condemned that sort of thing regularly. I'm not sure the answer would have been all that different. I just think it was a very, very difficult time. A lot of stress, a lot of anxiety. A very, very tough five-plus hours of cross-examination in front of Congress that really was designed to elicit some kind of moment that could be captured and used on social media. At the end of the day, that's what happened.

Brian Lehrer: Listeners, you Penn students or alum or faculty or anyone else, your questions are welcome for former Penn board chair Scott Bok on these Trump administration and university issues. We're going to pull back and get his take on beyond that moment involving former Penn President Liz Magill, what he thinks is going on nationwide, or on the finance sector issues, which are the majority of his book, Surviving Wall Street: A Tale of Triumph, Tragedy, and Timing. 212-433-WNYC, 212-433-9692. You said the context of the Penn story is a battle for the soul of the university, maybe all universities that goes way beyond the protests on the campus after October 7th. Here's a clip of Vice President Vance. This is excerpted in an On the Media episode called The Harvard Plan.

Vice President JD Vance: We have to honestly and aggressively attack the universities in this country.

Brian Lehrer: Obviously, that was with the On the Media theme underneath, part of a montage at the beginning of an episode. Is that the context in which you mean soul of all universities? There's the vice president of the United States saying we have to attack universities aggressively.

Scott Bok: Yes, that clip sums it up well. What I wrote in my book and I wrote it, of course, before the election, before the very recent events was that I thought there was much, much more at stake really from the very beginning than free speech and anti-Semitism. It felt like there was a real attack against so-called woke universities, against diversity, equity, and inclusion, and things like that really to try to fundamentally change the way higher education, particularly among the elite schools, works in America.

I think no one could argue with that anymore. When I wrote it, I thought some people might think when they read that, "Oh, that's a bit of an exaggeration." Clearly, if you look at what you just played from the vice president or you look at what's going on against Harvard right now, clearly, everything about our elite higher education system is at risk and in play right now. We'll see where it goes from here.

Brian Lehrer: What's your own take on DEI and how much it's justified or what that term even means to the university as opposed perhaps to how the administration uses it?

Scott Bok: It's a great question. I think some history is helpful. A lot of people, when they talk about DEI and how it's gone too far, et cetera, they're often referring back to some sort of golden age of meritocracy. The reality is that there are some Ivy League schools that didn't even admit women until the late 1960s. Clearly, Blacks were discriminated against. There were many Ivy League schools, not Penn, but many that had quotas on Jewish admits in the post-World War II period.

There's a long history of not being a meritocracy, of having all kinds of biases against certain groups and in favor of some groups, particularly alumni children. When I went to Penn, I lived on a floor of 25 students. Every single one was white. There wasn't a person who was Black, Latino, or of Asian or Indian history. There was an international student. There wasn't anybody from a very monolithic white group. I think, did the university take action over time to try to change that, to try to increase diversity? Absolutely, it did.

I think that's a good thing. Did it go too far? Personally, I think it maybe became, in some cases, too bureaucratic or maybe too focused on language and particular words and phrases. The substance of it I don't think went too far. Penn has never had a Black or a brown president elected. When I left, there were 12 deans of the various school of law, of medicine. One Latino and one South Asian. Other nine were white. It's not like the whole university got turned over at any level to people of color, but there were efforts to change it from the days when it effectively was almost entirely white like when I was there.

Brian Lehrer: How much of a revolution in what gets taught or codes of conduct or hiring or admission practices do you think the administration is after?

Scott Bok: Well, I think quite a lot. When they want to talk about Columbia bringing one department under supervision from the outside, changing the way admissions take place, having more aggressive discipline and constraints on faculty, tenured faculty, as well as students and others, I think they're looking for quite a lot. They've got a very, very big stick in the sense that over the course of the decades, they really developed a symbiotic relationship between the federal government and universities that not only provide student loans, which is wonderful to help provide access to more students, but there was tremendous funding of research.

That created all kinds of technological advances and, more importantly for all of us, treatments for cancer and mRNA vaccines for COVID and all kinds of things like that. If you take away much of that research funding, if you do something like a higher-endowment tax, the nuclear weapon really is if you take away tax-exempt status, you can really almost put these universities out of business. Now, I certainly am hopeful it won't go that far. I'm pleased that Harvard is standing up and fighting for its rights and all that it does, I think, for our country. Exactly how it plays out is hard to tell.

Brian Lehrer: Yes, Harvard seems to be the focus of the President's attacks more than others at the moment. He is threatening to revoke their tax-exempt status, which Harvard says he doesn't have the legal power to order. What's the law as you understand it? I realize you're a finance guy in your background, not a lawyer. Maybe you're a lawyer too. I don't know, about what qualifies a school for that status, including ones with vast amounts of wealth.

Scott Bok: I actually was a lawyer at one point, but I'm certainly not an expert on this topic. I'll say, look, there are plenty of nonprofit charitable organizations out there, all kinds, small, medium, and large, private foundations, all the way up to the biggest universities. The general rule is your tax is exempt if you're operated for philanthropic purposes and a not-for-profit. I think if you look at what any of the elite schools, private schools do in America, they're all about that. They're not trying to make a profit.

They're trying to raise whatever money they can to provide even more access. They're trying to increase financial aid, which decreases the net cost of students to attend. They're doing all kinds of research on things that won't pay off for years or maybe decades. I think these leading schools meet every single criteria there is for what is a nonprofit institution that ought to have tax-exempt status. I certainly am hopeful Harvard will prevail in that because it's only one of many universities that would have that at risk if it were to lose it.

Brian Lehrer: Mary in Fairfield County in Connecticut, you're on WNYC with former UPenn Board of Trustees Chair Scott Bok, who is also the author of the new book, Surviving Wall Street: A Tale of Triumph, Tragedy, and Timing. Hi, Mary.

Mary: Hi. First, I want to thank Mr. Bok for stepping down and standing by his own ethics and what was happening at the time. I wanted to follow up. I had two questions for you, actually, Mr. Bok. One was you had said it was similar to a corporate takeover. Many of us who work in the corporate world know some things about corporate takeovers. How was the situation at Penn like a corporate takeover? If you could explain in more detail. Maybe you go into detail in your book. Then a separate question, very distinct. If you have any thoughts on Columbia and actually having a board member running the institution right now rather than a separate role as a president. I'll take your response off--

Brian Lehrer: Off the air.

Mary: Off air. Thank you.

Brian Lehrer: Off the air, we say. Mary, thank you very much. Mr. Bok, I don't know if you were able to hear the beginning of the question. Basically, she's asking if you could expand on what you said early on in the conversation about what happened at Penn being like a corporate takeover. I don't know that we have Scott Bok's line reconnected. I know we were having a little--

Scott Bok: Can you hear me?

Brian Lehrer: Oh, now, we can hear you. Go ahead. Sorry about that.

Scott Bok: Yes, I was going to say that one increasingly common form of corporate takeover is where so-called "activist shareholders" try to get control of a board of directors. They use public relations. They use solicitation of shareholders. The university equivalent would be of donors. They use the courts. They use political influence where they can use all those kinds of tools to try to get control of a board. In that respect, the situation in Penn and at some others is really very, very much like what I witnessed in the corporate world for many years.

Brian Lehrer: Your book event with Liz Magill tonight at the New York Public Library. Six o'clock by the way, listeners, if you're interested. Why did you decide to include her with you for the book event when the book is ostensibly about Wall Street?

Scott Bok: Well, she'll ask me a few questions about Wall Street, of course. Then certainly, we'll discuss why it is that I thought the whole Penn story belonged in a book about Wall Street, but we'll spend most of the time. Look, I realize that right now, what's front and center in our country, one of the key issues is what happens to elite higher education in America. I realize that notwithstanding, that's not a huge part of the book. It is a very important part of the book. I thought to have her there, she'll ask me some questions. I'm going to ask her some questions too. I think the audience will be interested in hearing from both of us on these topics.

Brian Lehrer: Listener critical of DEI writes, "DEI has resulted in seeing every issue through an oppressor, oppressed dichotomy, absence of critical thinking, and discussion of complex issue." I'm going to play a related clip. This is also from that On the Media episode. Very short clip of the conservative activist, Chris Rufo.

Chris Rufo: True free speech has been curtailed on many campuses and conservative voices have been shouted down.

Brian Lehrer: I'm sure you heard that when you were chair of the board of Penn even before October 7th and everything that came after it. Have you looked closely at that grievance by people on the right?

Scott Bok: I have. Look, I know examples. There was a judge, a conservative judge, who went to Stanford University and got shouted down. There are examples of that here and there. At Penn, we did not have that. I did not see anybody, student, faculty member, or other be disciplined for speech or shouted down or unable to be invited to campus. Really, the whole almost two decades I was on that board.

Penn, in fact, is a place that is, I think, fairly conservative, certainly, in its alumni base. The influence of Wharton makes it very connected to Wall Street and so on. Look, I hear maybe not all viewpoints are equally welcome at universities. Certainly, there's room for trying to open that up more. A sledgehammer effectively is being brought to bear in attacking universities in a way that really more like a very fine-tuning of the approach in my mind is appropriate.

Brian Lehrer: Actually, traditionally, you would get the opposite criticism also quite a bit, which is that with the influence of Wall Street, with legacy admissions, with many things that are the policies of the most elite universities, it was perpetuating a haves and have-nots society in the United States. You've heard that too, right?

Scott Bok: I have. Look, I think that's a legitimate claim. I think even at the height of DEI, I still think if I was an 18-year-old applying for admission, I would rather be the child of a couple of wealthy alumni who's white and some Upper East Side or Greenwich, Connecticut or something than I would be someone with the same scores who was Black from the South Bronx.

I just think that, yes, there was some kind of thumb on the scale in favor of people of color trying to increase diversity of the school. There remains even today, even now, that the Supreme Court has said you can't look at race as a factor in admissions. You can still look at alumni children or just very wealthy people or people who play sports that most American high school kids don't even have access to. It's kind of perverse at this point.

Brian Lehrer: Listener writes, "Should the response to the Elise Stefaniks of the world be to call them out for the disingenuous use of anti-Semitism as a right-wing cudgel to advance their own agenda rather than a true concern for student safety?" I think you've said something similar to that listener actually.

Scott Bok: I think that's true. Look, there have been many people. It's easier to make that argument if you happen to be Jewish. If you look at what Michael Roth, president of Wesleyan, or Chris Eisgruber, president of Princeton, or New York Times columnist Michelle Goldberg, or Masha Gessen, they've all made that point. My point is a little bit simpler one, which is simply that the agenda of those who went after Penn was far broader than just the question of anti-Semitism and free speech. It really included the way universities fundamentally operate.

Brian Lehrer: You've called on universities to stand together in opposition to the pressures from Washington. In what ways do you mean that? In what ways can they?

Scott Bok: Well, I think if they can speak out and support each other and demonstrate that this is not individual universities to be picked off one by one, I think they can be effective. Frankly, I think the fact that Harvard stood up quite aggressively, I would expect that they probably were encouraged by the fact that the presidents of places like Wesleyan and Princeton had spoken out even before them in a fairly aggressive way, concerned about the protection of what's value about American elite universities.

Courage is kind of contagious. You have one or two, you feel like, "Okay, I can stand up. I won't be alone. There are others here who agree with me. They're speaking out in eloquent ways to fight for what I think is also important." I think you can build up some momentum then and show this is a very, very broad issue. It's not a case of one university or one attack. It's really the entire system that's under threat.

Brian Lehrer: Are universities standing together or to what degree do you think they are? Columbia seemed to respond one way, Harvard another to the early round of threats here.

Scott Bok: Yes, I don't think the way Columbia responded really played out all that well for them. Harvard has taken a harder line. Many others rallied around that. I know there's petitions gone around that's been publicized where hundreds of university leaders have spoken out really on Harvard's behalf on this question of government interference with the way elite higher-ed works. That's everything from community colleges to Bible colleges to most-- I think seven of the eight Ivy League schools have signed that, so I think they are beginning to stand together.

Brian Lehrer: I want to thank you as we move to the last minutes of this segment for being so patient as I asked you so much about the university situation and not that much about the majority of your book, which is the reason for your appearance. The book release, Surviving Wall Street: A Tale of Triumph, Tragedy, and Timing. Pick one of those Wall Street crises that you write about that you were there for and talk about what you think it meant to the people of the United States writ large and maybe ongoing. Maybe the dot-com crisis around the year 2000 or the financial crisis 2008. Pick your one.

Scott Bok: Well, they all have some similarities that they do affect Main Street quite dramatically. Wall Street is a place that really is historically a bit of a boom-and-bust place. Every few years, you go through some significant crisis. The global financial crisis, of course, of 2008 would have been the biggest. That took on Lehman Brothers and Bear and increased dramatically regulation on the industry. A lot of regular people get wiped out, right? Their homes are worth less. They can't sell their homes. They lose their jobs.

There's a lot at stake for Main Street in these Wall Street crises that come along seemingly every several years. I was there through five of them. My firm battled away through five of them. A theme of the book is the lessons learned as you go through those, both about how to see them coming, how to deal with them when they come. That's the reason for the word "surviving" in the title because most Wall Street firms that were in business when I began are long gone now.

That's notwithstanding the fact that Wall Street has grown dramatically over the last four decades. Still, most of them have disappeared over time. It is a bit of a survival game. What I proved really at the end of the book is that what's true of the for-profit sector, particularly Wall Street, is equally true for the nonprofit sector. They go through crises. It's a real test of leadership for boards and CEOs. That's what I write about.

Brian Lehrer: Are bubbles inevitable because of human nature? The people who lead Wall Street firms are supposed to be the smartest people in the world about when stocks are going to go up and when stocks are going to go down, and yet there seems to be this cycle of irrationally investing and then there's a crash.

Scott Bok: Yes, I think that is a function of the fact that very smart but very ambitious people come to Wall Street. They are obviously aggressive in trying to build their own career, their own firm, and there's a lot of leverage involved. That leverage works beautifully on the way up. It can really increase your gains. Unfortunately, it works very negatively on the way down.

It can lead to firms that are overextended or over-leveraged at the time a crisis hits can get wiped out. Whether that's Silicon Valley Bank and the most recent one or Lehman Brothers going back or Drexel Burnham and Kidder Peabody, a generation before that. There's a long history of that mentality. I don't think it probably ends. I think that's one of the interesting bits of the book is that you do have these recurring crises that just seem to be an inevitable part of the way Wall Street operates.

Brian Lehrer: What do you think about what's going on right now with the wild swings over the last month around the tariffs?

Scott Bok: Well, I think another interesting thing in the book where I talk about, over the course of my career, the Dow Jones went from 1,000 to 40,000. Obviously, an extraordinary period of wealth creation in America. That really was a period of globalization. I've worked for Morgan Stanley in London for part of that. The formation of the EU, the falling of the Berlin Wall, China joining the World Trade Organization, and really trillions of dollars of mergers and acquisitions, which my firm worked on, created these national and international global enterprises.

When there's a threat that says, "Hey, we might actually roll back that globalization," I think the market's really uncertain about how much downside there would be if that strategy is implemented. On days when they think it's going to be aggressively implemented, the market goes down a lot. On days when they feel like maybe there's going to be a compromise, the market bounces back.

Brian Lehrer: Is there a split there between the interests of Wall Street and the interests of regular-income Americans over the last, say, 30, 40 years? If it was in Wall Street's interest for globalization to proceed and the middle class in the United States at the same time has been hollowed out to the extent that it has, now, we have all this scramble where a lot of people who want to see somebody push back on Trump are happy that Wall Street is doing it. Who do we root for again when it comes to globalization? Is it weird?

Scott Bok: Well, personally, I think it's in everyone's interest. I'm from a very humble background in Michigan. I grew up in an area where most of my friends' fathers worked in auto factories. I'm well aware of that whole part of America. You look at what happened. That 40 times increase in the stock market, that's a lot of pension plans that benefited from that. That's a lot of small savings. That's a lot of small businesses. Yes, it is a dynamic economy. There are industries that go in and out of favor. There are new industries that spring up.

Certainly, we've had a lot of those in America. I think America has really pulled away from the rest of the world in recent years. We had a GDP per person. We had a stock market that was very comparable to Europe's if you go back a generation ago when I lived there working for Morgan Stanley. Since then, America's really pulled away. I think there has been a globalization, but I think America's been the biggest winner in that globalization. I think many investors are worried about what might happen if the whole system really gets unwound.

Brian Lehrer: Scott Bok, former chair of the board of trustees of the University of Pennsylvania as well as having had a career on Wall Street. His new book is called Surviving Wall Street: A Tale of Triumph, Tragedy, and Timing. Again, he will be doing a live event tonight with the former University of Pennsylvania president, Liz Magill. A book release event together at the New York Public Library, Main Branch, tonight at six o'clock. Thank you so much for joining us in advance of that.

Scott Bok: Thank you. My pleasure.

 

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