The graph below is from the Brookings Institute in a blog post, Rising Inequality in Postsecondary Education. But I found out about it via Matt Yglesias who is on a mini-jihad against those who would donate to the top tier “name” schools, Seriously, Don’t Give Money To Fancy Colleges. What the graph shows is that poor kids are under represented even in the moderately competitive schools, much less the elite institutions.

My opinion is that one is likely to get a worse education at the elite colleges. The only reason they are thought to be good is only the very best and and best prepared students are allowed in. I suspect you could take that subset of students, have them do nothing but drink beer for four years, and they would turn out quite well. That’s especially true given that the vast majority of them are from well-to-do families, their careers would be set regardless. The fact is that having a diploma with “Harvard” printed on it means a whole lot more than having a Harvard education.

The larger point is that the elite institutions perpetuate the existing social order by giving further advantages to the already advantaged. Yet they do it in such a way as to give themselves plausible deniability. Just as the Republican Party can trot out a few black conservatives as an argument that it isn’t racist, Harvard can trot out a few poor students as an argument that their primary mission is something other than reinforcing the status quo.

As Yglesias puts it:

This all comes back to a point I have made many times before: democracy cannot exist in an economy that isn’t reasonably equitable. One of the primary uses of a person’s wealth is to improve the prospects of his children. There’s nothing wrong with that; we are mammals, and that’s how our brains are built. But when one man has billions and another man has nothing, there can’t be any notion of equality of opportunity.

Look at that graph again: 70% of the students at elite colleges come from the upper class. That isn’t just because those in the upper class can afford the prices at these schools. It is also a reflection of the fact that the upper classes have given every other advantage to their children for two decades before that. It starts even before they are born, in the form of better prenatal care. So it’s no surprise that most of those 70% also have high SAT scores—they’ve been invested into their whole lives in ways that simply aren’t available to poor children.

All of this comes from hedge fund manage Kenneth Griffin’s recent $150 million gift to Harvard. Seen clearly, this isn’t about helping the rich; it’s about oppressing the poor. But what would you expect from a Wall Street billionaire?

As you’ve probably heard, the 2008 transcripts of the Federal Reserve Open Market Committee (FOMC) were released last week. They allow us to see for the first time what all the Big Thinkers thought about the financial crisis and housing bubble in real time. And the picture is not pretty. It is also not surprising. As always, most of the people on the FOMC were primarily interested in inflation, even as the economy was in free fall.

I think it is best to think of the Fed in sociological terms. All the people on the board are members of the power elite. They never have to worry about losing their standard of living. But even more important, they don’t have any friends who have to worry about theirs either. As long as the Fed members keep inflation low, they will always be welcome at the parties of the power elite. Unemployment is something that only affects the commoners. The power elite only cares about it in as much as a very high unemployment rate would hurt profits and possibly start a revolution. So the Fed pretty much only cares about inflation, regardless of its mandate to keep unemployment low.

The reason that the financial crisis was so damaging to the economy is that it brought on the bursting of the housing bubble. But apparently, few at the Federal Reserve were aware of this. MarcusCMarcellus put together this video of clips from the years leading up to the crisis in which Ben Bernanke repeatedly claimed that there was no housing bubble:

But as Dean Baker points out, even as the housing crisis was upon us, the Fed was mostly ignorant:

This is like watching storm clouds gathering and ignoring them. But it is important to remember what’s really going on. The storm clouds were gathering, but not for the power elite. So the safest thing for the Fed to do was to ignore the signs that thing were getting bad for the working class and concentrate on making sure that nothing would harm the wealth of the elites. And history bears this out. What is much more surprising is that people like Janet Yellen and Eric Rosengren had any interest in what was best for the economy overall.