[Maybe Hope for unemployed humanists?] Municipal-Bond Dealer Hired English and Philosophy Majors

Richard J. Franke, who has died at age 90, specialized in tax-exempt securities as CEO of Nuveen and founded a humanities festival in Chicago

image (not from article), with caption: Piano Donated by Franke Family Fosters ‘Extraordinary Musicianship’ at UChicago’s Department of Music 

By James R. Hagerty, The Wall Street Journal, Apr. 28, 2022 10:01 am ET

Richard J. Franke was a history major at Yale before earning his M.B.A. degree at Harvard in 1957. 

Later, as chief executive of John Nuveen & Co., a Chicago-based fund manager specializing in tax-exempt bonds, he considered that history degree at least as important as the business training. He was more apt to quote Sophocles or Montaigne than any financial guru. He hired people with degrees in philosophy, English or theology as well as those with financial skills. 

Sophocles image from Wikipedia

The humanities [jb - see, note reservations ("humanistic" ones?) about this Wikipedia entry], Mr. Franke argued, were the best way to learn communication and critical-thinking skills, understand other people, and stay open to adopting new ideas as new information emerged. 

“Business leaders with a background in the humanities have a deeper understanding of themselves and others,” he said in a 2000 speech. 

Mr. Franke spread his secular gospel partly by founding the Chicago Humanities Festival, which since 1990 has used concerts, films and other performances to draw people into lectures and discussions they might otherwise skip. This year’s festival includes the filmmaker John Waters and the comedian Sarah Cooper. 

As a CEO, he declined to serve on other companies’ boards and instead devoted himself to nonprofits, including the Lyric Opera of Chicago, where he believed he could add more value. He led a book-discussion group for more than 35 years. 

Mr. Franke died April 15 at a hospital in New York. He was 90 years old and had recently broken a hip. 

Richard James Franke (pronounced Frank-e) was born June 23, 1931, and grew up in Springfield, Ill. His father, who left school after the seventh grade, was a dry cleaner and during the Depression provided startup capital for jobless people who wanted to set up small businesses. 

In 1949, Mr. Franke boarded a train for the trip to New Haven, Conn., where he enrolled at Yale. At the train station, he recalled, his father said: “Rich, I have taught you all I know. Now is time for you to go off on your own.” 

Yale was a cultural shock for a Midwesterner whose parents hadn’t gone to college. The prep-school set teased him for wearing the wrong clothes. Still, the liberal-arts education he got there enriched his entire life. 

After graduating from Yale, he served in the Army, which posted him in Colorado. He worked as a mailroom intern for Nuveen in 1955 and returned there after earning his M.B.A. In 1958, he married Barbara Easley, whom he had known since high school. 

Early in his career at Nuveen, he traveled the South to pitch local officials on the advantages of using tax-exempt bonds to finance infrastructure. “I had plenty of ambition and painfully few verbal skills,” he wrote in a memoir prepared for his grandchildren. “Slowly, I became better at presentation and even recruited a respectable amount of business for our firm.” 

In 1969, he joined Nuveen’s board. To show his commitment, he borrowed $100,000 to buy shares in the company. 

The timing could hardly have been worse. Nuveen, founded in 1898, was stuck with too many bonds as prices dropped. The value of his stock was wiped out, and Nuveen averted a collapse only by getting an emergency injection of cash from Investors Diversified Services Inc. As the new owner, IDS ousted most of the top executives but kept two, Frank Wendt as chief executive and Mr. Franke as executive vice president, to sort out the mess. 

IDS sold Nuveen to St. Paul Cos., an insurer, in 1974, and Mr. Franke rose to chief executive. Nuveen now is owned by Teachers Insurance and Annuity Association of America, or TIAA [JB -- coincidence?] ...

The market for bonds was difficult in the 1970s as soaring interest rates reduced prices for the securities. Even so, Nuveen returned to profitability and was in a good position to benefit from the long-term fall in interest rates that began in the early 1980s. The firm thrived as a manager of municipal-bond funds. Under Mr. Franke, Nuveen stopped making markets in U.S. Treasury bonds in 1980 to focus on municipal bonds. 

A narrow focus on tax-exempt bonds served Nuveen well for years but by the mid-1990s was sometimes seen as a liability. After Mr. Franke retired as CEO in 1996, Nuveen diversified into equity funds. 

Mr. Franke moved to New Haven, partly to maintain his connections with Yale. He was a fellow of the Yale Corporation for 12 years and was a life trustee at the University of Chicago. He wrote a 521-page book, “Cut From Whole Cloth, [[jb -- see]” on his family’s history. 

“You don’t retire,” he wrote. “You do something different.” 

Though he had spent a career in the bond market, he shunned credit cards and other types of borrowing in his personal life and refused to embrace online banking. 

Mr. Franke’s survivors include his wife of 64 years, Barbara Franke, two daughters and two grandchildren. In the memoir he wrote for his grandchildren, he recommended a rich diet of reading, including biographies and obituaries. 

For leaders of book-discussion groups, he advised holding sessions somewhere other than in members’ homes. “When we experimented with meetings in our homes, we found we had too much conversation about the house in which we met and the snacks we ate, when we were supposed to be discussing literature,” he wrote. 

Write to James R. Hagerty at bob.hagerty@wsj.com

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See also a recent Krugman column in the NYT (via email)

President Biden says that he is taking a “hard look” at student debt relief, which probably means that some significant relief is coming. For one thing, Biden promised relief during the 2020 campaign. For another, it’s one progressive priority he can address by executive action, which is important given the extreme difficulty of getting anything through an evenly divided Senate.

How much relief will he offer? I have no idea. How much relief should he offer? I’m for going as big as political realities allow, but I understand that too generous a debt write-off might produce a backlash. And I have no confidence that I know where the line should be drawn.

What I think I do know is that much of the backlash to proposals for student debt relief is based on a false premise: the belief that Americans who have gone to college are, in general, members of the economic elite.

The falsity of this proposition is obvious for those who were exploited by predatory for-profit institutions that encouraged them to go into debt to get more or less worthless credentials. The same applies to those who took on educational debt but never managed to get a degree — not a small group. In fact, around 40 percent of student loan borrowers never finish their education.

But even among those who make it through, a college degree is hardly a guarantee of economic success. And I’m not sure how widely that reality is understood.

What is widely understood is that America has become a far more unequal society over the past 40 years or so. The nature of rising inequality, however, isn’t as broadly known. I keep encountering seemingly well-informed people who believe that we’re mainly looking at a widening gap between the college-educated and everyone else.

This story had some truth to it in the 1980s and 1990s, although even then it didn’t account for the huge income gains at the top of the distribution — the rise of the 1 percent and even more among the 0.01 percent. Since 2000, however, most college graduates have actually seen their real incomes stagnate or even decline.

The Economic Policy Institute had a very useful analysis of this data just before the pandemic. Between 1979 and 2000, there was a rough match between growth in one measure of overall inequality — the gap between wages at the 95th percentile and those of the median worker — and its estimate of the average wage premium for college-educated workers. Since 2000, however, wage inequality has continued to rise, while the college premium has barely changed:

It’s not about the degrees.Economic Policy Institute

Furthermore, not all college graduates have had the same experience. Some have done pretty well, but many have seen no gains at all:

Graduating into inequality.Economic Policy Institute

I have my own version of this observation, comparing growth of incomes of households at the 95th percentile with those of the median male college graduate:

Good times for some, but not the typical male graduate.Census Bureau

Now, Americans at the 95th percentile don’t consider themselves rich, because they aren’t, surely as compared with C.E.O.s, hedge funders and so on. Nonetheless, they have seen substantial gains. On the other hand, the typical college graduate — who is, remember, someone who made it through and received an accredited degree — hasn’t.

So here’s how I see it: Much of the student debt weighing down millions of Americans can be attributed to false promises.

Some of these promises were scams pure and simple; think Trump University. Even those who weren’t outright cheated, however, were pulled in by elite messaging assuring them that a college degree was a ticket to financial success. Too many didn’t realize that their life circumstances might make it impossible to finish their education — it’s hard for comfortable, upper-middle-class Americans to realize how difficult staying in school can be for young people from poorer families with unstable incomes. Many of those who did manage to finish found that the financial rewards were far smaller than they expected.

And all too many of those who fell victim to these false promises ended up saddled with large debts.

Of course, there are many Americans who have suffered from rising inequality. I wouldn’t argue that college debtors are greater victims than, say, truck drivers who have seen their real wages plunge or families stuck in declining rural areas and small towns. And we should be helping all of these people.

Unfortunately, most things we could and should be doing for Americans in need — like extending the expanded child tax credit — can’t be done in the face of 50 Republican senators, plus Joe Manchin. Student debt relief, by contrast, is something President Biden can do. So he should.