Transcript
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Introduces the wave of pro-Palestinian campus protests and the students' calls for universities to divest from companies tied to Israel. It frames the question of whether divestment could create real pressure.
President Biden pressed for order across American college campuses where protesters are rallying against the war in Gaza tensions have been escalating between demonstrators and police leading to Violent clashes and arrests many of the recent campus protests are occurringat universities with million dooll endowments multi-billion dollar endowments I should say and among students demands is a call for their institutions to divest or end endowment investments in companies with ties to Israel their hope is that divesting createseconomic pressure that leads to changes in Israel's treatment of Palestinians so we asked CBS news reporter Eric Brown to speak to experts about those demands and their potential effects and whether any of this is even really possible so
Explains the specific divestment demands, including Israeli businesses, companies doing business with Israel, and defense manufacturers. It also compares today's movement with past campus divestment campaigns, especially anti-apartheid efforts.
Eric first let's start with the demands what are they yeah and I spent the day Don D John digging into this to figure out what are students asking for here what does this entail and what are the implicationso as you mentioned students want their universities to devest from Israel this means they want them to end their Investments with companies that have ties to Israel this of course in response to the ongoing Israel Hamas War nowspecific demands for divestment that varies from school to school but essentially we're looking at three things generally that students are asking for they want the universities to divest from Israeli businesses themselves businesses doing business with Israel and alsodefense related manufacturers and weapons manufacturers uh and so when we look at these three things we start to see this mobilization across the the United States and so we see this connection also with the pro Palestinian BDS movement
which stands for boycott devest and sanctions against Israel and they have their own list of targeted companies but we also see uh parallels drawn between protesters today and protesters in the 1980s college students advocating for their universities todivest from South Africa during aarth now even though those were successful in many cases experts warned that the global landscape the economic landscape was very different and the way that universities invested with different than two instead of focusfocusing on stocks as they were then now universities are focused with endowment managers asset managers on index funds tied to Wall Street private Equity Funds when you're dealing with private Equity Funds things get less transparent and so theglobal landscape is a lot different than it was in the ' 80s right it's so you're not just pulling it from a single stock it's mixed in with a whole bunch of other stocks let's imagine when you talk
Experts discuss whether university divestment would meaningfully hurt Israel or the companies involved. The segment argues that investments would likely just shift to other buyers rather than create major economic pressure.
to those experts let's imagine a school could pull itself out of this um what what would the effect be on Israel of that yeah so the economic impact according to experts is not likely to have the sort ofeffect that student protesters may think it will have so if they devest that essentially means that they're going to sell their investment they say in this market if you're selling an investment especially if it's with a lucrative companysomeone's going to buy that immediately so instead of seeing a sort of Gap or a lapse in business you'll just see it shift hands from one institution or one investor to another and so it won't have that sortof economic pump punch uh to the companies themselves or to Israel's economy itself and now what would it do again assuming this can happen because as you made that very good point at the beginning the financial instruments themselves
Shifts to the impact on university finances and explains how endowments support operating budgets. It outlines how divesting could affect faculty salaries, financial aid, classrooms, and other school services.
are not so easy you can't just kind of cross out one name the what would it do to the bottom line for the schools so I spoke to one expert who said endowments endowments endowments that's what you needto focus on when you look at Investments um and an endowment is essentially in their words it's like the University's version of a 401k it's a way that they can secure the financial future of the University with nouh intention of ever retiring it's just going to grow and grow and grow and so when you look at the way that they invest they're looking to build returns they're investing in ways strategically that's going to give themhigh returns that can help supplement their operating budget and so when they're investing in lucrative companies that return helps some fund um some of the operating budgets that includes faculty salaries it can include financial aid services in includes
classrooms um infrastructure for the school and so divesting in a way could have a sort of Ripple fact on the excess that they need to help supplement the school's operating budget Erica Brown thank you for chasing all ofthat down we really appreciate it