I think Professor Reich is missing something crucial about Harvard: its fundamental asset is its reputation.

It has plenty of money, and if its goal were to produce the best education, it would be expanding its offerings. But that's not the goal, which is to present itself as the elitest of elite institutions. That reputation is self-reinforcing: it attracts connected people, and produces connected people.

Those connections do indeed make for great success. It's not on the merit of their education; Harvard doesn't teach any better than plenty of other institutions. But they get the best students, because that's where the other best students have gone.

If Harvard were to make an enemy of the President, it would make an enemy of half of the country, including enormous numbers of very wealthy people, and a not insignificant fraction of its alumni. And that risks having its graduates lose the connections for which they picked Harvard.

Knuckling under costs Harvard its soul, but failing to do so undercuts its whole reason to exist. I don't think they have a choice.

I'd love to see this situation undercut the whole notion of the Ivy League, which excludes vast numbers of incredibly talented students while boosting a few whose skills are frankly middling. But I don't expect Harvard to change its mind on this.