In the movie "No Country for Old Men," after being asked "It's a mess, isn't it sheriff?", the character played by Tommy Lee Jones says, "Well, if it ain't a mess, it'll do til the mess gets here."

Our colleges and universities have been investing in a mess that's already here, and I was heartened when I heard that the president of Tufts University, Lawrence Bacow, recommended higher education institutions reduce their exposure to risky alternative investments, such as hedge funds and private equity.

From 2002 to 2007, the share of dollars in hedge assets coughed up by institutional investors -- including university endowments, foundations, retirement trusts and insurance funds, etc. -- jumped from 2 percent to, astonishingly, 50 percent. And the money pouring into the private equity/LBO/buyout funds market, which raised an unprecedented amount of capital before the market crash in 2006-2007 (with private equity raising $301 billion), came disproportionately from institutional investors.

These and other un-regulated investment vehicles became part of an immense "shadow bank" system that was intricately intertwined with bank boondoggles, debt bubbles and sub-prime and toxic assets that cost trillions of dollars in losses to not just endowments but households, pensioners, students, insurance holders and communities in general.

Still, the U.S. has not passed financial reform legislation that would require more transparency, wiser governance and more reasonable costs from this sector. So there remains a crisis of confidence, in that these investors are not regulated, charge outrageously high fees, and make obscene profits and compensation.

The rush to buy into these investment schemes also meant the shadow banks, in essence, "red-lined" large parts of our real economy.

That some of the largest foundations and endowments are hinting they may wade back into the pool is a frightening threat.

When trillions went to investors that shorted, over-levered or gutted good companies, not to mention the sub-prime vultures, we paid a tragically high price in massive economic losses and lost opportunity costs. That translates to collateral damages for our children.

When we send our children through college, it is with the hope that they will someday be able to harvest the American dream.

When our institutional fund managers instead invest in short-term sucker bets that, in the end, simply line the pockets of the new "Barbarians at the Gate," then we are doing more harm to our educational (and parenting) mission than we could ever imagine.

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