December 13, 2007
The Road To Serfdom
Correct me if I am wrong, but I think I have heard every Democrat in the Primary Debates speak to making college more affordable -- up to Gov. Richardson's plan for "College for All." At first glance, that's a typical example of good politics, bad economics. Is it perhaps a little more invidious? A WSJ editorial today (free link) points out that the result of government subsidies is not reduced tuition, but rather a larger portion of education paid for by Federal largess:
Ironically, these government handouts are creating the tuition problem. Tuition has risen about three percentage points faster than inflation every year for the past quarter-century. At the same time, the feds have put more and more money behind student loans and other financial aid. The government is slowly becoming a third-party tuition payer, with all the price distortions one would expect. Every time tuition rises, the government makes up the difference; colleges thus cheerfully raise tuition (and budgets), knowing the government will step in.
Already well endowed schools are free to raise tuition, then grant capricious exemptions.Gregory Mankiw says "In the future, Harvard will cost $1 billion a year, and only Bill Gates's children will pay full price. When anyone else walks through the door, the message will be 'Special price, just for you.'"
Compared to terrorism or socialized medicine, one is tempted to let this one slip -- college is swell, right?
Considering the <bold-italic-super-emphasis>EXTREME</bold-italic-super-emphasis> collectivist tilt in academia, and academics’ new importance in financing candidates, this is concerning. We are creating not only expensive tuition, but also a well funded intellectual superclass.