Unforeseen Contingencies

I've been listening to the Statist of the Union address and am utterly disgusted.  What a load of dreck.  Here's a nice analysis that cuts to the heart of the problem with the speech itself ("dumb hacks writing garbage").

But what about content?  Obama's "middle class economics" is, in effect, nothing but a demand for a cradle-to-grave welfare state that covers everything, including providing from child care, setting wages, mandating maternity leave and sick leave... proposal after proposal to increase the cost of hiring people and thus increase unemployment.  These would have the added "benefit" of ultimately putting government in charge of providing services and making us dependent on i.e. subservient to, our government masters.  Ugh. Karl Marx lives.  Lots of gloating over a "recovery," complete nonsense in that "low unemployment" has been heavily driven by people dropping out of the labor force, especially young people, and exploding deficits which will grow faster than the economy...no serious analysis, just dishonesty and propaganda.  Plus there was so much whiny emotionalism, an entirely phony pretense to being reasonable, feigning a "reaching out" to his opponents.

And then there was blather about how successful the Obama foreign policy has been.  It's hard to know what to say here, until you realize that perhaps he's completely right, if one chooses the definition of "success" (i.e.whose side one is on) accordingly.  Lots of other yammering on climate change, gay rights, Muslim peacefulness, and -- remarkably -- an assertion that he is strengthening civil rights against government spying!!!  Where was the guy who shouts "you lie!" when we need him so badly?  I miss him.

But as I'm an academic, one proposal really caught my attention: free community college for all.  What a great idea! Almost as good as perpetual motion or cold fusion, certainly every bit as effective, "almost" as good only because perpetual motion and cold fusion never did any harm, so far as I know. Obama's proposal will likely go nowhere, at least for now. But why isn't this a great idea? After all, community colleges are much cheaper than four year colleges, and isn't education a good thing that can improve peoples' lives and increase their productivity?  Yes, and that's why this is a terrible idea.  Obama's proposal would destroy the community college system as a source of inexpensive, valuable education. Bear with me and I'll explain.

It's public knowledge that the financial cost of a four year college education has grown far faster than the rate of inflation.  It's less widely known why this has happened, but it's no mystery to those who study it. It's a completely predictable result of increased government subsidization of higher education, primarily through federal student loans and Pell grants, but also state level programs.  It's basic economics that if government subsidizes something, the demand for it will increase and consequently so will the price.  The education industry is subject to this law.  Colleges and universities have proven particularly adept at siphoning off these subsidies, in particular by increasing administrative staffs and programs, most of which have no real purpose other than maximizing college revenues.  Students sign up for classes and government pays the bills. Colleges find ways to make the bills bigger and bigger, and they are very good at it.  Unfortunately, in the process they deliver less and less each year.  Teaching is increasingly farmed out on adjuncts, and the content of courses, at least in the humanities, has suffered a reduction in rigorous analysis and an increase in plain political partisanship and propaganda.  Here are some of the consequences of government subsidy of higher education:

1. Costs have risen sharply, and so has worthless administration.
2. Students have taken on enormous and often unsustainable loads of debt.  Note that interest rates on student loans do not take majors into account.  Student loan programs do not differ in rates or amounts loaned between a student who majors in, say, chemical engineering (the major with the highest average starting salary and a rate of unemployment that is effectively zero) and a student majoring in, say, feminist art criticism.  No wonder it's not sustainable.
3. Students who are really incapable of handling college level academic work face increased incentive to enter college, and colleges have incentive to admit them and retain them.  The effect is grade inflation and the dumbing down of courses.  Anyone following academia knows that these problems are rampant.

So... what might "'free' community college for everyone" do?  Clearly, by reducing the financial cost of college of enrolling to zero, government would greatly increase the incentive for people to enter community colleges, whether it is economically or academically wise or not.  And by promising to cover 100% of the tab, government would give community colleges incentive to push "costs" through the roof.  No student debt, at least... it would be directly transferred to taxpayers, instead of indirectly as it is now.  But given the long run growth path of deficits, how we are supposed to pay for this additional expense?

Obama's proposal is a terrible idea, not because community colleges are a bad thing, but because community colleges are generally a good thing.  They ought to be made more market-based, not less, and the federal government has absolutely no legitimate role in them.  Obama is a thug and a skunk.  May this idea, and his others, and the scoundrel himself, come to naught.