Higher Education, Part IV

This is the fourth (final) part of a series related to higher education costs. (See Part I, Part II, Part III, and also check out the president’s speech offering to help that led to this long and emphatic “no thank you.”)

The original government interference in higher education is the refusal to allow businesses to use their own hiring policies. While I think IQ tests are limited in many ways—they fail to measure life experience combined with drive—they are significantly useful in predicting job performance in many fields. This is from 2002:

Cognitive ability tests represent the best single predictor of job performance, but also represent the predictor most likely to have substantial adverse impact on employment opportunities for members of several racial and ethnic minority groups.[1]

What happened was, it became “unconstitutional” for businesses to use an extremely useful colorblind tool in hiring decisions, because the results might end up appearing to be racist. So businesses found another way—they let higher education institutions do the IQ testing, and subsequent weeding out, for them.

As a result, getting an education at a premier university that would provide the same cachet as a high IQ score became the path to career success. And students were willing to pay a premium for that credential.

Costs for the coveted scarce commodity rose. Fewer students could work their way through college. So government stepped in to “help” with guaranteed student loans (which may not be low interest, and cannot be dismissed even in cases of bankruptcy or disability). More students with apparent financial ability to go to college meant greater demand for limited college admittance, which meant ever higher education costs. Current costs for a degree in many mid-range skills far outpace wages. The result is essentially indentured servitude.

Incidentally, schools are rated by the percentage of students they accept compared to how many apply—so they recruit so that they have more to turn away—which makes them more exclusive, literally, so they can then charge higher tuition. [I’ll refer you again to the Uncommon Knowledge discussion I mentioned in Part II.] Some of the ultimate schools, such as Harvard, take in so much money, they have literally billions of dollars in their permanent endowment fund. They could expand easily and offer the education to greater and greater numbers. Or they could provide full-ride scholarships to all their students for the next century—just off interest, without touching principal. But they don’t do that, because being exclusive, more than offering an excellent education for the next generation, is their business.

So now the president, who can do nothing about the third or half of high school students who fail to graduate, offers to step in to make sure everyone (sweepingly including the dropouts) gets a higher education. The premise is that a college education is the passport to a comfortable middle class lifestyle, and that should be available to everyone. It’s hard to argue with the “everybody should have the same opportunity” concept. But logic holds that there will always be a lower 50%; speaking it out of existence isn’t going to work. (I’m thinking of Lake Wobegon, where “all the children are above average,” even though that’s not mathematically possible.)

If you know how to translate the president, you know he doesn’t really care about basic fairness—or else he’d be in favor of the free market. Power mongers grasp opportunities to be the deciders of who gets access to a certain level of lifestyle.

If the government is “helping” to make higher education opportunities, then of course it will have an interest in what is taught and how. So that means greater control over accreditation. Accreditation now is done by private entities, but does indeed have a certain point of view. For example, an accredited law school is required to teach not only that Roe v. Wade is the law of the land but that it was a correct Supreme Court decision—even though hardly anyone believes that, including the liberal members of the current SCOTUS. Accreditation is not a guarantee of education quality; it is a controller of documentation used for granting or denying access to opportunities.

Having more government influence on accreditation and other markers of success can only lead to weeding out dissenting opinions. And that is likely the intent.

Government could also affect choices by limiting use of student loans to those institutions it approves, thus limiting choice.

I am not in favor of encouraging diploma mills. I am in favor of my own children, at this point, getting their degrees from good universities—because right now that is still the gate to certain career advantages.

But, unlike our president, I trust the free market. If businesses were allowed to make hiring decisions their way, and students were free to get their education any way they chose (probably a combination of guided university education and much free online study), then costs would dramatically drop. Then hard work, effort combined with good character would be the gateway to success—rather than agreement with a tyrannical, interfering government.

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[1] Murphy, K.M., “Can Conflicting Perspectives on the Role of g in Personnel Selection Be Resolved?” Human Performance, 15(1&2):173-186 (2002).

Higher Education, Part III

This is the third part of a four-part discussion on higher education (start with Part I and Part II), stemming from a presidential speech assuring us (or threatening us) that the government is there to help.

Before we get right to the point, we’re about to take a diversion into the insurance world. Bear with me; there’s a purpose.

There may be an even earlier starting point, but for our purposes, let’s look at the rise of employer-paid health insurance. We have to journey back to the 1930s—during the Depression. FDR wanted to experiment with some form of government-provided universal health care, while he was fiddling around with retirement insurance (Social Security). But there was huge opposition from the AMA as well as the existing insurance industry, so he abandoned that.

Nevertheless, Roosevelt did have an effect on insurance. During that decade, not only did the federal government set minimum wage laws, locking out lower skilled workers from the workforce, thus increasing and lengthening unemployment, but the feds also set upper wage limits. This meant that government interference prevented businesses from competing for the best employees.

So businesses did what they do in a natural free market: they found other forms of exchange. The government said they couldn’t pay a higher wage, so they paid additional benefits that didn’t come under the letter of the wage limit law. They paid for their employees’ health insurance.

Early on, insurance meant what it had always meant—a hedge against unexpected catastrophic costs. No one expected insurance to pay for regular doctor visits, medicines, and other health maintenance costs. Those were neither unexpected nor exorbitantly priced. But as time passed, the benefits needed in order to attract the best workers expanded, becoming more comprehensive, and separating the patient from the costs of the care. That separation means the market doesn’t respond as it naturally would to adjust prices. So prices spiral upward—a direction that still continues.

Meanwhile, the federal government continued incremental inching toward government medical care. Truman suggested universal government medicine in the 1950s, but again the AMA accurately denounced it as socialism.

In 1961, Reagan gave a famous speech against socialized medicine, which was being pushed at that time. It's about 10 minutes long--well worth listening to the whole thing:

 

 

One thing you can count on from power mongers is that they will be relentless. If they can’t get all they want at once, they will aim to get it incrementally over time. So it has been with socialized medicine:

·         Help the uninsured elderly with Medicare.

·         Help the uninsured disabled with Medicaid.

·         Help the children of poor parents with State Children’s Health Insurance Program (SCHIP).

·         Regulate insurance companies providing benefits for employees.

·         Require insurance companies to provide coverage for pre-existing conditions (violating the free market risk taking of the insurance industry).

·         Require all Americans to purchase health insurance with full coverage as outlined by the federal government—including contraceptives even when against religious beliefs, and including denying healthy individuals the freedom to pay their own way rather than purchase full coverage….

In other words, power mongers start with an interference that leads to a problem, to which they can respond with another interference, which will lead to additional problems, to which more government interference will be the natural—and intended—response, until tyrants have control over the lives of the people.

So that is the pattern. Now let’s look again at the rising cost of higher education.

If we look very early on at education, we find government interference based on the need to educate poor immigrants (many from Ireland at that point), rather than let them become rabble on the streets. Government assumed, of course, that the vast majority of parents would continue to see to the education of their own children as they always had, while additionally being taxed to pay for the education of the identified poor—and government anticipated no resentment over the double cost for families.

By the last few decades of the 1800s, “free” public (government institution) education moved mainstream. By the mid-1950s, “free” public education became the norm for 1-12. Later, it became K-12. Now it is commonly preK-12.

Before government interference, nearly all US adult citizens could read (well enough to understand the Federalist Papers as editorials in their newspapers) and do basic math, as well as whatever other skill they needed to make a living. Today’s young people are skilled at user-friendly technology (but with decreasing programming skills), but know ever less history, literature, and basic math.

This is what you expect when you separate the parent and student from the responsibility of the learning.

Government schools fail to guarantee an education to those who graduate, but worse than that, high percentages fail to even graduate. Who is most likely to fail? Poor children—children of immigrants, children of single parents. So the initial purpose got the foot in the door. Then what had been working was decayed. And the final result is an exacerbated problem for the initial targeted group with the addition of an ever-growing population of undereducated needy.

For someone trying to “rule,” an undereducated needy populace is ideal. Thinking people can be so troublesome. So it is arguable that the failure was intentional (just like the failure of forced-employer-provided healthcare and exchanges are meant to fail so universal single-payer socialized medicine will be the logical next step).

In the next post we'll deal with the original government interference that led to rising higher education costs.