The Problem is Not Inequality, It's Subsidized Equality
By Daniel Greenfield
SultanKnish.Blogspot.com
On Monday, two millionaires showed off their
latest inequality talking points as Obama used
Elizabeth Warren's student loan bill to bash
congressional Republicans.
"If you're a big oil company, they'll go to bat
for you," Obama sneered. "If you're a student, good
luck."
Good luck indeed. Warren's bill cynically piggybacks
on a lower interest rate plan from last year that
the House passed 392 to 31. The Republicans, who
only care about oil companies, unlike Obama who
doled out billions in Green Energy loans to the
companies of his donors, voted for it almost en
masse.
Unlike it, Warren's bill isn't really about student
loans and isn't meant to pass. Like her Bank on
Students Loan Fairness Act, it's political theater
by a lifelong fraud who began her career as a fake
Indian, was a fake Republican and is now a fake
Socialist. It would be easier to find a garden spot
on Mars than a single honest moment in the long
career of Elizabeth Ann Herring.
Warren's bill is cynical manufactured outrage trying
to link two unconnected things, supposed tax breaks
for the rich to student loans, so that her equally
corrupt colleagues can hold on to their fiefdom in
the Senate by dragging out the overexploited youth
vote for the midterm elections.
Elizabeth Warren, a tenured celebrity professor who
jumped into politics, and Barack Obama, an untenured
law school instructor, who made it big in politics,
know exactly why student loan debt is so high and
why their measures do nothing to address its real
causes.
Harvard Law paid Warren $350,000 to teach a single
course. When Scott Brown brought it up during a
debate about student loans, she protested. "I want
to talk about the issues. Senator Brown wants to
launch attacks."
But Warren's outrageous compensation is the issue.
Harvard pays the adjuncts who teach many of its
undergraduate classes an average of $11,037.
Elizabeth Warren, who likes comparing the salary of
a company's employees to its CEO's, isn’t comparing
the $429,981 that Harvard paid her before she ran
for office to an adjunct's salary. And unlike a CEO,
all Warren did was show up for a little bit and then
go back to her real business as a lawyer and
government consultant.
The untenured Obama was making a more modest $69,287
for teaching three courses. He was politically
connected, but had yet to become a celebrity. After
leaving the White House, he can expect to easily
pull down a small fortune for showing up to teach a
brief seminar at any college.
The price of celebrity professors is paid for by
student loans. The successful celebrity professors
go on to a career in politics condemning Republicans
for not caring enough about student loans.
But while it's easy to blame Warren's ridiculous
salary for the student loan problem, we didn't get
to a trillion in student loan debt because of her or
Clinton's former Labor Secretary turned inequality
campaigner Robert Reich who pulls in $235,791 a year
from a public university at UC-Berkeley to teach a
course on "Wealth and Poverty" making him one of the
highest paid state employees.
At the modern university, the tenured celebrity
professor who doesn't teach and gets paid is the 1
percent and the adjunct that teaches, but is
unlikely to ever get tenure or a decent paycheck, is
the 99 percent. But just as national inequality did
not happen because a few CEOs receive huge salaries,
student loan debt didn't spin out of control because
of a few celebrity Socialist 1 percent professors.
The problem is
always in the middle. In both the national economy
and the campus, the biggest driver of inequality is
bureaucracy.
The classic campus was top heavy with professors and
light on administrators. The modern campus has more
bureaucrats than professors. The ratio of professors
to students may be a valid predictor of educational
quality, but the ratio of administrators to
professors is an excellent predictor of costs.
The average ratio is two administrators to one
full-time faculty member. In the 1960s it used to be
two faculty members to one administrator. The
runaway increase in administration has only
increased in recent years and it will only continue
to increase.
From 2001 to 2011 the number of administrators
increased 50% faster than faculty. Faculty members,
many of whom like big government in theory, are
discovering that bureaucracy has an unstoppable
moment. True to their radical roots, angry
professors and adjuncts frame the issue as one of
labor relations and bargaining power. Like Obama and
Warren, they avoid dealing with the technical issues
of why it's happening and skip straight to the
“power to the people” chants.
The left's inability to understand any issue in any
terms other than class warfare led it to frame the
student loan debate as an attack on for-profit
lenders and for-profit schools. (It's easy to
understand why for-profit colleges have higher rates
of loan defaults when looking at their student
populations.) Faculty members blame the
"corporatization" of education. Thomas Franks blamed
a culture of greed created by Ronald Reagan even
while admitting that there was no actual connection.
But it's not the culture of greed that is
responsible. It's the culture of subsidized
equality.
Colleges keep spending money irresponsibly because
they can always make it up by raising tuition rates.
And they can always raise tuition rates because
students have no choice but to pay. And when
millions of students need something, the government
will eventually supply it.
College degrees have become mandatory, even for jobs
that lack any skill-based reasons for requiring
them, turning colleges into very expensive high
schools. Politicians and college presidents speak
glowingly of the increased job prospects and
salaries for college graduates. They neglect to
mention that this is often not due to any academic
magic, but to a job market in which employers save
time and weed out the unemployable by hiring college
graduates.
After educational “reforms” devalued many high
school diplomas, colleges became expensive four year
filters that save employers the trouble of going
through resumes. College graduates earn higher
salaries because their fortune in student loan debt
tells employers that they can read, write and show
up on time. And that their pile of debt will force
them to work at a job they hate.
Increasing college enrollments devalue the
exclusivity of a college degree. When the college
diploma becomes as poor of a predictor of literacy
and job skills as the high school diploma, it will
also become worthless. The devaluation of college
diplomas is already leading some employers to
unnecessarily demand graduate degrees. Eventually we
will be stuck in a European system in which everyone
has an armful of degrees and no one has a job.
Colleges have been able to get away with wildly
irresponsible spending and tuition increases because
student loans continue to be subsidized in one form
or another. The ping pong ball bounces between
private lenders and the government with plenty of
money to be made by those in the loop from the boom
and bust cycle of privatizing and subsidizing loans,
deregulating and regulating, while piously lecturing
about inequality, 'corporatization' and tax breaks
for the rich.
Higher education is too big to fail and so is the
student loan industry. As long as students are
forced to attend college by the reform movements
that destroyed public education standards, and are
busy destroying the educational standards of higher
education, their attendance will have to be
subsidized. Americans will be forced to make bigger
and bigger “investments” in the success of the next
generation when they are really investing in corrupt
and dysfunctional bureaucracies.
The rise of college administrators was driven by
government regulations. The more colleges depended
on the government to maintain their industry, the
more they catered to government. The modern
university isn't run by donors, by student demand or
even by its endless ranks of administrators. Like
most government subsidized industries, it is run by
the government.
Normal businesses have a profit motive for
controlling the growth of their internal
bureaucracy. The profit motive of universities lies
in expanding their bureaucracy to better interact
with their government masters. The very business of
student loans increases the size of university
administrations even while the cost of that
administration increases the size of student loans.
In universities, as in their government templates,
bureaucracy, regulation and spending feed off each
other. Regulation results in more bureaucracy and
more bureaucracy results in more regulation until
the system can no longer fulfill its default
function.
That state was already reached long ago in the most
broken public school systems.
In Newark's broken school system, there is an
administrator to every six students. The
institutions of higher learning with their swollen
administrator ratios are following that same model.
The administrators of every indebted,
overbureaucratized and overpriced college know that
just as in the Newark school system, the bill will
eventually be passed to taxpayers.
Like the allied financial institutions feeding off
the debt they create, they are too big to fail.
The problem with college education isn't
inequality. It's a subsidized equality which
devalues a signifier of merit while making it
mandatory and pushes up the educational employment
tier another level. It’s a race that no one except
the institutions peddling sheepskin, celebrity
professors and courses on income inequality taught
by millionaires can win.
Completing high school used to be a way that a poor
boy could get a job. Now it's college. Tomorrow it's
graduate school. This system doesn't benefit him and
it doesn't create equality. Instead it rewards the
likes of Elizabeth Warren or Robert Reich with
generous salaries for occasionally coming in to
speak about inequality and it rewards even more
generously the bureaucrats who make the system
impermeable to real reform and change.
Tinkering with student loans provides a slight
temporary benefit to students while protecting the
corrupt system. Every liberal welfare policy uses
clients as human shields, but keeps most of the
money that is meant to go to them. Student loan
reform uses students as human collateral for the
expropriated money that will go to the system that
exploits them.
The only way to reduce the trillion dollar mountain
of student loan debt is by reforming higher
education. Anything else is another cynical gambit
by millionaire leftists who use inequality as a
political weapon while denying the equality of merit
that made higher education into the great equalizer
to those who needed it the most.