By Richard Vedder
I read in today's Washington Post that Congress is going to do something novel in 2007 --meet on a regular basis. Instead of meeting 3 days a week for maybe 25-30 weeks a year, the new energized House leadership is talking of actually having Monday sessions!!! And shorter "recesses"!!! I appreciate their enthusiastic display of work effort, but worry about the consequences for the nation. My guess is this passion for work may dissipate by next summer. There are a lot of higher ed issues on the burner --the reauthorization of the Higher Education Act for one--so in principle Congress should meet more. But since the net effect of modern federal involvement in higher education is arguably more negative than positive, I am actually sorry to read the news. To me a do nothing Congress on average is better than an activist one. Having said that, however, I suspect "gridlock" in the form of divided government on the whole is better for the nation than uniform single party rule. Competition in government, like competition in business, is better than monopoly.
The affable and astute George Leef of the Pope Center, a key ally in our fight for better and more affordable higher education, has brought to my attention two marvelous blogs by Gary Becker and Richard Posner. Becker is a Nobel laureate economist of great sagacity, and Judge Posner combines superb economic thinking with great accomplishments in the legal profession.
Becker and I recently (a few months ago) had a civil disagreement about his belief that higher education has a high rate of return to society, and his view that higher ed has all sorts of positive externalities or spillover effects (e.g., more healthy populations). This has made Becker more sympathetic to the Democratic announced efforts to expand student financial aid than I am. But Becker is intelligent, and thinks that the current loan system is not optimal. He shares my belief that moving to an "equity" approach to federal assistance and away from a traditional fixed rate loan approach is desirable (although I would prefer for the feds to exit the loan business altogether). The equity approach deals with the argument that current high costs and big student debts are threatening the nation with major shortages of lower paying professional workers, such as teachers and social workers.
Posner shares more my skepticism on the positive spillover effects of higher education, and does not like the massive expansion of federal student aid that Speaker-designate Pelosi and others are espousing. He makes the point that the primary benefits of university education accrue to the students, and even if there are some positive external benefits, it does not necessarily follow that, at the margin, an expansion of loan and grant programs serves society well. Both gentlemen are first-rate scholars and their views should be accorded great respect.
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Sometimes, one of the great things about capitalism is that while one is doing well for himself he's unavoidably doing good for others.
For starter, assuming the oft-mentioned extra $300,000 of lifetime earnings would put quite a bit more in the US Treasury and he'd likely buy a nicer home and kick-in more local taxes. Then, that fact that no one hires middle income earners unless their biz plan indicates they'll add much more value to the company than they are paid.
Societal values? Well it does seem that college shifts many, but not all, from a blind belief in "voodoo" econ, unlimited military expansion, faith-based opposition to bio-tech and the like, and it could be argued that had OH invested more in higher education and had a larger tech sector, that in addition to providing jobs for those who once built profitable gas hogging tipover rigs, and may well have swung the 2000 election away from the Bush Dynasty which would have provided enough savings to educate just about anyone a bit short of money with enough left over to provide an evening meal for every hungry kid in the world.
But that's on average, individually I guess we never know; after all Pres Bush doesn't show much "added value" for Yale and a Harvard MBA while Gates and bridge partner Warren Buffet, have done pretty well, and I can't think of any Julliard grads who changed music as much as did, drop out, Miles Davis, Bob Dylan or Springsteen.
Does the above convey that I think it's hrsht to claim higher education does not confer all sorts of societal benefits? Good! Those taking the opposing view are mostly just hacks of the right trying to make hone their "ME" generation beliefs and convey their message that college is primarily for those who can afford it. Others with a sense of history might look back at how the GI Bill that put just regular folk into Ivy colleges changed the face of post WWII America.
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