In his speech in Buffalo, President
Obama declared his intention to bring down rising college tuition costs.
His speech makes plain three
things: (1) He thinks rising tuition is caused by colleges; (2) He thinks
government is the solution to the problem, not one of its chief causes; and (3)
He thinks he knows how much tuition all colleges and universities ought to
charge and, therefore, which ones are charging too much;
He is triply wrong:
(1) As everyone who ever studied
economics ought to know: All other
things being equal, when the demand for a good or a service rises, its price
rises as well. By providing grants and low interest loans to millions of
students, the government has driven up the demand for college enrollment
dramatically, thereby driving up the price as well. When colleges educate
more students, they must build new classrooms in which to teach them, new
dormitories in which to house them, new dining halls in which to feed them, new
health facilities in which to care for them, new athletic facilities in which
to keep them fit and entertained, and new parking lots for their cars.
Colleges also must hire new admissions
counselors to handle their applications, new campus police to keep them safe,
and new maintenance crews to keep them comfortable.
They also must hire new faculty
members. Those faculty members require competitive salaries, health
insurance, retirement funds, research sabbaticals, offices, parking lots, and
secretarial staff. Like the faculty, the secretarial staff requires
salaries, retirement funds, insurance, vacations, offices, and equipment.
Did I mention that a larger student
body requires bigger libraries, more books, and more librarians?
What money colleges cannot get from
donors to cover these crushing new expenses, they must get from students.
Of course, government intervention and
the rising costs it entails are not limited to the demands of expanding
enrollment. Government intervention also includes government regulations
that tell colleges and universities whom to hire, whom to enroll, and what to
teach. If colleges do not comply, federal funds are cut off. To
avoid that cut off, institutions of higher learning must hire whole departments
full of educational bureaucrats to implement, to assess, and to enforce
government mandates. Those departments of compliance must be housed and
supplied. The bureaucrats who administer them require salaries,
retirement funds, insurance, and vacations, as well as expensive, well-equipped
and air-conditioned office buildings in which to do their work. If
colleges opt out of hiring and housing teams of bureaucratic overlords to
manage the rigors of government compliance, they run the risk of falling afoul
of the laws, in which case they invite not only the loss of government funds
but also possible lawsuits, the costs of which are rising along with everything
else.
The heavy expense associated with
meeting the needs of more and more students -- and the heavy cost of government
mandates on colleges and universities -- can exceed many millions of dollars
per campus, depending upon the size of the school. The aggregate costs to
colleges and universities nationwide are perhaps incalculable. In order
to meet the rapidly expanding financial burdens that government intervention
places upon them, colleges must raise tuition, sometimes dramatically.
In other words, government itself has
done things that drive college costs into the stratosphere. And now that
it has, the President wants to punish colleges for the soaring prices he and
his ilk helped produce.
Please note: I am not saying that by opening up access to
college for millions of service men and women via the GI bill that the
government did wrong. That is not my point. I am saying that by doing so it has cost
colleges and universities enormous amounts of money.
(2) Expensive as those forms of
government intervention are for colleges, they are not alone, and they are
perhaps not the worst. By printing many billions of dollars in fiat money
every month, and thereby shrinking
the value of every American dollar on the planet as a result, the government
makes it necessary for colleges and universities to charge ever greater amounts
of money for the services they provide just to break even. Because it
takes more newly shrunken dollars to buy what old dollars used to, more dollars
are needed. Even if all colleges and universities decided against raising
tuition in order to cover the costs involved in servicing more and more
students, the government’s monetarist chicanery still drives up prices
dramatically over time.
(3) Finally, I cannot imagine upon what
possible basis Barack Obama thinks he can calculate how much tuition every
college and university in America ought to be charging, or how much that tuition
ought to go up each year. But if, as he indicated in the past, he plans
to punish colleges whose tuition rises too quickly or too much, then know it he
must. But know it he does not. No one does.
Suffice it to say that I am continually
amazed at how much community organizers know, or think they do.
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