Sultan Knish
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.
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