22.6.06

INCENTIVE COMPATIBILITY. Cato's Neal McCluskey notes that it's difficult to grouse about rising college "costs" when nobody has any reason to contain those costs.

I agree that more taxpayer dollars won’t fix the college cost problem, but Ms. Kamenetz [debating Mr McCluskey] misses the main point: Not only won’t throwing more taxpayer dollars get at the problem’s root cause, it IS the root cause. As I wrote in my letter to USA Today, [scroll down] “clearly, aid is not shrinking. Indeed, that’s the problem: Like everyone else, colleges want as much money as they can get and will raise their prices if they think someone will pay them. All this aid ensures that someone will.”

It’s really fairly simple: As long as government is willing to increase student aid, colleges will inflate their prices to capture it. Moreover, as long as states continue to subsidize public postsecondary institutions with taxpayer dollars, we will see public colleges and universities waste massive amounts of money. Finally, as long as those subsidies continue, we will keep seeing tuition at public colleges and universities buffeted by the boom-and-bust cycle that governs most state budgets.

Frankly, there’s nothing laughable about any of the consequences of funneling more and more taxpayer dollars into the ivory tower, whether in the form of student aid or state subsidies. Hopefully, students and their advocates will soon come to realize that, end their constant demands for free higher education, and stop snickering about what they’re doing to taxpayers.

Neither is there anything laughable about the positional arms races that ensue among parents to buy houses in the best neighborhoods, and put away money for the most-highly-regarded colleges, to keep their issue out of the clutches of the advocates of mediocrity masquerading as crusaders for social transformation in all too many school districts and enrollment-starved colleges and universities.

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