More from the backlog of posts planned but not necessarily implemented.  Here is Tamar Lewin in the New York Times, from 2 March 2011.  Public Universities Seek More Autonomy as Financing From States Shrinks.  Her focus is on the state flagship campuses, precisely where market tests are most likely to be at work.
The public universities say that with less money from state coffers, they cannot afford the complicated web of state regulations governing areas like procurement and building, and that they need more flexibility to compete with private institutions.
Yeah, attempt to impose crappy working conditions on star professors, and they'll walk.  And U.S. News don't sell campus ratings to prospective students seeking transparency in the commissary's  procurement procedures.  I've been working this argument for years, regularly holding the view that an academic administration ought be worthy of its best students.  But it's a differing perspective that gets Ms Lewin's attention.
Many education experts say public universities deserve greater autonomy, now that the bulk of their support no longer comes from the state. But they worry that the shift could lead universities to stray from their mission of giving state residents access to affordable higher education.

“There is a real tension between serving the public needs, on one hand, and doing what they have to do to ensure that their institution can compete in the marketplace,” said Jane Wellman, executive director of the Delta Cost Project.

Ms. Wellman is particularly critical of the trend toward splitting flagships like the University of Wisconsin-Madison, which generally have the biggest research grants, the most alumni support, the best faculty and students and the most political clout, from the rest of the state’s higher education system.

“Madison seceding from the union sends the message, ‘We’re not like you, we’re better than you, we’re going to cut our own deal,’” she said. “They may be better and different, but they still have a responsibility to assert a leadership role rather than cut their own deal.”
That ship sailed years ago, people.
Wisconsin or Illinois are reasonable substitutes for Harvard or Stanford (perhaps not for long, considering recent developments) that attracts more applications from the coasts. Do the administrators at Milwaukee or Northern Illinois simply tell frustrated Badgers or Runs-from-Huskies that their institutions are good enough, or do they make the efforts to provide comparable intellectual challenges?
It's only gotten worse for the University of Wisconsin system lately.  But the default position in higher education, four years ago, and today, is still to stand by college-for-all, never mind that U.S. News sell those guides to prospective students who don't want to get mired in the swamps of access-assessment-remediation-retention and potted microaggression and trigger warning foolishness.
Some education policy experts warn that states cannot solve the problems of financing higher education one institution at a time. They caution that giving special treatment to the flagship without considering the needs of the whole system and the less-prepared students who attend community colleges — is likely to backfire over the long term.
In what way backfire? The solicitude for disengaged and unprepared matriculants is what's provoking the push-back against business as usual in the first place.  The issue is standards.
On one hand, don't kick out somebody in good standing for lack of money. On the other hand, don't give the high schools bailouts for their own failures to inculcate proper habits of mind and comportment. That way lies full employment for the pushers of crying towels and the assessment of the obvious and all the other drags on the real mission of higher education. Where there excess capacity in safety schools, excess demand for prestige degrees, and inefficiently many students in college coexist, there must be improvements on business as usual.
There I stood seven years ago. There I stand today. I'd really like to be able to point to concrete improvements upon business as usual, whether in seven days or seven months or seven years.

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