The American Dream Perverted

I have been known to bitch and moan about the number of students that show up in my class that aren’t either ready, prepared or able to take a university class. (Most of this would be taken care of if they’d allow student loans to cover remedial courses, but they don’t. They force the unprepared into classes where they will most likely fail.) Yes, it would make my life easier and yes, it seems like it somewhat makes sense to spend precious resources on those with the greatest chance of actually benefiting from higher education. Still, there is something in me that is quite bothered by the recent move in Louisiana to solve its education problems with a samurai budget sword. I want to address the mess the Governor and the Legislature here in Louisiana is making of higher education due to budget cuts and ‘reorganization’. I think the budget is just the excuse just as Hurricane Katrina has been an excuse to remove some things from New Orleans. The result will be that fewer students will get into public universities, fewer programs will be offered to students, and all of this will boil down to fewer opportunities for the populace of Louisiana. I think, actually, this may be what they want to achieve. They want to ensure that the majority of our populace become deadenders in dead end jobs with no place else to go.

Anyway, I’m going to quote from the monthly Chancellor’s Letter to the students, faculty and staff at the University of New Orleans. I will mention that I like Dr. Ryan and that he’s had a tough job since Hurricane Katrina nearly brought UNO to it’s knees while the legislature kneecapped our funds at the same time. Oddly enough, he’s an economist by training and taught in the Econ/Finance program before moving from Dean of Business to Chancellor of the University. He knows some of these issues as well as any of us. However, he’s an administrator now and a bit of a politician so the hat change has led him to a different path. These are his words.

Under the Louisiana GRAD Act, which Governor Jindal signed into law this summer, the State has made it clear that raising the bar is the only acceptable course of action. In order for UNO to be eligible for incremental tuition increases, we have to achieve certain performance benchmarks. UNO will remain affordable, but this tuition authority is a necessary component to ensure that we are giving our students the best chance to succeed.

One of the ways we will address the budget shortfall is by eliminating or consolidating certain programs so that we may focus on the programs that have the most notoriety, student demand or economic impact in the community. Regardless of how acutely we are affected by future budget cuts, our vision remains unchanged. We are in the process of restructuring the University so that it is a leaner, more efficient, and more focused institution that maximizes its resources. We are committed to enrolling superb students and providing them the support they need to flourish.

We continue to see this shift in the approach to many public goods. We want them to run like for-profit businesses. But, frankly, public goods are for the public good and there is nothing public or good about for-profit businesses. They are for profit. Period. Good is–at best–a side consideration. So why is there this rush to force expensive and ineffective models on public goods? Public goods are peculiar things and the economic theories that rule them are quite different from those that define the private sector and free market. Mostly, there are several unique characteristics that make them public goods. (Follow the wiki link for a general discussion of that.) This makes them ill-suited for for-profit models.

People that hate government hate all government and seem to be ideologically blind to the economics of public goods. When they take a sword to the beast, they hit at the very heart of the characteristics that make a public good poorly suited to be privatized. Some really examples of bad things to privatize have been jails and many functions of the military. Privatization distorts incentives in already weird markets. By inserting profit motives into these goods, you actually motivate the society to incarcerate people and start wars. In situations like education you distort incentives also. But in this case, the distortion leads not to increased provision of undesirable things. It leads to decreased provision of desirable things with massive public benefits.

In both cases, we have examples of externalities. Externalities occur when the benefits of the good or the costs of the good cannot be limited to just the consumers or the producers. They spill over into society. Education has a positive externality and there fore tends to be under-provided by any one seeking profit. A business can’t turn the benefits into profits, so therefore the business won’t do it. Pollution has a negative externality and is overproduced by a profit seeking company because it doesn’t have to take on all the costs. It can pass it onto society and taxpayers. Since costs are underrepresented to the private provider, it will keep on overproducing and passing on those costs to some one else.

Well, one of the reasons here is that Governor Jindal is one of those horrid supply-siders who wants to kill the beast rather than make it more efficient and effective and let it serve the public. He worships at the alter of the perfect free markets because he believes it to be true. He has no interest in truth as founded in the scientific method, theory and data. He found God and the Free Market during his university days and never thought to question the dogma since. Our state has become a vast experiment for false economic theory. We’re turning our children’s futures over to false economic hypotheses. Jindal completely misunderstands the nature of public goods and private goods and the nature of externalities and he has no interest in hearing that he might be wrong. He’s a zealot on all accounts.

The GRAD Act of 2010 seeks to radically change access to higher education and its purpose as a public good. This so worries me. I don’t want it to become a holy grail of any other place and I’m afraid it will spread like the nature of all bad religions. It will move with a huge sword and a group of true believers.

The GRAD Act seems to be a step towards a more market-based pricing system, but it has limitations. In a market system, higher prices discourage marginal buyers. In the case of higher education, this would impact those who are less fully committed to pursuing higher education.

But our higher ed system features extensive federal intervention, which distorts the market. Higher tuition leads to more federal aid. Federal aid shifts the burden of education costs to taxpayers. The buyer is insulated from the higher cost of and the demand for education is artificially inflated.

In a true market economy, higher tuition costs will cause fewer people to apply to college. While we may initially view this as a problem, the Cato Institute argues that there are too many college students:

“While college attendance is up, overall adult literacy has barely budged. A federal assessment found that in 2003 only 13 percent of Americans 16 years old or older were ‘‘proficient’’ in reading prose, understanding written directions, or performing quantitative tasks. This dismal score was down from 1992, when 15 percent of Americans were proficient in prose and document literacy. To a significant extent, it seems a college degree may just be replacing a high school diploma as a sign of minimum competence.”

It appears that our current system of government subsidization has made education more affordable but less valuable. The GRAD Act can only have a limited impact on the market for higher education while government artificially inflates demand.

I hope you’re beginning to catch my drift here. The idea is to limit the demand for a university degree via tighter standards, higher tuition, and limited supply. That sort’ve sounds good. It sounds like we’re increasing efficiency. But that’s not what’s happening. Actually, some of the things that are going on is the elimination of successful programs at successful colleges. No one is closing down the administrative and cost-heavy smaller colleges for their inefficiencies because they’re in parts of the state that typically vote for the likes of Jindal. Rather than trying to focus on efficient delivery, this focuses on strangling public education. This includes the Med Centers and the Law school for the state also. It guarantees that a state education will be more available to the kids that don’t need a leg up and less available to the kids that don’t have much of chance of success or entrance to higher education anyway. We’re further disenfranchising the disenfranchised.

The business community loves Jindal’s plan. Jindal has made it pretty clear that he wants us to graduate less students from four year colleges. He prefers them to go to trade schools/community colleges where they can be slotted into working the state’s oil rigs among other things. This basically is announcing that you’d like to stop whatever upward mobility in the state there might be. You’re ensuring that certain industries can fill their employment rolls with people with no place else to go. We’re prioritizing the training of dead-enders under the guise of “centers of excellence” at state community colleges.

House Bill 1171, authored by House Speaker Jim Tucker, would give university boards the power to raise tuition and fees in 10 percent increments until the colleges reach the average of a peer group of institutions. Upon reaching the cap, increases would be limited to 5 percent.

The purse-string power would help colleges offset state funding cuts of nearly $300 million in the past two years. The coalition backing the bill is known as BILD, or Businesses for Improving Louisiana’s Development. The Baton Rouge Area Chamber, Greater New Orleans Inc. and the Greater Shreveport Chamber of Commerce are among more than 40 business groups backing the tuition measure and other bills that would grant the state Board of Regents the power to install funding formulas that reward colleges for performance and that would establish centers of excellence at state community colleges, among other things.

Jindal is radically restructuring access to higher education in the state in the guise of saving money and efficiency. Next year, I’m sure we will witness one of the biggest brain drains ever as university after university rids themselves of tenured faculty because of financial exigency. Many of these universities are already short on junior faculty. I can’t imagine how you’re going to attract any one to ever teach in a state that has already shown such contempt for tenure, traditional success in a program, and academic research. This situation preempts the tenure system. I’m sure that’s part of the plan because movement conservatives hate tenure as much as they hate teacher’s unions. It’s easier to get rid of people that disagree with you and won’t teach your failed economic theories.

The emphasis now is on the programs that have the most bang for the buck. In the business college, we will produce more MBAs with the professors that can teach a bunch of classes, not the professors that have distinguished themselves in their field through publication and turning out other scholars. Those professors and the PhD program will be eliminated as part of the financial exigency plan. This is just the example that I know of because it’s in the department that I know well.

I am reminded of my days as a consultant to manufacturing and my training with Dr W. Edwards Deming as I watch the weirdest metrics being used to assess what is useful in education and what is not. Dr. Deming used to tell us that the “most important numbers were unknown and unknowable.” To this day, I can hear his deep voice telling us that over and over. I also remember sharing my experience as consultant to an AT&T manufacturing plant that was engaged in metrics but not in the mentality it takes to do the job right. The late night shift was always going around changing the tags and the numbers on things so that there would be no blame on labor. The data was played because of the fear. Dr. Deming would use these examples of showing us how so many workers lived in fear of doing their jobs right.

This brings me to another reason that I do not think this will work. Even teachers will cheat if metrics are held over their heads and the heads of their students. If you build enough fear into people, they will make sure you get the results that you want, even if they have to fudge the numbers to get them.

More than 100 Atlanta educators may be sanctioned for suspiciously erasing wrong answers on elementary school students’ standardized tests and replacing them with correct responses, the Atlanta Journal-Constitution reports.

An official inquiry into the alleged cheating began last year following a six-month Atlanta-Journal Constitution investigation of possible cheating on the Criterion-Referenced Competency Test, the standardized test used to determine whether schools are meeting national and state education standards. According to the AJC’s analysis of sweeping test score gains between 2008 and 2009, which showed some of the lowest performers mysteriously become some of the highest, the odds of making leaps in proficiency like those seen at some Atlanta schools were less than one in a billion.

In a report released Monday, investigators wrote that widespread cheating seemed to be limited to 12 schools—far fewer than the nearly 50 initially flagged by state officials as suspicious. But more than a third of the educators deemed at fault are principals and other school administrators, indicating the possibility of inter-school collusion in the cheating scam.

This is what happens when you bring the corporate mentality into an institution that is built for the public good. This is what happens when cost cutting takes on a religious zeal. The results that you get are not the ones the public really wants or needs. At best, you’ll see schools do wrong by students just to meet the metrics and the rules of the game foisted upon them. I guarantee, eventually they all will cheat. They will cheat the students, the system, and the taxpayer. But by then Governor Jindal will undoubtedly be running for higher office on how he tamed the size of Lousiana’s government.