A Poor Student Of Debt

Glenn "Instawrong" Reynolds gets to play in the NY Post's sandbox with this whopper of a false analogy that of course absolves the GOP of all responsibility for the student debt crisis.

The problem is, “college” isn’t an undifferentiated product. Companies can’t hire enough mechanical engineers, but there’s no bidding war for majors in Fine Arts or Women’s Studies, degrees that cost just as much, but deliver a lot less in terms of employment. In an economically rational market, it would be harder to borrow money to finance fields of study that were unlikely to produce enough income to pay back the loans. But since the federal government subsidizes everything -- and makes student loans un-dischargeable in bankruptcy -- there’s no incentive for lenders to care, and even less incentive for colleges and universities to care. They get their money up front, after all -- just like the people who wrote the subprime loans that fueled the housing crisis.

Got that?  Not only should the price of your major in higher education be subject to the whims of the  free market, but if you can't afford the price, tough crap.  If you're not willing to fill the "needs of the market" then why should you be taking up valuable educational resources, since the only goal in life is to make money?

Even worse, Reynolds argues, why should we "subsidize" education at all?  Short of the meritocracy of scholarships, education should only go to those who can A) afford it and B) who can then use that education to become Our Precious Job Creators.  No more room for lotus-eating ivory tower academics in our hypercapitalis,t globally-competitive society, no sir.

And you have to admit, the narrative is tailor-made for the Tea Party.  "We're paying our tax dollars to subsidize all these egghead underwater basket weaving graduate parasites who think they are smarter than we are!"  (Did I mention Glenn here is a law professor and "an author (writing An Army of Davids), a columnist, and a writer for academic journals" too?  No?)

Reynolds does see the next debt bubble here in student loans, but let's not forget that this "subsidization" he complains about as he calls the Occupy Together movement the "Hoovervilles of our age" was as much a subsidy bonanza for -- you guessed it -- the same banks in the heart of subprime loans mess (which, by the way, President Obama put an end to last year) as well as the for-profit colleges that follow the economic model that Reynolds champions.

Also, let's not forget that the main reason why students have to borrow more is that states are slashing the budgets of colleges and universities because we can never, ever raise taxes and anything that tax dollars go to that aren't tax cuts for Our Precious Job Creators is impeachable generational theft or something.  I know, let's fire all the government university professors (Hi Glenn!) and close down state schools and save taxpayer money.  I'm sure that won't raise the price of tuition at the remainder of the private schools or anything due to supply and demand (and hey, if God wanted you to go to college, you'd either be smart enough to earn a full scholarship or rich enough to pay for it.)

The larger problem is like voting, political power, socioeconomic power, and moral authority, today's Tea Party conservatives think the more we limit higher education to the truly deserving few (or education in general for that matter) the better off America will be.  That their criteria for who is "truly deserving" happens to always be themselves is just coincidence, especially when that power they derive comes at the expense of the dupes they have suckered into believing that they fall into that category too, or at least that by voting to exclude everyone else, they'll be handsomely rewarded with the share that once went to "those people."  The reality is of course that the super-rich will take that share too and laugh, but the dupes aren't supposed to know.

But to do that they need folks like Glenn Reynolds writing op-eds in the NY Post equating Occupy Wall Street protesters to the people that caused the financial crisis (and then absolving the people that actually caused the crisis.)  It's good work if you can get it.