Higher Edification

Fear is terrific for meeting deadlines, demonizing adversaries, and filling us with inertia. Freedom as Jon Stewart pointed out is not the best tonic for creative output. But the fear contagion squeezes those last drips of inspiration from the creativity juicer. There they go. Down the drain of risk aversion. Hence a climate of uncertainty is all corporate America needs to sits on its hands -- or in the case of Haliburton move to Dubai so taxes can be treated with the respect a balance sheet treats pure profit -- a revenue-gusher harpooned from the veiny arms of the U.S. Treasury.

And what happens when Government 2.0 takes matters into its own hands? It trips over its own unfunded regulations or runs into corruption on highway projects that overbill taxpayers with the same confidence that our officials voice when campaigning to fix our crumbling infrastructure.

These are the familiar invective-laced villains that managed to escape economic gravity up until the end-of-life care for the American middle-class (remember when that was an actual voting bloc? I don't either). But there's a whole section of the economy that's escaped the wrath of every cable diatribunal. It's even escaped the sights of the most vehement members of the tea party freshman class. In fact a March showdown over the debt ceiling is likelier to see the chandeliers crashing on well-heeled Medicare recipients than any fingers wagging in the direction of this most elitist and blameworthy of our domestic cartels.

American higher education is the envy of the world. But it is in the unenviable position of being out of the reach of most Americans. According to Jonathan Alter America's college graduation rates have plummeted from #2 to #16 over the last generation. And how much of the swelling amenities lining the tax exempt pockets of American Universities gone to enriching the commonweal for which that privilege was first extended? And why the free ride? Harvard doesn't have to move to Dubai to evade taxes. (That's where the action is for American Universities as they tap out of the elites over here).

Here in New England (formerly American Higher Education headquarters) 40% of Boston proper is off Mayor Menino's tax map for this reason. But does that policy foster good collegial neighbors or a trust for sheltering the otherwise taxable excesses of former HBS grads who never counted a dollar they couldn't depreciate (or compete on)?

Harvard's trustees weren't sure just how far the sky had fallen by the time its endowments had shriveled in the wake of the financial meltdown. It also served as the reason that major capital works in surrounding Allston were suspended -- even though that justification has since subsided. But hey, the future's still an iffy proposition, right? Especially for an asset pile as high, precious, and potentially imperiled as the Harvard endowment.

It's interesting how unquestioning the media is. Is a college degree worth getting? The question's no more open than bargaining for the size of one's tuition bill. In fact it's a rigorous debate compared to performance-based degree programs. Can you imagine basing student tuition debts on the actual career benefits the degree advances? No skin in that game.

Still, it's good for the higher ed business if we accept the long-held premise that college grads earn a good deal more than the rest of us. In last week's New York Times Brigham & Young Economist Eric Eide reasoned that the costs of college are not going up any "faster than the returns of graduating from an elite private university." In other words the cost of an ivy league degree is commensurate with competing for jobs in the 21st century -- either you're in or you're out.

That may be true. But until the surrounding community is completely out of their ivy league the national debt should be no less abstract to economists like Mr. Eide than the institutions that keep cranking out those economists, tax lawyers, robber-barons, and Oval Office holders.