|Community Org 101 can't teach you Econ 101|
As President Obama attended his latest campaign pander party (thinly disguised as government business instead of the taxpayer supported campaign trip it actually was) the things he said in his speech reminded me of something Dr. Walter Williams has said; "Politicians exploit economic illiteracy.”
So as the professor also often says, "Let's look at it."
Putting aside the inane headline in the paper that read; "Obama Targets College Costs" (a supposition that getting the federal government involved in those costs is actually part of his job description), let's look at what causes costs to rise for higher education, or for that matter any commodity. As always it's the ratio between demand and supply. In this case, the government has caused the demand to rise by subsidizing the potential students and the colleges themselves. (As an aside, they did the same thing in causing the housing crisis.)
The story goes on to describe the "college affordability ideas" Obama is promoting. One is that he threatens that if the colleges and universities don't cut costs they risk losing some of the federal aid he is promising as part of the ideas. The law of carrots and sticks will never replace the law of supply and demand. And the law of supply and demand is one of only a few laws in existence that wasn't written by politicians. It has the added benefit that it enforces itself, so they are left out of the force equation as well, which drives them insane.
According to the newspaper article (Chicago Tribune) the President stated that "schools can't just jack up tuition every single year and simply expect people to pay it!" So, as usual, he said at least something that made sense. Unfortunately, after citing that basic tenet of economics 101, he screwed it up on the follow through (as he also usually does) by showing his utter illiteracy on the subject (or contempt, as the case may be) when he calls for the use of coercion to correct that condition instead of assuming the consumers of the product will make other arrangements. The truth is, the people he says can't be expected to just pay the "jacked up" tuition do not expect to pay it, they expect you to pay it. Because people like Obama keep promising them things, and delivering.
Republicans don't get a free pass on this one. They have had similar plans to jawbone prices down as well. If they think that it will work any better for them they are just as dumb or just as cynical as Obama is. They both would like to think that powerful people like them can just order education costs to go down.
The reason for the speech is not to "fix" the college affordability problem, it's to buy votes with taxpayer money and shore up his support. It's text book pandering, this time to university students who backed him last time but don't look like they will deliver in big numbers this time around. After all, they are in school to learn and at least some of them have learned a thing or two about hope and change in the last three years. Large numbers are rallying to the campaign of a seventy-six year old doctor who has great appeal to the Democrats among them.
So while most of us are planning our super bowl parties, Obama is in the Democrat stronghold of Michigan hosting a pander party. At halftime the meal they are serving up is pulled pork, but the pork will be pulled from the taxpayers pockets.
This article was originally published at WhatWeThinkAndWhy