I wrote a few weeks back about the college debt bubble, not solely as it relates to the financial imbalances evident in that, but rather how such monetary flow truly and sharply malforms the economic system. Orthodox theory posits that monetary policy is neutral over the long run, thus short run intervention, even extreme applications, is more than acceptable. That forms part of the basis behind the idea that economies can be run like a hard science. But a more granular look at these “interventions” of credit shows quite the opposite.
Without rehashing all the details, this abundance of new funding has given higher education institutions an opportunity to capture “growth.” However, not all these new candidates for “advanced learning” are truly capable. That has left colleges and universities with a bimodal opportunity – maintain integrity and turn away the new throngs (and their federal gov’t debt-based revenue) or simply invent new ways to keep them on campus (and thus the ocean of “money” keeps flowing). In nearly every case the latter course was taken.
You don’t need much to see this in action, as the Wall Street Journal amply demonstrated Monday. In what is designed as a human interest puff piece, the article fits the thesis that colleges are simply making up courses as they go to retain as many students for as long as possible. As the article’s title gives away, Zombie Studies Gain Ground on College Campuses, education be damned.
The behavioral change is contained in the 21st century convention that a college degree is now required for any kind of gainful employment, even if all you did was study zombies.
That largely rests upon this idea that everyone should go because of the money available for it. In other words, college is certainly the way to prosperity for some people, but only recently has the idea that college is the only way to achieve financial security and success become so widespread.
Further, other behavioral changes lie in the system orienting away from the primary goal of individual suitability and attainment, tending more toward self-perpetuation. Such alteration disrupts the market-based signals in creating the highest potential efficiency for the employment pool as a whole. There is a reason that the aggregate size of the “nonprofessional” staff, who have little voice in the setting educational expenditures, did not grow while the ranks of the “professionals” exploded more than the pace of student enrollment. That is the very character of inflation itself, as individual agents become captured by the inorganic intrusion of money rather than market signals to do something more sustainable and ultimately more productive. Once that becomes entrenched, it no longer responds at all to any market signals of waste and inefficiency, instead resisting even minor evaluations and reform.
Who has the most to gain by convincing young adults they need to study zombie movies at $30k a year? The student or the education-industrial complex that has sprung up into that ocean of debt? It is monetary corruption at perhaps its most obvious, thus negating the idea that monetary intrusion is neutral. That applies equally to all forms of inorganic debt “stimulus” as well as student loans and college students.
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