Political Roundtable - Part VII

[dobrojim]

In a free market, the cost of education shouldn't be dependent on the return of college education on an individual's earnings. The cost of education should be dependent the raw cost to educate a student in a competitive market. There's no reason why it should cost $50,000 a year to put a teenager in front of a qualified instructor for 18 hours a week.

What we have is an education monopoly imposed by the accreditation process.

I sincerely hope the on-line colleges start seriously cutting into those fat education profits.

Nope. I'm surprised how many both libs and cons make this (IMO) mistake.

The cost of an education is based on what people are willing to pay for it, not what the
costs are to provide it. If people are unwilling to pay, they will not be buyers.
Like a lot of things, it's often about perception of value. Right now, college degrees
are perceived as being highly valuable. So buyers are eager to buy and willing to pay
high prices.

Same thing applies to the old argument some use to defend owners against 'greedy' players,
that increased player salaries will drive increases in ticket prices.

No.

Ticket prices are not primarily driven by costs, nor is education. They are driven by the willingness
of buyers to pay the price.

BTW
Bravo for online colleges to create competition for education buyers. That said, a significant
number of these purely for profit educational enterprises haven't been doing such a great
job preparing their graduates for life after school. The accreditation process may not be
perfect and have some unintended consequences, but I'm unconvinced that it can be
simply gotten rid of. The failure of these schools demonstrates why that is.

[nate33]

In a free market, the cost of education shouldn't be dependent on the return of college education on an individual's earnings. The cost of education should be dependent the raw cost to educate a student in a competitive market. There's no reason why it should cost $50,000 a year to put a teenager in front of a qualified instructor for 18 hours a week.

What we have is an education monopoly imposed by the accreditation process.

I sincerely hope the on-line colleges start seriously cutting into those fat education profits.

Nope. I'm surprised how many both libs and cons make this (IMO) mistake.

The cost of an education is based on what people are willing to pay for it, not what the
costs are to provide it. If people are unwilling to pay, they will not be buyers.
Like a lot of things, it's often about perception of value. Right now, college degrees
are perceived as being highly valuable. So buyers are eager to buy and willing to pay
high prices.

Same thing applies to the old argument some use to defend owners against 'greedy' players,
that increased player salaries will drive increases in ticket prices.

No.

Ticket prices are not primarily driven by costs, nor is education. They are driven by the willingness
of buyers to pay the price.

BTW
Bravo for online colleges to create competition for education buyers. That said, a significant
number of these purely for profit educational enterprises haven't been doing such a great
job preparing their graduates for life after school. The accreditation process may not be
perfect and have some unintended consequences, but I'm unconvinced that it can be
simply gotten rid of. The failure of these schools demonstrates why that is.

Cost is based on supply and demand. There is plenty of demand, but as dckingsfan pointed out, the problem in higher education is the lack of supply. And that's a fault of government policies that maintain an education monopoly.

[dckingsfan]

Correct, the emphasis should be on increasing the number and type of higher learning opportunities to drive down the costs. And there are a myriad of ways to accomplish that.

The current process of providing guaranteed funds is just having a larger number of individuals chase a smaller number of resources - if you want to create an inflationary trend, that is how you do it. The current administration has wiffed on this one. Instead of working with "for profit" institutions to drive down costs - they have essentially put a number out of business - just increasing the problem.

I haven't seen good proposals from either party on this - Hillary? Jeb?

[dobrojim]

I was taught there is a law of supply and a law of demand. Not that there is a law of supply and demand.

Think logically, price must be driven by the willingness of potential buyers to pay. The cost of producing
the item is not really relevant as long as the buyer is willing to pay. Another potential seller can enter
the picture and compete by offering something at a lower price, but the buyer doesn't care what their
cost is either, only whether they are willing to pay ie an agreed upon price.

A fountain drink at McDonalds costs pennies but buyers routinely buy for much more than that.
Because they don't care what the cost to produce was, only what they are willing to pay.

[dobrojim]

Cost is based on supply and demand. There is plenty of demand, but as dckingsfan pointed out, the problem in higher education is the lack of supply. And that's a fault of government policies that maintain an education monopoly.

Consumers/buyers are willing to pay because of perceived value (to them), not because it cost a certain
amount to produce.

Education consumers believe in paying for accredited universities. That's why they go there.

[dobrojim]

Correct, the emphasis should be on increasing the number and type of higher learning opportunities to drive down the costs. And there are a myriad of ways to accomplish that.

The current process of providing guaranteed funds is just having a larger number of individuals chase a smaller number of resources - if you want to create an inflationary trend, that is how you do it. The current administration has wiffed on this one. Instead of working with "for profit" institutions to drive down costs - they have essentially put a number out of business - just increasing the problem.

I haven't seen good proposals from either party on this - Hillary? Jeb?

But some of these for profit schools have been really bad to the point of committing fraud
in lying about how well their graduates do after convincing perspective students to incur
large debt burdens. It's a mixed bag. Competition is good but opacity in the marketplace
leads some buyers to end up with far less than they were told they would get in terms
the employment marketability.

[I_Like_Dirt]

Personally, I think a lot of countries should be look at the pros and cons of Germany's education system. I'm no expert, and it seems as though there would be some obvious drawbacks, but somehow in a country where housing costs are kept relatively reasonable, they manage to do things dramatically differently and have undergrad courses for a nominal administration fee, including for most international students (though the catch being that you have to speak German other than a few English-language institutions). I see this as one of the many examples where the debate over public/private misses the point completely - success can be had either way provided things are well-done.

I think Forbes covered a lot of the issues outlined here:

click

There are clearly several forces at play here, though. A few decades ago, education costs were more reasonable. They have vastly outpaced inflation. But we have a driving force of the lesser advantaged to be equally advantaged, while the force of the market to avoid educating their own employees, but also not requiring as many of the types of graduates come out of higher education, combined with the needs of the advantaged to be able to pay to maintain their advantages. I'm simplifying, to be sure, but I don't see any of those particular forces as being directly wrong. Regardless of which path is chosen, though, a lot of thought is going to need to be put into the planning of how things are going to work to achieve the desired goals, because privatize universities and online educations have failed quite a bit, too, as have public ones that have mastered the magic of making money disappear. It seems to me that it might be ideal to have some sort of partnership where businesses take some ownership for the education levels they require for their own employees by working with public institutions, but that's me dreaming and not proposing any tangible solutions.

[nate33]

I was taught there is a law of supply and a law of demand. Not that there is a law of supply and demand.

Think logically, price must be driven by the willingness of potential buyers to pay. The cost of producing
the item is not really relevant as long as the buyer is willing to pay. Another potential seller can enter
the picture and compete by offering something at a lower price, but the buyer doesn't care what their
cost is either, only whether they are willing to pay ie an agreed upon price.

A fountain drink at McDonalds costs pennies but buyers routinely buy for much more than that.
Because they don't care what the cost to produce was, only what they are willing to pay.

You are not addressing the issue. If the college universities are so profitable (and they are), then why isn't more competition entering the field?

In his book Better/Cheaper College, Fried carefully calculated that a quality liberal arts education at a residential college only needs to cost around $8,000 per year. The revenues that most schools receive, however, is considerably in excess of that amount. Looking at the figures, Fried concludes in his paper, “Based on tuition revenues alone, the average private undergraduate school makes about $5,500 per student. When donations and endowment income are added, profits jump to $12,800 per student.” That is twice the profit margin earned by for-profit University of Phoenix, he states.

Public universities are also very profitable. While tuition is generally lower (except for out-of-state students), they receive large amounts of state operating support. Fried calculates the average per student profit at $11,000. The “profits” are spent on his list of educationally unnecessary items like low teaching loads and excessive compensation.

http://www.popecenter.org/commentaries/article.html?id=2564

[dobrojim]

I would say that over the last several decades, there has been significant competition for education consumers
as evidenced by the increasing number of for profit institutions as well as institutions generally.
Perhaps it is a per capita increase, perhaps it's not. In either case, there clearly is some
competition going on. Any parent of a HS senior can show you the reams of junk mail they
receive from colleges competing for students.

When buyers are sufficiently motivated, they have and will consider alternatives.

[dckingsfan]

Correct, the emphasis should be on increasing the number and type of higher learning opportunities to drive down the costs. And there are a myriad of ways to accomplish that.

The current process of providing guaranteed funds is just having a larger number of individuals chase a smaller number of resources - if you want to create an inflationary trend, that is how you do it. The current administration has wiffed on this one. Instead of working with "for profit" institutions to drive down costs - they have essentially put a number out of business - just increasing the problem.

I haven't seen good proposals from either party on this - Hillary? Jeb?

But some of these for profit schools have been really bad to the point of committing fraud
in lying about how well their graduates do after convincing perspective students to incur
large debt burdens. It's a mixed bag. Competition is good but opacity in the marketplace
leads some buyers to end up with far less than they were told they would get in terms
the employment marketability.

Two different issues. Cutting off all funding for those types of schools both good and bad and enforcing laws like fraud.

There are many public schools that fall in those same categories.

Regardless, come up with a plan to help increase the number of those institutions and then set up a way for them to be tested. But sometimes it is politically easier just to shut them down to say you are doing something. I don't hold out any hope for this administration to do the right things on this issue. So... Jeb, Hillary?

[dckingsfan]

Personally, I think a lot of countries should be look at the pros and cons of Germany's education system. I'm no expert, and it seems as though there would be some obvious drawbacks, but somehow in a country where housing costs are kept relatively reasonable, they manage to do things dramatically differently and have undergrad courses for a nominal administration fee, including for most international students (though the catch being that you have to speak German other than a few English-language institutions). I see this as one of the many examples where the debate over public/private misses the point completely - success can be had either way provided things are well-done.

I think Forbes covered a lot of the issues outlined here:

click

There are clearly several forces at play here, though. A few decades ago, education costs were more reasonable. They have vastly outpaced inflation. But we have a driving force of the lesser advantaged to be equally advantaged, while the force of the market to avoid educating their own employees, but also not requiring as many of the types of graduates come out of higher education, combined with the needs of the advantaged to be able to pay to maintain their advantages. I'm simplifying, to be sure, but I don't see any of those particular forces as being directly wrong. Regardless of which path is chosen, though, a lot of thought is going to need to be put into the planning of how things are going to work to achieve the desired goals, because privatize universities and online educations have failed quite a bit, too, as have public ones that have mastered the magic of making money disappear. It seems to me that it might be ideal to have some sort of partnership where businesses take some ownership for the education levels they require for their own employees by working with public institutions, but that's me dreaming and not proposing any tangible solutions.

Good point dirt - there are many different was to approach this problem. But our current solution doesn't work well and discriminates against the poorest among us. Working with businesses could be one approach.

[dobrojim]

Donald?

side note - I harken back to the early and early-mid days of the last prez nominating season when the
GOP went through a series of flavors of the week before taking a deep sigh and realizing Mitt was the
best they could do. I wouldn't be surprised if something similar happened again within the GOP.

[dckingsfan]

Donald?

That would be pretty laughable - at least there would be the entertainment factor.

[dobrojim]

So would have Herman Cain or Rick Perry.

[dckingsfan]

So would have Herman Cain or Rick Perry.

Walker might have been okay but then he took a hard right on the social issues.

Looking more and more like Jeb vs Hillary

[dobrojim]

I'm not sure Walker's bright enough or maybe brave enough.
Doesn't want to say if he believes in evolution but is quick to say people choose
their sexual orientation. He's either pandering or poorly informed.

[dckingsfan]

I'm not sure Walker's bright enough or maybe brave enough.
Doesn't want to say if he believes in evolution but is quick to say people choose
their sexual orientation. He's either pandering or poorly informed.

Plus, foreign policy is a hot sticky mess right now - not sure he could handle that any better than Obama when he first started.

[fishercob]

I know it makes me a bad person, but I want Brian Encinia to suffer and die in jail.

[dobrojim]

Seems doubtful that anything will be discovered but I do wonder what the investigation into
her death in jail will find. I would certainly want to know if Encinia or any of his closest
friends on the force had alibis for their whereabouts during whatever window of time
the coroner was able to narrow the time of death to.

Encinia certainly made clear that he was unfit to be a policeman.

This reminds me that one of my guitar heros, Roy Buchanon, died in a Fairfax county jail after
being arrested for something like drunk in public. The claim was that he committed suicide.
I'm not sure that suicide finding was ever seriously scrutinized.

It should not be possible to commit suicide in jail. Yes I understand that a determined person
can be very creative, but it still seems to me that it ought to be possible to preclude suicide.

[Induveca]

I'm not sure Walker's bright enough or maybe brave enough.
Doesn't want to say if he believes in evolution but is quick to say people choose
their sexual orientation. He's either pandering or poorly informed.

Walker strikes me as a real scumbag. Completely disingenuous. To say he wants a constitutional amendment to ban gay marriage, then have his kids and wife "publicly" disagree with him. Then he says they still live happily as a family despite their differences.

It's the most blatant political bull staging I've ever seen in the U.S.