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What with the dismal record of schools operated by governments, a for-profit educational enterprise has always looked to be a promising business. That was before this administration and the animus it has brought towards private market solutions. WSJ Editors tell the story of the collapse of Corinthian Colleges.
The Obama Administration has targeted for-profit colleges as if they are enemy combatants. And now it has succeeded in putting out of business Santa Ana-based Corinthian Colleges for a dilatory response to document requests. Does the White House plan to liquidate the IRS too?
A month ago the Department of Education imposed a 21-day hold on Corinthian’s access to federal student aid because it “failed to address concerns about its practices, including falsifying job placement data used in marketing claims to prospective students.” The funding freeze triggered a liquidity crisis, which has culminated in Corinthian’s decision to wind down or sell its 97 U.S. campuses.
Like the for-profit college industry, Corinthian draws roughly 80% of its revenues from federal student aid. Yet this is a function of its demographics. For-profit schools educate a larger share of low-income, minorities, veterans and single mothers than do nonprofit and public colleges. Eighty percent of their students lack parental financial support. …
… Most of the investigations involve trumped-up charges of misleading job placement rates, which federal law requires for-profits—but not public and nonprofit colleges—to document and disclose. But here’s the rub: There’s no standard definition of “job placement.” …
… Students enrolled in colleges that are to be shut down will be allowed to finish their degrees, transfer or withdraw with a full refund. However, these students may not be able to find the same programs at nearby community colleges or for-profit schools. Students are the collateral damage but the real target of this war on Corinthian are investors in an industry that Democrats don’t like: They can destroy you even before they have any evidence.
The above makes this a good place for a post from the Mises Economics Blog on intellectuals’ hostility towards free markets.
… The intellectuals are a paradoxical product of the market economy, because “unlike any other type of society, capitalism inevitably and by virtue of the very logic of its civilization creates, educates and subsidizes a vested interest in social unrest.” Like Hayek, Schumpeter described intellectuals broadly as “people who wield the power of the spoken and the written word.” More narrowly, “one of the touches that distinguish them from other people who do the same is the absence of direct responsibility for practical affairs.” That is, intellectuals do not participate in the market (at least not in the areas they write about), and do not generally rely on satisfying consumers to earn a living. Add to this their naturally critical attitude—which Schumpeter argues is the product of the essential rationality of the market economy—and it is easy to see why intellectuals would be hostile to the market.
In other words, intellectuals are often out of place in entrepreneurial societies. The growth of the intellectual class is not a response to consumer demand, but to the expansion of higher education. Passing through the higher education system does not necessarily confer valuable skills, but it often does convince graduates that work in the market is beneath them: …
And here comes Kevin Williamson trying to explain why profit has become a dirty word.
People intensely dislike profits. The belief that turning a profit is tantamount to operating some sort of con is disturbingly common. …
… The crude version of exchange — which is, unhappily, the common version — is inclined to suspect that there is an objectively correct price for a good, and that profit comes from duping somebody into paying more than the correct price for it. That error is fundamental to Marxism and other anti-capitalist philosophies, and it is implicit in such social phenomena as the anti-advertising movement, “Buy Nothing Day,” and similar political tendencies. …
… The Left often tries to explain its objection to free prices and wages in terms of asymmetrical economic power, and that analysis is not without some practical meaning: If you have been unemployed for six months, have $20,000 in debt, and are down to your last $4, then you are in a pretty poor negotiating position vis-à-vis most potential employers. But what is true at the anecdotal level is not true at the aggregate level: …
… In the entire history of economic thought, nobody has ever been able to demonstrate that there is an objectively “right” price for anything separate and apart from the subjective valuation that happens in the marketplace. Progressives like speeches about diversity, but they loathe the actual diversity of views and desires, especially the idea that prices should be sorted out according to the billions of subjective valuations in the marketplace through a process that nobody is in charge of. (In Dante’s Hell, the engraving reads: “Abandon Hope All Ye Who Enter Here.” In Ezra Klein’s Hell, the engraving reads: “Nobody In Charge.”) Implicit in this belief is that most people — consumers and workers alike — are too stupid or too weak for us to allow them to act on their own subjective valuations, that we are compelled by . . . justice, efficiency, expert opinion, whatever . . . to substitute our own judgment for theirs. And then all you need is two government studies and a rent-a-philosopher writing in the New York Times to proclaim that there is some real-world basis for your own preferences as compared to those of the rabble on whose behalf you have just deputized yourself to organize the world. The language of “social justice” is largely a sort of moral minstrel show designed to distract from the real argument, which is: “You’re too stupid to be entrusted with your own life.” …
Glenn Reynolds writes about the “New Class.”
Life is hard. It’s harder still when an entire class of people with their hands out stands between you and success.
Unfortunately, that’s increasingly the problem, all around the world. A recent New York Times piece tells the story of a Greek woman’s efforts to survive that country’s financial collapse. After losing her job, she tried to start a pastry business, only to find the regulatory environment impossible. Among other things, they wanted her to pay the business’s first two years of taxes up front, before it had taken in a cent. When the business failed, her lesson was this: “I, like thousands of others trying to start businesses, learned that I would be at the mercy of public employees who interpreted the laws so they could profit themselves.”
This phenomenon isn’t limited to Greece, or even to capitalistic societies. Dissident Soviet-era thinker Milovan Djilas coined the term “the New Class” to describe the people who actually ran the Soviet Union: Not workers or capitalists or proletarians, but managers, bureaucrats, technocrats, and assorted hangers-on. This group, Djilas wrote, had assumed the power that mattered in the “workers’ paradise,” and transformed itself into a new kind of aristocracy, even while pretending, ever less convincingly, to do so in the name of the workers. Capitalists own capital, workers own their labor, but what the New Class owned was political control over other people’s capital and labor. Those Greek bureaucrats’ power didn’t come from making things. It came from being able to make people — like our pastry chef — jump through hoops before they could make things. …
The College Fix with a post that help explains why colleges have so many ignorant graduates.
Young America’s Foundation has surveyed the required reading programs for incoming college freshmen nationwide and found that, over the past three years, none of the colleges have assigned a conservative-leaning book.
None of them.
Young America’s Foundation surveyed the top 50 schools as noted by Forbes, and “found that many of the ‘required’ books only offered left-wing perspectives on topics such as race, feminism, socialism, inequality, and wealth redistribution.”
Here’s a sample:
Americanah by Chimamanda Nogzi Adichie (required at DukeUniversity and PomonaCollege in 2014) This is a fictional story of a young Nigerian woman and man who immigrate to the United States. Throughout the book, the author delves heavily into concepts of race. Yet, at the same time, she criticizes everyone but the protagonists for their prejudices.
The Sixth Extinction by Elizabeth Kolbert (required at LafayetteCollege in 2014) This book argues that humanity is causing a sixth mass extinction due to global warming and advocates environmental sustainability.
And because we need some humor, here’s Andy Malcolm with the late night kind.
Conan: Michelle Obama says she wants Americans to elect a woman president “as soon as possible.” So even she’s had enough of President Obama.
Meyers: A new report says “Brooklyn” is now one of the country’s most popular baby names. Still the least popular baby name, “Staten Island.”
Conan: I’m halfway through Hillary Clinton’s book. I don’t want to ruin the ending, but I bet she kills this guy “Bill.”