Australian Politics
Why grants to students primarily benefit colleges
Econ 101 instructors take note—a new illustration of the important microeconomic concept of incidence just dropped. Economists emphasize that there is a world of difference between legal and economic incidence. Legal incidence specifies who, on paper, has the right to claim a benefit or the obligation to bear a liability. Economic incidence analyzes which party receives a benefit or bears a cost in actuality. Who gets to command more or fewer resources?
Here’s how Art Carden and I discuss the incidence of a subsidy in a forthcoming book manuscript:
Subsidies follow the same logic. Whether the subsidy lands on the buyers or sellers is irrelevant. It sticks to whoever is the less price-sensitive side. Subsidies to corn consumers, for instance, often end up in corn growers’ pockets because they raise corn demand. Food stamps raise demand for approved foods: browsing Amazon.com for foods people can buy with funds from the Supplemental Nutrition Assistance Program (SNAP), we find Corn Flakes, Corn Chex, Corn Nuts, Corn Pops, corn chips, corn tortillas, cornmeal cornbread mix, corn salsa, canned corn, creamed corn, and popcorn, plus all sorts of other corn derivatives like corn syrup-sweetened soft drinks and candy corn (first ingredient: sugar. Second ingredient: corn syrup). The loud part of the food stamp program is that it helps poor people buy food. The quiet part is that it passes the taxpayers’ money to corn farmers through the pockets of the poor. It’s no accident that the Department of Agriculture administers SNAP while Congress funds it through the Farm Bill.
Economic incidence was also unintentionally illustrated via a recent Time article on the fortieth anniversary of the Supreme Court decision in Grove City College v. Bell. Grove City, my alma mater and employer, had long sought complete independence from government entanglement with higher education. When Title IX was passed, as Time puts it, “complications arose.”
The Time article reads, “On four occasions between 1976 and 1977, Grove City College refused to sign an Assurance of Compliance form needed for students to receive Basic Educational Opportunity Grants (BEOGs) and Guaranteed Student Loans (GSLs). It contended that students received federal aid, not the college.”
The government responded by saying the quiet part out loud: Legal incidence is not synonymous with economic incidence.
The Time article continues, “The Department of Health, Education, and Welfare (HEW, later ED), argued that the college was the ultimate beneficiary of the federal funds and needed to sign the compliance for students to receive those fund as of 1977.”
In other words, the federal government admitted what economic analysis already knew: Student loans are “ultimately” a handout to colleges and universities. More concretely, the loans increase the incomes of college administrators, faculty, and other employees.
Yes, subsidies pass through the “pockets” (legal incidence) of students, but they end up in the “bank accounts” (economic incidence) of schools. Put another way, student loans increase the demand for higher education, ultimately increasing its sticker price.
In the long run, once the dust has settled, some students pay more, some pay less, resources flow to higher ed (what’s the opportunity cost?), taxpayers’ wealth falls, and society overall is poorer. A benefit to some (e.g., higher ed employees) is not a benefit to all—and in this case it’s not even necessarily a boon to students themselves.
https://blog.independent.org/2024/02/29/saying-the-quiet-part-out-loud/
******************************************************Rhode Island School District Sends 8,800 Pages of Emails to Leftist hate site
When concerned mom Nicole Solas requested all emails from her Rhode Island school district to the Southern Poverty Law Center, the request turned up more than 8,000 pages of communications, and the district told her it would cost $6,629.25 for it to process the SPLC documents.
A brief refresher: The SPLC began as a civil rights nonprofit, but has morphed into a far-left fundraising machine and smear factory. As I wrote in my book, “Making Hate Pay: The Corruption of the Southern Poverty Law Center,” it weaponized its history of suing KKK groups into bankruptcy to smear its political and ideological opponents, placing mainstream conservative and Christian groups on a “hate map” alongside Klan chapters.
Solas, a Rhode Island mother, had briefly enrolled her daughter in kindergarten in the South Kingstown School District. She withdrew her daughter after the school district sued her on account of Solas’ multiple public records requests to reveal whether the district taught kids the principles of critical race theory, a lens that teaches kids to view white people as oppressors and black people as oppressed.
Solas told The Daily Signal that she requested “emails sent by [South Kingstown School District] employees” to “weed out spam emails automatically sent by SPLC to schools.”
The SPLC runs an education program long known as “Teaching Tolerance.” In 2021, after the George Floyd riots in Minneapolis, the SPLC apparently decided that “tolerance” wasn’t woke enough, so it rebranded the program to “Learning for Justice.” The program has advocated for lessons that inculcate critical race theory, transgender identity, and pornographic books in schools. Last year, the SPLC added parental rights groups, including Moms for Liberty, to its “hate map,” in part demonizing those groups for opposing sexually explicit books in school libraries.
The SPLC has bragged that it sent “over 400,000 educators” the “Teaching Tolerance” magazine, “reaching nearly every school in the country.” This language disappeared from the website, however, as more Americans look critically at the SPLC.
The SPLC hides its radical agenda behind benign-sounding initiatives such as celebrating diversity and inclusion. Many on the Left have adopted its rhetoric.
The SPLC’s “hate map” has caused real-world harm. In 2012, a terrorist targeted the Family Research Council for a mass shooting using the “hate map.” He told the FBI he aimed to kill everyone in the building, but the building manager prevented the slaughter, in the process sustaining bullet wounds. The shooter pleaded guilty to terrorism charges and is currently serving a 25-year prison sentence.
Early in the 2000s, the SPLC began branding some activist groups that opposed illegal immigration “anti-immigrant hate groups” and putting them on the “hate map.” The SPLC maintains that hatred drives the movement calling for the enforcement of immigration laws, even as the Biden administration sets new records for the number of illegal aliens encountered at the southern border.
In the past two weeks, the SPLC has demonized Texas Gov. Greg Abbott, a Republican, for attempting to close the border when the Biden administration refuses to do so. Abbott is attempting to enforce federal laws that President Joe Biden will not enforce, yet the SPLC claims Abbott is seeking to establish “state supremacy over the border.”
The SPLC noted Abbott’s attempts to install razor wire between Shelby Park in Eagle Pass, Texas, and the southern border, the Biden administration’s decision to cut the wire, and the Supreme Court ruling allowing the Biden administration access.
“This is part of Abbott’s broader anti-immigrant agenda, which includes an attempt to stop a supposed ‘invasion’ of Texas by migrants,” SPLC’s Caleb Kieffer and Rachel Goldwasser wrote. “Claims of ‘invasion’ have become a trope among right-wing lawmakers and the hard right despite dangerous similarities to the racist ‘great replacement’ conspiracy theory.”
The SPLC did not acknowledge that border agents encountered a record 3.2 million illegal aliens in fiscal year 2023 (a number larger than the combined populations of Hawaii, Alaska, and Vermont), nor that Democratic mayors are requesting help to deal with the large numbers of aliens in the country. This isn’t a “great replacement conspiracy theory”; it is a blatantly obvious fact that millions of illegal aliens are taking root in the U.S., and the SPLC’s move to dismiss critics as racist in the face of that fact should set off alarm bells across America.
The SPLC also demonized the effort to impeach Homeland Security Secretary Alejandro Mayorkas for failing to enforce immigration law and prevent mass hordes of aliens from entering the country. In an article focused on a militia group’s efforts to take border enforcement into its own hands, Goldwasser claims the militia’s action represents “a product of the anti-immigrant environment produced by the xenophobic posturing of hate groups and politicians, and the controversial impeachment of Alejandro Mayorkas, the first Latinx and immigrant to lead the Department of Homeland Security.”
Goldwasser suggested that Mayorkas faces an impeachment effort not because he has failed to enforce immigration law and prevent the border crisis, but because he is the first Latino to head the Department of Homeland Security. She used “Latinx,” a transgender neologism, in order to avoid the clear masculine ending in Spanish for “Latino.”
The SPLC did not reserve all its vitriol for Republicans, however. Kieffer and Goldwasser noted that Biden has supported a Senate bill that included minor border security measures and changes to the asylum process in exchange for funding to Ukraine in its defense against Russia’s invasion.
“The bill worried immigration advocates, who viewed it as being extremely harsh and out of step for the needs of border communities,” they wrote. “The Senate relief package debacle shows the same anti-immigrant animus undergirding impeachment of Mayorkas and the standoff in Eagle Pass.”
It seems the SPLC’s partisan attacks against pro-enforcement groups have so unmoored the organization from reality that it is unwilling to accept the blatantly obvious truth. Recent polls have showed former President Donald Trump, who currently leads in the Republican presidential nominating proces, ahead of Biden in key swing states. Americans give Biden poor marks on the border, which helps explain the president’s belated support for some immigration restrictions. Biden knows he has to make up ground on this issue, and he’s furiously working to make it seem like the border crisis is Republicans’ fault.
Yet the SPLC hasn’t gotten the memo. It’s so focused on branding as “hateful” anyone who dares to speak the plain truth about the border crisis that it turns against Biden, the very president the SPLC brags about influencing and with whom SPLC leaders have met at least six times personally.
The SPLC’s radical agenda of critical race theory, transgender lessons, and apparent hatred for the very idea of national borders has no place in America’s classrooms. Solas is right to demand answers from her Rhode Island school district, and parents across the country should be on the lookout for the SPLC’s influence in schools.
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"Accord" proposals won’t do anything to fix Australia's universities
JUDITH SLOAN
Through the years I have become something of a dab hand at reading government reports. They are almost always far too long, badly argued and littered with carefully chosen photographs. I figure I can save my readers the trouble of wading through these tomes by simply cutting to the chase.
The final report of the Australian Universities Accord, at around 400 pages, is dubious and unhelpful. It is built on a highly unconvincing premise and works its way from there. On the basis of a bit of arm-waving by a consultant and asking around, the panel concludes the tertiary education attainment rate must rise from its current figure of about 60 per cent to at least 80 per cent of the workforce by 2050. For those aged 25 to 34, the proportion with a university education must rise from 45 per cent to 55 per cent by 2050.
Let’s face it, other guesses are equally plausible. After all, artificial intelligence is about to cut a swath through the workforce, meaning many university-educated workers may be out of jobs as machines replace their roles. And just in case you think it’s simply those who undertake repetitive, low-level jobs who are in the firing line, it seems AI can be highly creative and solve problems, to boot.
There is also the important issue of credentialism. It’s not as though jobs always require a university education – or indeed completion of school. But university education creates its own momentum by giving a head start to other applicants without qualifications. It doesn’t actually add to productivity, it simply alters the pecking order. To the extent that this is the case, the government – aka taxpayer – shouldn’t be investing even more in university education, particularly certain courses.
The accord makes much of the lack of equity in the admission to universities. Those from poor socio-economic backgrounds, those from regional areas and First Nations students are much less likely to go to university, let alone complete a course, relative to their better-off city-based cousins. Reflecting the backstory of federal Education Minister Jason Clare, who was the first in his family to attend university, the panel makes several suggestions to “expand opportunity to all”.
But here’s the rub: many students simply are not suited to university study and it is selling them a pup to suggest university is the best post-school pathway for them. I once taught economic statistics to university students with low entry scores – it was a nightmare. Most of them struggled, many lost self-confidence and a reasonable chunk failed. My advice to many of them was to consider alternative opportunities, such as becoming a tradie.
We have had a recent experiment with allowing universities to enrol any student they deem to have the necessary qualifications – the so-called demand-driven system of enrolments. Of course, “necessary qualifications” is a rubbery concept and allowing self-serving universities to set the entry standards is really akin to handing the keys to the chook house to the fox.
It is clear what happened when the demand-driven system was in full flight: the participation in higher education of marginal groups increased but the rate at which they completed courses was significantly below those with higher marks. According to higher education expert Andrew Norton, “students with ATARs (year 12 ranking) below 60 are twice as likely to drop out of university as students with ATARs over 90”. He estimates that those who fail to complete a university course are, on average, stuck with a debt of $12,000 to pay off.
Working backwards from the accord’s arbitrary targets, students with an ATAR as low as 45 will now be expected to go to university. And this in the context of sliding school performance across the past two decades.
Rather than accept that most of these students simply are not suited to university study, the panel wants additional funding, foundation courses, study hubs and the like. On the face of it, this just looks like a waste of resources given there will be plenty of jobs in the future that don’t require a university education.
Is someone with a bachelor of arts in cultural studies really more qualified than a plumber?
The one recommendation of the report that gave me a good laugh deals with the establishment of a higher education future fund. At this rate we’ll have future funds for everything. The source of funds will be a tax on our best universities – probably the Group of Eight – with the federal government matching their contributions. It’s a bit like how the Australian Football League operates: penalise the top teams to level out the competition. It’s really a form of socialism.
While this might make some sense for a football code, it makes no sense for a university system that should be focused on attaining global excellence. Why would we want to tax the best universities to spray money around with unknown outcomes? If I were heading up one of the Go8 universities I would be objecting in the strongest and loudest terms.
As is the case with most government reports, there are suggestions for more reviews and new bureaucratic agencies. There should be a centre of excellence in higher education and research (refer to previous paragraph); a survey on the prevalence of racism in higher education; and a First Nations-led review of higher education.
The most significant is the proposal to establish an Australian tertiary education commission, “a statutory, national body to plan and oversee the creation of a high quality and cohesive tertiary education system to meet Australia’s future needs”. You will be pleased to know one of the functions will be to negotiate “mission-based compacts for universities”, whatever that means.
The reality is we have had such agencies in the past and they haven’t worked well. Where does the minister sit in all this, let alone the federal Department of Education? The appointed commissioners often get ahead of themselves and the outcomes are often extremely disappointing.
Don’t get me wrong here: I think there is plenty wrong with the Australian university system.
Many of our universities are too big; they are clones of each other but of highly variable quality; and many offer a very poor offering to domestic students. The links with vocational education are patchy at best.
But the 400-page accord report is not the path to fixing these problems: indeed, most of the recommendations would make them worse and cost the taxpayer a small fortune. Obviously, the notion of opportunity cost has not been front of mind to the panel. The government would be ill-advised to spend even more money on a bloated, poorly performing sector based on made-up targets.
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My other blogs: Main ones below
http://dissectleft.blogspot.com (DISSECTING LEFTISM)
http://antigreen.blogspot.com (GREENIE WATCH)
http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)
http://australian-politics.blogspot.com/ (AUSTRALIAN POLITICS)
http://snorphty.blogspot.com/ (TONGUE-TIED)
http://jonjayray.com/blogall.html More blogs
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Evelyn Rae, a conservative Australian political commentator
Margo Robbie -- a beautiful australian
My son Joe at ANU
One of the happiest pictures ever -- Cleo Smith, aged 4
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