I wrote my last post just prior to the State of the Union Address and admitted to the foolishness of doing so.  I am not writing today to toot my own horn, but I have to say, I was not too far off.  Let me remind you of the promises of Huey Long’s Share Our Wealth Plan:  guaranteed income, home, car, radio, college education, retirement, vacation time for American workers and medical care for veterans.  Realizing that the country already provides the latter (a well earned benefit for our fighting service men and women!), we need to look for the other issues in President Obama’s address.  Here is one inclusive quote: “That means helping folks afford child care, college, health care, a home, retirement, and my budget will address each of these issues.”   In short, I came pretty close to calling it.  President Obama also addressed the issue of increasing minimum wage because Americans cannot live on $15,000 per year.  Yet he went on to say the following:  “These ideas won’t make everybody rich, won’t relieve every hardship. That’s not the job of government.”  I agree and I am glad to see there is a limit to what the President thinks is the role of government, but it seems to be quite a contradiction to have this line immediately after saying the government should raise minimum wage.  My wife, like millions of Americans, works part-time for minimum wage (or just slightly more due a raise!).  Those wages help our family make ends meet.  Like most Americans working for minimum wage, we are not trying to live on it.  I will leave it to my more economically astute colleagues to address the minimum wage boondoggle, but this is a historic debate and one we Americans have been having for generations.  Should the government guarantee that every job provides a living (or, in more politically incorrect days when the concept of the nuclear family was still valued, what used to be called a “family”) wage?  The ramifications of such a proposal are significant and would put our economy on the fast track to devastation.  In very simple terms, jobs should provide what the market bears or the all-important force of incentive will be lost.  Just  look at any communist economy in the 20th century and you will see what happens when incentive is removed from the system.

Having traversed several rabbit trails and patted myself on the back gratuitously for calling the President’s shots (let us be honest, it did not take a crystal ball), I want to hone in on one of the more provocative proposals.  I have copied the President’s comments on free community college below:

“That’s why I am sending this Congress a bold new plan to lower the cost of community college to zero.   …Keep in mind, 40 percent of our college students choose community college. …this plan is your chance to graduate ready for the new economy, without a load of debt. Understand, you’ve got to earn it. You’ve got to keep your grades up and graduate on time.”

There is much to say about this proposal.  While the president boasted that the deficit had fallen by two-thirds in the last year, that drop is from the largest deficits in American history–deficits that eclipsed the profligate spending of the Reagan years when he compromised with a Democratically controlled Congress to get the military spending we needed to end the Cold War.  The idea of providing free community college to anyone who wants it on top of the largest spending program in American history, the Affordable Care Act–the cost of which we cannot even estimate–surpasses any reasonable understanding of what a government should do.   We finally found out, in this speech, however, what he means when he says that those who obtain this free education would have to work for it.  He told us that “earning it” entails getting passing grades.  So, if students fail, will they have to pay for the course?  What happens if a student does not complete the coursework in two years?  What about the percentage of American students  (not insignificant) for whom college is not a realistic goal, especially in light of the well-known failures of our public education system?  If they fail out of the community college system, they will not have the education required to obtain a higher paying job, and we will strap them with the debt from community college since they did not keep up their end of the bargain.   Well, combining this program with his plan to raise minimum wage to a level that provides a livable wage, there will be very little reason for someone to go to community college.   These two initiatives actually counter each other.  More importantly, the real solution to the problem of an under-prepared workforce is to leave the issue up to the marketplace.  Companies are already partnering with community colleges to provide the needed workers, as the President noted in his address.  Why should the government get involved when there are great private models already developing that can handle the problem.  Businesses are not going to wait around for government to meet their needs.   So, let them handle it!

Finally, having said all of this, the most problematic issues associated with this plan are the logical results.  Now, I admit, that I have skin in the game.  I work for a private, four year undergraduate institution.   Regardless of my connection, this program would devastate four year institutions across the board (public or private) by pulling underclassmen out of those schools and into the community colleges.   Some students who might have gone for a four year degree will not.  Others will do two years at the community college for free and finish at a four year institution.  The problem is that the first and second year courses are some of the least expensive courses for four year institutions.  So, a large percentage of students will only be coming to the “four year” institutions for the more expensive courses of the latter two years.  This will simply be unworkable for most institutions, particularly private ones.  The end result will be that this program will drive the private institutions out of business, removing positive competition from the educational marketplace, reducing the overall quality of the educational offerings, and bringing the entire higher educational system under federal control.  Do I need to discuss why this will be a negative development?  Let me remind you how well the government has done with secondary education in this country.  The federal government has been unable to wrest control of accreditation for higher learning institutions from the private regional accrediting bodies, and the President’s plan will provide an end run that will accomplish the goal.  Americans need a choice.  The President’s plan will cause more deficits, drive private institutions out of the market, lower the quality of the education provided, and bring it all under the control of the federal government.    This is a choice we can live without.