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We made very similar mistakes with college education and housing. Both things that we’d like people to have more of, in theory. In both cases the government pr
by habosa 3y ago
We made very similar mistakes with college education and housing. Both things that we’d like people to have more of, in theory.
In both cases the government provided massive subsidies in the form of loans and tax breaks.
That does wonders for the demand side. However the government didn’t find a way to increase supply (esp of the good stuff) at the same rate nor did they find a way to prevent the excess profits generated from falling into the same few hands.
So what did we get? A seemingly endless cycle of price growth.
- oerpli 3y ago[flagged]
- macintux 3y ago> Please don't comment on whether someone read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that". https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- Gimpei 3y agoIndeed. And in fact, from what I hear Stanford would like to expand its student body. Guess what’s stopping it? Yep, Palo Alto NIMBYs.
- parineum 3y agoAKA, the community.
- Schiendelman 3y agoNot the community. A small subset of the wealthiest people in the local area. And keep in mind that if the people in the local area have successfully excluded others, they may have dispersed people with interests elsewhere. There’s basically no reason they should have a say at all about what someone else wants to do with their own property.
- snoman 3y agoI have trouble sympathizing with either side here. I’m not dialed into the issue, but I imagine that the homeowners in the area are property-tax paying members of the community with just as much voice as anyone else in the community. It’s also not like there’s nowhere else on earth to put a school campus either. They’d hardly be the first school with multiple campuses that are separated if they didn’t insist on building it where they currently are.
- Schiendelman 3y ago“Insist on building it where they currently are” - telling them they can’t doesn’t mean “oh go build it somewhere else”. It means they have to sell that land, go buy other land (which could take decades), and then have the same fight. Telling people what they could use their land for (within building code) is only legal in the US because the SCOTUS said it was legal to in order to keep Black people out of neighborhoods. It should be unconstitutional, and would be if not for racism!
- bluGill 3y ago
- tptacek 3y agoThe article makes the opposite claim. Rather than a seemingly endless cycle of price growth, the article claims that the cost of attendance has fallen in constant dollars. However, the nominal cost of attendance, which bears no relationship to the actual cost, because it's offset by pro forma need-blind merit-blind "scholarships", has risen, because the top-line nominal tuition cost is a market sorting mechanism among schools.
- 1695824425 3y agoThe claim of this article that real college prices are not increasing is at odds with the well-known fact that student loan debt at graduation has been rising steadily, especially relative to income: https://educationdata.org/average-student-loan-debt-by-year https://educationdata.org/average-student-loan-debt-by-year There has certainly been more sticker price growth than real price growth due to scholarships/aid but this article is the first I've read to assert that the real price growth isn't there. And I definitely know many people who paid the full sticker price at elite schools (they were lucky to have families who can afford it, so not too much pity necessary). Here's an older but very good article around why colleges raise prices to levels they know they'll need to subsidize: https://www.conradbastable.com/essays/the-uncharity-of-college-the-big-business-nobody-understands https://www.conradbastable.com/essays/the-uncharity-of-colle...
- tptacek 3y agoI agree, both sets of claims are hard to square with each other.
- ladams 3y agoThe rise in student loan debt can alternatively be explained by increasing concentration of wealth in the hands of a few people. In the past (e.g. 40 years ago corresponding to a graduation date ~20 years ago), more families were able to save enough to cover the true cost of 4 years of college. Now many families are living paycheck to paycheck, and cannot create an emergency fund, much less a college fund.
- cpitman 3y ago
- dboreham 3y ago"A seemingly endless cycle of price growth" Aka inflation.
- smugma 3y agoseemingly is the key word here.
- js8 3y agoIn other words, it's a market failure. Demand existed but the supply did not match it. According to neoclassical (and most other) economic theory, that shouldn't happen.
- WalterBright 3y agoYou can't blame the market when it's government interference in the market (by providing limitless loans).
- js8 3y agoNo, of course you can. Markets are supposed to adapt to changes in demand (and increase supply if physically possible), regardless of the source or reason for the demand. Otherwise, you're then admitting that markets are extremely brittle. Let's consider another example. Consider that security situation of your country worsens and the government suddenly needs more grenades. So they start to buy them at expense of something else, like school lunches. Are you claiming that the market supply won't try to match the demand? If it's true, then screw the free market. It's a bad economic system, if it can't do this. The problem is markets are treated as an article of faith rather than tools, so people don't want to admit their shortcomings.
- WalterBright 3y agoYou're saying the market is a zero sum proposition. It is not, not at all. It is infinite. The free market is not an article of faith, it has been tested and proved worthy countless times. > don't want to admit their shortcomings I do admit the shortcomings of the free market.
- js8 3y ago> You're saying the market is a zero sum proposition. No, I don't need to assume that. Although of course short-term, production is a zero sum proposition. > I do admit the shortcomings of the free market. Maybe, but you don't admit it in this case (to provide access to university education), otherwise you wouldn't try to blame the government. What should have government done, if it wanted to allow people get more education, and avoid the market failure?
- lotsofpulp 3y ago> In both cases the government provided massive subsidies in the form of loans and tax breaks. These subsidies were for sellers of college, not for the buyers of college. In fact, it was the students subsidizing the school and beneficiaries of the school such as the staff and school’s vendors, via the students’ future income, underwritten by US taxpayers.
- vharuck 3y agoBut then why didn't we see this when the USA passed the G.I. Bill? It paid for millions of Americans to attend college, and the government picked up a large portion of the tab. The original G.I. Bill, like its reincarnations over time, is not included when determining if a school receives too much of its funding from them government (90/10 rule). I'm not asking rhetorically, by the way. I really don't know why "regular" colleges (besides the ones specifically targeting veterans) didn't drastically raise prices to soak up the G.I. Bill money.
- tzs 3y agoI have my doubts about that common explanation. A few years ago I tried to find historical tuition data but only found it online for a couple schools, Stanford and some state school that I don't remember. For Stanford what I found is that a plot of log(tuition) vs time [1] for the last 100 years is almost linear. I think I got similar results for the state school. [1] https://imgur.com/fXnjDNn https://imgur.com/fXnjDNn