The common assumption among policymakers is that, in order to maintain its higher living standards against emerging markets competition, the United States must invest more in higher education. To achieve this, the government has instituted a massive student loan guarantee program, with over $1 trillion outstanding and an average of $25,000 in debt for every graduating student with debt. Yet millions of students continue to graduate with degrees that have no obvious real-world benefits. There’s a disconnect here, and it is beginning to appear that the current U.S. obsession with higher education is misguided.
The traditional idea of higher education was to train the literate for the Church, whether Catholic, Episcopalian or other Protestant. However a hundred years ago, for the elite on both sides of the Atlantic, a very different approach had been devised. This was best illustrated in Evelyn Waugh’s immortal “Brideshead Revisited” in which the protagonist Lord Sebastian Flyte wanders round Oxford with a teddy bear, drinking champagne, eating quail’s eggs and occasionally throwing up onto other students’ carpets. Americans will scoff at this depiction, but really the Harvard of Theodore Roosevelt was not very different, except in that it involved the occasional life-threatening game of football.
Flyte’s Oxford was not intended to train him for real life, it was intended as a highly enjoyable 3- or 4- year holiday before real life intruded. For the middle classes whose fathers were not Marquesses – a majority at Oxford even in Flyte’s time; there are only 34 Marquesses – the system applied a gloss of social polish and connections that was useful in later life, but did not impart more than a modicum of knowledge. Certainly the education provided was not expected to involve a huge amount of work, or to be useful in a subsequent career.
This changed after 1945 in the United States and from around 1960 in Britain, as a higher percentage of the population experienced a college education (in the United States often financed by the post-World War II “G.I. Bill” and in Britain essentially free, with only a modest means-tested contribution, under the 1944 Education Act). The increased access of the masses to college education produced a greater competitiveness at the top colleges, so that when I went to Cambridge in 1968-71 access was more competitive and more work was expected from students than had been the case thirty years earlier.
Even then however access to top colleges was less competitive than it is today. While I was expected to have a reasonable mastery of Latin in the entrance examination there were no probing “essays” in the application, and my interview at TrinityCollege consisted of a most enjoyable discussion about the career of the cricketer Jack Hobbs. (I aced it by remembering that he amassed 197 first-class centuries not 198, with the two scored on the unofficial India tour of 1925-26 not counting. Presumably as I was to study Mathematics such statistical precision was thought valuable!)
Currently, not only are almost all students expected to get a college degree, but those of superior abilities are expected to carry on for a Masters’ degree, a PhD, or two Masters’ degrees, with the second being in business, law or journalism, according to the student’s future activity. The excessive credentialism of the U.S. system was exemplified at a medical conference I attended recently, where the attendees were surprised how many Chinese doctors were prepared to engage in primary medicine, but then explained patronizingly that many Chinese doctors had only an undergraduate degree. It occurred to me at that point that U.S. medical costs could be sharply reduced and quality improved if primary physicians, the principal point of contact with most patients, could be qualified in four years instead of ten.
Similarly from the 1890s, the American Bar Association began to press states to require that lawyers attend not only an undergraduate program but a three-year law school in order to pass the state bar exam; currently all states but California, Vermont, Virginia and Washington require this. As with doctors, the cost of legal services could be drastically reduced by eliminating this requirement of no less than seven years of college study to enter what is in most cases a fairly intellectually undemanding profession.
The rising tide of credentialism may however have peaked for two reasons: the excessive cost of college education and its diminishing quality. First, there is considerable evidence that finance availability is pushing up college costs. As college funding has become more readily available, it has reduced the financial pressure on colleges, since few of their students are today paying their way from part-time jobs and parent cash flow. Huge endowments in the Ivy League, which allow those elite colleges to provide full scholarships for students, focus the competition between colleges ever more closely on league table “prestige” rather than costs.
Within the colleges themselves the ranks of college administrators have exploded (as is also the case in the medical profession, equally insulated from market forces). So have their earnings – according to the New York Times, in the decade between the 1999-2000 and 2009-10 college years, the average college president’s pay at the 50 wealthiest universities increased by 75%, to $876,792, while their average professorial pay increased by only 14%, to $179,970. (Average college tuition costs increased by 65% and consumer prices by 31% during that decade.) That’s precisely the opposite of what you’d want to happen if you were concerned about college productivity and cost.
For the very brightest students, or those from really good schools, the appeal of the Ivy League may remain overwhelming. The knowledge that only four years’ moderate attention to politically correct drivel will get you a piece of paper that more or less guarantees you a six-figure salary thereafter is for most rational kids a very good reason to attend an Ivy League college and major in one of the softer arts or social sciences subjects.
For those of a mathematical, scientific or technological bent, however, the Ivy League is much less attractive; you will have to work much harder, and when you graduate you will be subjected to competition from innumerable Third World students on H1B visas, making the average salary for even Ivy League science graduates far below those available in law or medicine. What’s more, most undergraduate courses in science are now so far from the technological cutting edge that the student will have to waste several more years in a Masters program before arriving at a point where he is actually useful to potential employers.
For these science-oriented students, or for others of high intelligence with an independent bent, the Internet has opened a new opportunity. Many college courses are now available online, either for free or for a small fraction of the $5,000 they would cost as part of private college major. For example, I recently came across the 24 video lectures comprising the Yale course on Game Theory, a relatively new area of economics I wish I understood properly.
For students with initiative this brings the possibility of obtaining a college education through internet courses, perhaps at a higher level than that of second-tier colleges and certainly at a far lower cost. This would enable them to avoid the rigidity of many college degree programs, which include requirements for all kinds of irrelevant basic level courses taught by teaching assistants in classes of 300. Students who don’t like to waste their time will thus welcome the opportunity to obtain an education consisting only of courses that are directly useful, plus some sidelines that are intellectually fascinating or culturally enriching.
As has been well advertized, the internet billionaire Peter Thiel has been encouraging this trend, providing $100,000 fellowships to students who drop out of college and start a small business. That doesn’t necessarily provide the students concerned with an education, and it raises the question of what they will do for a living if their start-ups don’t work, as inevitably many won’t if recession intervenes. However the website uncollege.org, run by Thiel Fellow Dale Stephens, provides resources to those wishing to educate themselves, without necessarily becoming tech entrepreneurs. Of course many such educations will be incomplete, leaving the students concerned culturally deprived, but a conventional degree in computer science or sociology isn’t what our parents would have called a proper education, either!
Students who self-educate will find it difficult to get jobs in large companies or the federal government, which will remain wedded to possession of the right pieces of paper. For many students with low self-confidence, this may be a decisive factor; even if they cannot get into Yale, the degree from a second-tier college will give them much greater job security than if they had self-educated. However students with high levels of ability and self-confidence will take their chances; there are enough small companies and entrepreneurial opportunities around that securing a steady desk job with GE or the federal government may not seem all that attractive.
The current credentialism model faces another problem: the credentials go out of date. With longer lifespans and inadequate social security systems, this is an increasingly serious defect. For liberal arts majors, the need to re-train may not be extreme. However for majors in any technical subject, including many of the social sciences and business, educations obtained 30 or even 40 years ago may have become utterly useless. Moreover even large companies have considerably shorter lifespans than in past generations and their demise generates involuntary workforce churn. Thus many will find themselves needing to retrain at the age of 45 or 50 in order to enter a different field, or simply in order to make themselves competitive again in their own field. 4-year degrees or even 2-year Masters programs will be impossibly expensive for such people, who generally will have families and mortgages to support. Again, the availability of self-education over the Internet will offer them new possibilities, far more convenient than overpriced executive education programs.
From the above, the market share of conventional four year colleges is likely to go into sharp decline in the years ahead. Provided policymakers have the sense to stop subsidizing student loans with state guarantees and special provisions to survive bankruptcy, the banks will become much less willing to encourage the young and feckless to over-extend themselves in this way. Students will once again exert pressure on colleges to reduce their fees, and will choose cheaper state schools and programs that allow them to work their way through college.
The principal losers from this change will be academic administrators. Colleges that employ a full staff of diversity officers and pay their presidents $1 million will find the free market blowing a very cold wind indeed. Meanwhile students’ educational experiences beyond high school will become far more diverse, and in some cases very much better suited to the lives they choose to lead. The for-profit education sector, currently rightly despised as low-quality, will extend itself to offer higher-quality packages at costs far below those of conventional non-profit colleges.
It can’t happen too soon. Like any other overstuffed, over-subsidized bureaucracy, America’s colleges have got it coming!
(Originally appeared in The Bear's Lair.)
Martin Hutchinson is the author of "Great Conservatives" (Academica Press, 2005)—details can be found on the Web site —and co-author with Professor Kevin Dowd of “Alchemists of Loss” (Wiley – 2010). Both now available on Amazon.com, “Great Conservatives” only in a Kindle edition, “Alchemists of Loss” in both Kindle and print editions.
At a March 30, 2007, campaign fundraiser, then-candidate Barack Obama stated “I was a constitutional law professor, which means unlike the current president, I actually respect the Constitution.”Like much of what President Obama has told the American people, that statement has turned out to be false, as illustrated by the controversy last week over the president’s April 2 comments about the U.S. Supreme Court and their forthcoming decision about the constitutionality of the Affordable Care Act (also known as “Obamacare”).Vigorously (or desperately?) defending the crown jewel in his domestic agenda, President Obama said “I’m confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress.And I’d just remind conservative commentators that for years what we’ve heard is, the biggest problem on the bench was judicial activism or a lack of judicial restraint.”
Seriously, Mr. President?The Supreme Court (or, as he’s referred to them, “an unelected group of people”) doesn’t have the authority to strike down acts of Congress that violate the Constitution?For a supposed former “constitutional law professor,” these statements betray a shocking level of ignorance about the concept of judicial review and the 1803 case, Marbury v. Madison, that enshrined it in American jurisprudence.Marbury made it the hallmark of the judicial branch of government that it has the power to invalidate laws passed by the legislative branch that are unconstitutional, since the U.S. Constitution is supreme and “all laws repugnant to the Constitution are null and void.”This is precisely why federal judges are given lifetime appointments that make them—in theory—immune to political and popular pressure, and thus able to steadfastly apply the Constitution and the law.
President Obama should know this, but after his recent comments, I’m inclined to seek proof that he actually graduated from Harvard Law School, much less served as a “constitutional law professor.”You see, it’s not just that a law professor should know this; every lawyer knows it, and every law student reads the Marbury case early on.In fact, a number of landmark Supreme Court decisions are mandatory for Texas 6th–8th graders to know; Marbury is one of them.The State Bar of Texas, under an initiative from President Bob Black, has even produced a short documentary and other materials about Marbury v. Madison and its significance for educators in Texas to use as part of their social studies curriculum.In other words, to satisfy the TEKS (Texas Essential Knowledge & Skills) standards, Texas eighth graders have to know more than the president knows about Marbury and judicial review.
The president’s comments had a ripple effect.During oral argument last week before the U.S. Court of Appeals for the Fifth Circuit in a separate challenge to Obamacare (Physician Hospitals of America v. Sebelius), senior Judge Jerry Smith asked the Department of Justice lawyer arguing the case, Dana Kaersvang, if the president’s statement reflects the official position of the U.S. government.While Kaersvang agreed that the judiciary could strike down an unconstitutional law, Judge Smith wanted it in writing.He ordered the DOJ to file a 3 page, single-spaced letter by April 5 giving the federal government’s position on the court’s authority of judicial review.And as requested, Attorney General Eric Holder filed the letter.It stated in part that “The longstanding, historical position of the United States regarding judicial review of the constitutionality of federal legislation has not changed and was accurately stated by counsel for the government at oral argument in this case a few days ago.”
The reaction by members of the liberal media, to both the furor over President Obama’s comments as well as the Fifth Circuit’s order prompted by them, was predictably slanted and even hypocritical.Harvard Law School professor, constitutional law scholar, and Obama mentor Laurence Tribe penned a scathing editorial for CNN.com entitled “The 5th Circuit Court’s Insult to Obama,” in which he claimed that the president “has nothing but respect for judicial authority” and called Judge Jerry Smith’s order “a shocking departure from the norms of judicial behavior.”CNN legal analyst and writer Jeffrey Toobin declared the order to be a “judicial hissy fit,” “a disgrace,” and “an embarrassment to the federal judiciary.”And David Dow of Newsweek wrote an article calling for the impeachment of those Supreme Court justices who might overturn the Affordable Care Act.
Yet even Laurence Tribe admitted that President Obama “obviously misspoke” in his comments about the Supreme Court, and Jeffrey Toobin is so lacking in actual practice experience that he doesn’t realize that a federal court is well within its right to require a party to give its understanding of the court’s jurisdiction.Perhaps Toobin doesn’t appreciate that courts exist to protect our rights when politicians trample on them—including a president claiming powers forbidden to him by the Constitution.And as for David Dow, he couldn’t even get his facts straight.He gave the example of Thomas Jefferson’s efforts to impeach Supreme Court Justice “Salmon Chase” in 1805; Samuel Chase was actually the justice who was impeached, while Salmon Chase was a member of Abraham Lincoln’s cabinet who was appointed to the Supreme Court in 1864.And apparently, Dow believes that judicial activism is okay as long as it’s in line with his liberal ideology.He wrote a book entitled America’s Prophets: How Judicial Activism Made America Great.
For me, the most concerning aspect isn’t the reaction by left-thinking critics.It’s the ignorance or the willingness to lie—take your pick—displayed by President Obama.First, let’s settle this whole “I was a constitutional law professor” debate.Barack Obama was never a professor at the University of Chicago School of Law.From 1992 to 1996, he was a “lecturer,” and 1996 to 2004 a “senior lecturer;” he was never even an adjunct professor.He never taught a constitutional law course—instead, he taught an election law course, a seminar on “race theory,” and a course dealing with equal protection rights, in which Marbury v. Madison likely never came up.Next, President Obama referred to the health care law as having been passed by “a strong majority of a democratically elected Congress.”Despite a huge Democratic majority at the time, Obamacare barely passed by a 219–212 margin.That’s not only not a strong majority, it’s barely a plurality.And then there’s Obama’s confusion over judicial activism.Judicial activism isn’t when judges strike down an existing law.It’s when judges permit their personal views, and not the Constitution, to guide their decisions or invent new “rights” where none previously existed.Obama can’t have it both ways.His own Justice Department is arguing that courts should strike down voter ID laws as unconstitutional, and he’d be the first to invoke the power of judicial review if a state were to ban abortions.Arguing here that a Court that would dare invalidate his precious Affordable Care Act must be the “unprecedented” work of “activist” judges is absurd and represents a direct attack on the independence of the judiciary.And Obama’s claim that the Supreme Court hasn’t invalidated any statutes that are “economic” and relate to “commerce” since the New Deal era is incorrect.The list is too long to give here, but let’s just say that some recent examples of laws relating to “commerce” that have been struck down include parts of the Sarbanes-Oxley Act; the Trademark Remedy Clarification Act; the 1998 Harbor Maintenance Tax Act; the Transfer Act (which authorized transferring operating control of certain airports away from the Department of Transportation); and many, many others.
Presidents like Andrew Jackson and FDR publicly clashed with the Supreme Court, but only President Obama has chosen to level his attacks before the Court has even ruled.Whether you call it heavy-handed bullying in an attempt to influence the judiciary or a shocking ignorance about the fundamental concept of judicial review, it’s equally disturbing.For a former “constitutional law professor” to make such statements is like hearing a science professor argue that the world is flat or that the sun revolves around the earth.
President Obama’s comments on the shooting of a black teenager, Trayvon Martin: “But my main message is to the parents of Trayvon Martin. If I had a son, he’d look like Trayvon. And I think they are right to expect that all of us as Americans are going to take this with the seriousness it deserves, and that we’re going to get to the bottom of exactly what happened.” Folks, that is a bald face lie! Trayvon’s parents are both black, whereas President Obama has a white mother and black father! So how could President Obama have the audacity to utter those race-baiting comments?
For your information, Jorge (George) Zimmerman is half white and half Hispanic as are my grandsons who are also half white and half Hispanic. However, the liberal mainstream media has tried hard not to reveal that. Blacks, particularly Rev. (?) Jessie Jackson and Rev. (?) Al Sharpton have focused more on Mr. Zimmerman’s whiteness to stoke the fires of racism. Without black and white incidents like this, these two race-baiting opportunists would have to go find a real job.
In all my life I have never seen a man like Mr. Zimmerman pre tried and lied about by the news media and sentence to death as per the Black Panthers who are offering a $10,000 reward for his life without letting the rule of law follow its course and find out if indeed Mr. Zimmerman is guilty of 1st degree murder. Folks, if Mr. Zimmerman is guilty of murdering Trayvon, I will be demanding he’d get the death sentence. To me it doesn’t matter if he is brown, white, yellow or black!
What I find so hypocritical of race baiting blacks is that the U.S. Justice Department recently provided a breakdown of homicides by the race of both the victim and the offender. Looking at the data since 2005, it was found that whites committed 48% of all murders and blacks committed 51.2% of all murders. However, whites outnumber blacks in the population by a large number. In fact, non-Hispanic whites are about 69% of the population and blacks are about 13%. These statistics along, shows that blacks are 13% of the population, but commit 51.2% of the murders, indicate that blacks commit a seriously disproportionate number of murders among their own kind. I now ask, “Where is the outrage of supposed black leaders like Jackson and Sharpton and the Black Panthers?” What that tells me is that blacks don’t give a rats read end if they kill each other, just don’t let a white or half white Latino person do it!
Recently, I saw a hideous crime story on ID TV. The murder victim, Cherica Adams, was a beautiful young black 21-year-old lady. Cherica’s big mistake was falling in love with Rae Carruth, a black NFL Carolina Panthers football player. In time, Cherica got pregnant much to the displeasure of Carruth, who was already paying child support to a girl in California. Facing the possibility of having to pay child support to Cherica who was 6-1/2 months pregnant, Carruth cooked up an evil murder plot with two black hoodlums, Mike Kennedy and Van Brett Watkins. His evil plot was to invite Cherica to dinner with each driving to the restaurant in their car. After dining, Carruth enticed Cherica to follow him to her apartment. As Carruth drove to Cherica’s apartment he phone Kennedy and Watkins and told them what road he was on. In a lonely spot on the road, Carruth stopped his car as Kennedy drove his car next to Cherica’s car where Watkins then shot her four times in the head and neck. Carruth then sped away leaving Cherica mortally wounded in her car. Barely able to use her cell phone Cherica dialed 911 asking for help while bleeding profusely from her wounds. At the hospital Cherica’s baby was delivered but due to her losing so much blood doctors feared he would have severe brain damage, which he has to this very day. Cherica, unable to talk, wrote of her horrible account and after her death, Carruth along with the shooter Watkins and the driver Kennedy all faced murder charges. Sadly, Carruth was only sentenced to 18-24 years for conspiracy, shooting into an occupied vehicle and using an instrument to destroy an unborn child. The driver, Mike Kennedy got 11 years and the shooter Van Brett Watkins got 40 years to life. At his sentencing, Carruth showed no emotion for his actions. Folks, how many of you heard of this horrible event, and where was the outrage of Black Americans on this hideous murder plot? Oh, I forgot, it was a black killing another black.
By now some of your are asking, “James, you sure are coming down on blacks.” No sir, just recently I applauded a death sentence handed to Mark Soliz a Hispanic here in Fort Worth. This beast robbed and killed a young Hispanic deliveryman, Ruben Martinez, leaving a pregnant wife with a 6-year-old son. After killing Mr. Martinez, Soliz tried to rob and shoot another man no more than 3 blocks from my house at Lowe’s. Luckily, the intended victim got away. Later, Soliz along with an accomplice, Jose “Joe” Ramos, drove to Johnson Country looking for a home to rob. There they entered the home of Mrs. Nancy Weatherly, a 61-year-old grandmother. After robbing Mrs. Weatherly, Soliz admitted shooting her as she knelt pleading for her life.
As predictable, during the trial, Soliz’s defense team presented evidence from Soliz’s friends and mother how he was abused and uncared for by his drug addicted and alcoholic mother. However, what made me so angry at this piece of human trash was when Soliz’s girl friend testified that he told her that Mrs. Weatherly prayed and begged for her life but that he shot her anyway. He then laughed about it she said.
Folks, I attended a fundraiser for Ruben Martinez shortly after his death at Billy Bob’s to help his widowed pregnant wife and child sponsored by his company. I expected to see many Hispanics at the event, but to my surprise all I saw in great numbers were those evil and racist white people!
The U.S. Department of Defense budget was $680 billion in the year to September 2012. The Environmental Protection Agency’s budget was only $17 billion. Yet when you compare the cost to the U.S. and global economy of the two departments, the comparison reverses. With modern rules of engagement and care for civilian populations, and politicians’ reluctance to use wholehearted military force, the non-taxpayer economic costs of the Defense Department (mostly imposed on countries with limited material possessions) are no more than $10-20 billion at most. Conversely, the EPA’s economic depredations, imposed mostly on the U.S. economy, run annually easily into the trillions.
Consider first the EPA order released last week, which effectively banned coal fired power plants because of their carbon emissions. It set a limit of 1,000 pounds of carbon dioxide emission per megawatt hour, a limit that is met by gas fired power stations, which at their most efficient emit around 800 pounds per megawatt-hour, but cannot be met by new coal-fired stations, which emit 1600-1900 pounds of carbon dioxide per megawatt-hour. By this ruling, therefore, expansion of the power source that provides around 40% of U.S. electricity has been cut off.
Even if the hotly disputed theory of global warming is accepted (the planet has not warmed at all for more than a decade) there is a much cheaper way to cut down carbon emissions, though a carbon tax. With such a mechanism, coal-fired power stations can bear what society believes (rightly or wrongly) to be the cost of their greater carbon dioxide emissions, and if coal-fired power stations still prove potentially profitable, they will be built. The tax receipts will make at least a modest dent in the federal budget deficit.
In today’s market, the EPA’s effective coal ban does not matter much. The improvement in techniques of horizontal fracturing of oil and gas shale deposits has vastly increased potential natural gas supplies, and caused the gas price to decline sharply even as oil and commodity prices have been inexorably rising. However in the long run this ruling, by closing off an important power source alternative, is likely to condemn American power consumers to periodic brownouts and escalation of prices.
Already in 2011 the cost of electricity has soared to 11.8 cents per kilowatt-hour for domestic use, compared to 9.45 cents in 2005, a 64% faster rate of increase than prices generally at a time when electricity usage has barely grown. Yes oil prices rose faster during this period, but very little of the United States’ power generation capacity relies on oil. Thus even before the new rules come into effect, the excess increase in electricity prices over prices generally can mostly be put down to increasingly stringent EPA regulations. Since U.S. annual electricity usage is $380 billion, you can charge the EPA with $39.1 billion annually from power generation regulations alone, before adding in the much larger future cost of banning coal-fired stations.
President Richard Nixon is a much maligned and to some extent underrated President. Certainly the attempted Bill Clinton impeachment in 1998 has reinforced the view of the fair-minded, that neither the Watergate burglary/wiretapping nor the Monica Lewinsky affair constituted adequate grounds for impeachment. However his creation of the EPA, proposing legislation to Congress in July 1970, and signing the final bill in December of that year, should have given his detractors a much more solid case for drastic action.
The EPA is a classic creation of the first phase of environmentalism, in which preventing Cleveland’s Cuyahoga River from catching fire (as it did in 1969) was a moral crusade and costs were considered irrelevant. It operates through a “command and control” mechanism similar to that of the old Soviet economy, in which decrees are issued and the market forced to adapt to them, rather than through any serious attempt to calculate the true externalities of an environmental problem and use the price mechanism to reduce them.
A classic example of EPA rule is the Corporate Average Fuel Economy (CAFE) standards, first imposed by Congress in 1975 and intended to regulate the mean fuel economy of each auto manufacturer’s fleet. Operated jointly by the EPA and the National Highway Traffic Safety Administration (two bodies whose interests in this area are structurally in conflict) they have been responsible for a series of perverse and expensive changes to the U.S. automobile market.
A 2002 National Academy of Sciences study of the CAFE standards estimated that without them, fuel consumption would have been about 14% higher in 2002, but that the cost of this reduction was an annual 1,300 to 2,600 fatalities. In terms of the automobile industry’s structure, the CAFE standards pushed automobile buyers artificially towards the small cars made by Japanese and other Asian manufacturers, who consequently gained market share at the expense of GM, Ford and Chrysler. The CAFE standards thus bear much of the responsibility for the 2009 bankruptcies of the latter two companies. In addition, in order to survive Detroit found a loophole in the regulations, by which “sports utility vehicles” and minivans built on a truck chassis, were subject to less demanding fuel economy standards – the CAFE standards are thus responsible for the decline of the saloon car.
The cost of CAFE standards is now being immeasurably increased by two successive regulations tightening them, the first signed by President Bush in 2007 and the second by President Obama in 2011. In their latest form, CAFE standards mandate fuel economy of 54.5 miles per gallon by the 2025 model year, introduced in late 2024. The automobile industry agreed to these, not surprisingly since two of the three U.S. manufacturers were controlled by the government, while the foreign manufacturers no doubt reflected that Obama would be out of office well before 2024, and that if Obama-esque economic and environmental policies were pursued by his successors, then 2025’s U.S. automobile market wouldn’t be worth a damn anyway.
The 2025 standards cannot be met by hybrid cars like the Toyota Prius; they will require an admixture of fully electric vehicles like the Chevy Volt. Given the cost and spectacular lack of market penetration of that expensive toy, the CAFE standards may by 2025 require the unfortunate U.S. public to buy cars costing $50,000 in today’s money. As well as expensive automobiles, the new standards will also further increase traffic fatalities, as commuters buzz around the highways in 70mph golf carts.
Without the EPA, the environmental gains of the CAFE standards could easily have been achieved by an increase in the price of gasoline, through a tax that would have produced money for the federal exchequer rather than costing it money. Assuming even a very low 20% price elasticity of gasoline consumption, the 14% decline produced by the 1986 CAFE standards would have required a 70% increase in 2002’s price of gasoline – to $2.30 a gallon from the $1.35 at which it actually stood in that year. Much of that saving would have come from lower mileage driven by motorists, as they adapted their lifestyles to higher gas prices. In this respect, Europe has been far more market-oriented than the United States; with gas prices at $8 per gallon cars and lifestyles have already adapted to a lower fuel-consumption world, without the costs in either individual liberty or economic disruption of the U.S. command-and-control approach.
At the opposite end of the spectrum, the EPA intrudes aggressively into almost all business decisions, even at the individual level. This was demonstrated last week by a unanimous Supreme Court decision in Sackett v. EPA, in which the Court declared “There is no reason to think the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for judicial review.” The Sackett family had attempted to build a house on a plot of land which the EPA post-facto declared to be “wetland” – a catch-all term used to justify endless EPA meddling – and the EPA had denied them a hearing and ordered them to pull down their property or face fines of $75,000 a day.
The total cost of EPA depredations can only be estimated, but there is one very significant measure of the EPA’s potential damage to the U.S. economy. U.S. productivity growth averaged 2.8% annually in the quarter century before 1973, the economic cycle peak immediately after the EPA’s formation. In 1973-2011 U.S. productivity growth averaged 1.8%. Had productivity continued at the pre-1973 pace, the U.S. economy would today be 45% larger, a matter of some $7 trillion in annual GDP. With pre-1973 productivity growth continuing to today, the impoverishment of the U.S. middle class would never have occurred, as median incomes today would be 45% higher.
Sure, the EPA probably is only partially responsible for that productivity slowdown. However economists have puzzled since 1980 or so for an explanation of the slowdown, and so far have failed to come up with a cause of sufficient importance. Given the EPA’s universality and Soviet approach to regulation, the impartial observer must conclude that a substantial part of the slowdown must have been caused by the EPA’s diversion of the U.S. economy from free-market patterns. If even a third of the slowdown was caused by the EPA and its tenticular, market-defying web of regulations, that’s $2.3 billion in lost annual output for which the EPA must be held responsible.
As I said, the EPA is far more expensive than the Defense Department. And it’s about time that the squeezed U.S. middle class knew where the blame for their impoverishment truly lies.
(Originally appeared in The Bear's Lair.)
Martin Hutchinson is the author of "Great Conservatives" (Academica Press, 2005)—details can be found on the Web site —and co-author with Professor Kevin Dowd of “Alchemists of Loss” (Wiley – 2010). Both now available on Amazon.com, “Great Conservatives” only in a Kindle edition, “Alchemists of Loss” in both Kindle and print editions.
After 10 years as an Army infantryman, Sgt. Anthony Weir had a difficult time finding a good job as he transitioned from service in Iraq to civilian life.
Although he remained in the National Guard, Anthony worked as a jail guard, security guard, carpet cleaner, and most recently a pizza delivery driver to support his wife and four children.
As reported by the Amarillo Globe-News, Anthony’s job as a pizza delivery driver landed him on the wrong side of a gun, when a teenage customer held a semiautomatic pistol to his stomach. Fortunately, the Army veteran of Iraq made his way out of that situation safely – but not without further discouragement regarding his civilian career prospects.
Little did he know at the time the Globe-News article appeared that his luck was about to change.
Roger Williams, the CEO of Bell Helicopter (Bell) in Amarillo, shared the article about the Army veteran’s plight with Norm Bearden who heads up our Texas Veterans Leadership Program (TVLP) in Amarillo. The TVLP is run by returning veterans and is designed to help those who served in Iraq and/or Afghanistan make a successful transition to civilian life, with particular emphasis on getting good jobs upon their return home. Norm and Roger already had been working together as Bell had hired a number of returning veterans. To Roger’s credit, he wanted to give Anthony an opportunity to come and work for Bell Helicopter. Norm already had Anthony’s information in the TVLP database, as he had been trying to help the soldier. It was an instant match.
Anthony is now working part-time for Bell and taking classes at Amarillo College to get the skills training that Bell requires.
“This couldn’t have happened to a better guy,” Norm said. “This is the kind of man that, you might think, would only be in here to see me. But he brought in other guys from his Guard unit to see how they also could be helped.”
TVLP was modeled after a similar program I started in my days with the Reagan Administration, called the Vietnam Veterans Leadership Program, which helped our returning veterans from Vietnam who were unemployed, underemployed, or had lingering problems associated with their Vietnam experience.
Through our TVLP leaders stationed at Texas Workforce Commission facilities across the state, we’ve helped about 8,000 returning veterans start careers and access educational and health benefits.
Like Sgt. Anthony Weir, these young men and women have answered our country's call under very difficult circumstances. They deserve our full support in making a successful transition to the civilian world. Let’s put their experience to work in the state of Texas.
To find out more about the Texas Veterans Leadership Program, visit our website at vets.texasworkforce.org, or call our toll-free number at 888-VET-TEX1.
Tom Pauken is Chairman of the Texas Workforce Commission and author of Bringing America Home.