Let The Free Market Solve The Crisis Of Higher Education

Let The Free Market Solve The Crisis Of Higher Education

by | May 19, 2019 | Blog

1965 was a portentous year in American history, with a long-lasting impact on numerous aspects of American life decades down the road. For example, it was the year that President Lyndon B. Johnson committed the United States to a ground war in Southeast Asia with the unfortunate result of radicalizing an entire generation of young Americans and provoking riots and civil disorder throughout our nation.

Johnson, who had ascended to the presidency after the tragic assassination of President John F. Kennedy in Dallas in November 1963, had just vanquished Arizona Sen. Barry Goldwater in the 1964 presidential election, sweeping in commanding Democrat majorities in both Houses of Congress. LBJ believed he had the electoral mandate to enact his cherished “Great Society” vision of a paternalistic Federal government at home while waging war on Communists thousands of miles away.

It was an ambitious agenda.

Yet, the consequences of much of LBJ’s domestic policy agenda legislated in 1965 are concluding in the near-collapse of many of our most important public and private institutions in America today.

Health care, for example. In that year, the federal government injected itself into the lives of physicians and patients on a level never before imagined. Medicare and Medicaid were born, promising health care coverage to the aged and poor. While no one doubts the sincerity of the authors of these game-changing laws, there is a good reason why the American Medical Association ( AMA ) fought so hard against their passage. No, it wasn’t because doctors were greedy ( the truth is Medicare reimbursements to doctors are about the same as they were twenty years ago ). It was because the AMA was prescient enough to see the effect on costs and demand that would result from the federal government pouring billions of new dollars into the health care system as well as the inevitable diminishment of the doctor-patient relationship.

The fact is indisputable that the enormous rise in the cost of health care in the United States can be largely traced to 1965 when LBJ and the federal government jumped in in a big Texan way. Simple charts prove this and Medicare is now within six or seven years of complete insolvency as it did what most Big Government programs do: overpromise and underdeliver.

Education is the other victim of the 1965 “Great Society” fantasy. Prior to that year, schools were primarily a local responsibility, controlled by local school boards and answerable to local voters. Funded mostly by property taxes, America’s public schools largely adhered to traditional models of teaching and discipline and were — if not the envy of the world– certainly respected. As liberals can seldom let a good thing stand, LBJ launched a massive federal intervention into our nation’s schools through the Elementary and Secondary Education Act of 1965 and the Higher Education Act of 1965. Both bills promised massive new federal resources to assist schools, teachers, and students.

As in health care, the results were predictable but even more negative. Despite Medicare and Medicaid, the quality of medical care in America remains high even if the delivery system is faulty. In education, however, the arrival of federal aid led to a quick collapse in standards, curriculum, and test results. Despite huge infusions of federal dollars, our nation’s public schools became infested with crime, drugs, poor teachers, lax disciplinary standards, and embarrassing test scores. Students graduate from high school unable to read and write basic English. Entering college freshmen would flunk a grammar school history and geography test from a century earlier. Many can’t name the three branches of our government or identify a fraction of the fifty states. Many are placed into remedial classes when they go to a university.

The situation in higher education has drawn much of the most contemporary political attention, with vote-buying politicians falling all over each other to promise “free” college tuition at public colleges and universities. Alexandria Ocasio-Big Mouth has supposedly even promised to make the Electoral College tuition-free!

Yes, it is true that the cost of higher education has soared over the last several decades and millions of students graduate carrying tens of thousands of dollars of college debt and can’t find jobs for their degrees in Renaissance Theology or Hegelian Philosophy. However, is the answer really having a federal government that is already adding a trillion dollars to the national debt every year offer anything more that is “free?” For if government ever offers you anything “free,” be prepared to hold on to your wallet.

The cost of higher education in the U.S. has climbed more than 538% since 1985, twice as high as medical costs and almost five times more than the Consumer Price Index. This increase correlates to two factors: 1. The increased availability of student loans and other assistance offered by the federal government, and 2. the increased demand for a college education caused by the ready availability of such financial aid. Let’s remember the truism that if you subsidize something, you will get more of it. By massively subsidizing the cost of higher education, we have greatly increased the number of students and greatly increased tuition and fees because when more money is sloshing around, prices go up. That’s called inflation. Colleges and universities have gone on extravagant building sprees, massively expanded bureaucracies, and have handed administrators salaries that even touch seven figures! Yes, parents, that’s where your tuition payments are going.

About the time LBJ launched his Big Government programs, the idea was hatched that everyone deserved a university education. It’s similar to the Clinton and Bush Administration’s belief that everyone should own a home which led directly to the subprime mortgage crisis and the economic collapse of 2008.

The reality is that not everyone does deserve or need a four-year university degree. Not everyone is destined to be an anthropologist or a sociology professor. As a nation, we need skilled mechanics, truck drivers, plumbers, painters, welders, and electricians. Many of these good-paying jobs go begging because too many young people are chasing degrees that have no relevance in today’s job market. We do a grave disservice to millions of young Americans by persuading them that they should embark on careers in obscure professions instead of learning a trade hands-on as we used to do with apprenticeships. There remains more of a need for trade schools and vocational education than ever before.

If we are to fix the crisis in higher education today, we need to determine as a nation the inherent value of a four-year degree compared to one from a two- year community college or trade school. Where are the jobs of the future and what skills are needed to fill them? Are some degrees worth incurring a debt bill of $100,000 or more? We need to stop having government use its taxing and spending powers to engage in central planning of our lives, whether it’s the kind of health care that’s right for you or the type of education your son or daughter should receive. The free market has historically been the best vehicle for allocating talent and resources that man has ever devised. Let’s give it a chance again!

Dr. James Veltmeyer is a prominent La Jolla physician voted “Top Doctor” in San Diego County in 2012, 2014, 2016 and 2017. Dr. Veltmeyer can be reached at dr.jamesveltmeyer@yahoo.com




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I am a family physician and past Congressional candidate in San Diego, CA. I am on a mission to find smart, common sense solutions to many of our most challenging problems as a society.

I am a proud legal immigrant to the United States, arriving here when I was just eleven years old.

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