God Protect us from Idiots: The Orszag edition
I was making a final pass through the day's news when I came across this piece of rank nuttery by Peter Orszag, the Times' newly hired gasbag. Orszag makes the claim that "states tend to rob education [as in state universities] to pay for Medicaid during economic downturns." Inadequate state funding not just of higher education but of education K-12 has been a scandal for decades. Curiously, state budgets contain other items besides just higher education and Medicaid. States, for example, have underfunded their pensions for years. They have let their infrastructure deteriorate.
Yet Orszag keys in on only these two. Why? You think he just might have an agenda he's pushing? And it's not like we haven't seen this kind of skewed thinking before at the federal level, you know where Orszag directed first the CBO then the OMB. It's always entitlements there that are going to bust the budget, not wars, a bloated military, and tax cuts for the wealthy that A) we can't afford and B) they don't need. But it is precisely this kind of debunked, intellectually bankrupt thinking that Orszag brings to state finances.
There is so much wrong with this op-ed. It is the kind of product that if an undergrad turned it in, you would return it bleeding red. For example, Orszag compares professor salaries at a couple of private schools vs a couple of public state schools. Over the years, the salaries at state schools began to lag. Forget that this is not anything like a statistical sample. Orszag doesn't look for deeper causes for why such salary discrepancies came to exist.
In the last 30 years, state budgets have been squeezed by anti-tax forces. This was something that didn't just occur in downturns but all the time. That higher education spending might be constrained on the revenue side doesn't seem to occur to Orszag.
In the same time period, elite private schools saw their endowments balloon (at least until the meltdown but by then their pay scales were already in place). During this time too, the rich were getting a lot richer and could pay the much higher tuitions at the private schools. Does Orszag explore how tuition has increased in state vs private schools? Of course not. Does he look to see if private schools, like Harvard, that got burned in the high heat of their speculative Summers are hiring at the same rates they were in the past?
You must be kidding. Orszag has a point he wants to make and he isn't going to let reality or a mountain of contrary evidence get in his way.
Even though he admits it is a weak authority, Orszag invokes the US News and World Report college rankings. To put it mildly, such rankings are a con. They are a sop to parents to make them feel better (or in some cases worse) about the amount of money they are spending to send their kids to school. But seriously what do they mean in terms of education?
We all know some public and private schools that could qualify for Podunk U, but when you get to the level of flagship state and elite private institutions, they all provide a reasonably good education. Whether they provide as good a value for the cost (and debt) is another matter. You also have to wonder if people are paying the high tuition rates of private schools because they think the education is so much better or whether the connections are. Again Orszag doesn't get into any of this. Like many a freshman confronting the writing of their first research paper, he uses a poor source to make an overly broad point.
So what in the world is Orszag trying to do with all this bunkum? Well, he is trying to make what is on the surface a liberal point. States should recieve more federal aid for Medicaid during downturns. Would states use this money to prop up higher ed? Just something else Orszag doesn't address. But his final kind of iffy contention is that
the temporary Medicaid help provided by Congress and the Obama administration over the past two years may have not only helped avoid cutbacks in Medicaid while bolstering the economy, but also improved your child’s college education
Now as a former CBO and OMB director you think he might actually cough up some numbers here. How much states have been paying for Medicaid, how much they received each of the last two years from the federal government, what increase was involved, etc. Orszag could cite numbers when it came to bogus college rankings, but real budget numbers? Not so much.
Nevertheless, he proclaims that this article will now serve as a basis for future forays into the importance of containing healthcare costs. This from a man who was instrumental in the cutting of $547 billion over 10 years from Medicare and Medicaid (the largest cost reductions in Obama's healthcare sellout, and again this is not Medicare Advantage). I think it is pretty obvious exactly how Orszag wants to "contain" those costs, even if he is wrapping it in this bogus sugar pill of helping higher education.