Monday, April 16, 2012

Tyler Cowen on College Subsidies

David Henderson writes:
Tyler Cowen's latest blog post is rich with assertions. This one stood out:
Postwar higher education has proven one of America's most effective subsidies, and it has paid for itself many times over.
Amazing, Cowen once, I believe, held a  methodological individualist perspective (a view which would make public goods impossible to measure). How did he measure this so-called pay off and whom exactly did it benefit (many times over)?

As Henderson comments:

Consider the phrase "many times over." To have paid for itself, it would have had to generate a present value of returns equal to the present value of costs. "Many" must mean at least three. So that would be a present value of returns equal to at least three times the present value of costs.
Is that plausible? I think not....For Tyler's case to make sense he has to be arguing that there is a huge public good.


  1. For proof of his amazingly ignorant assertion see these stories:


    and these:

    Thanks to the feds with their corrupt bankruptcy laws and guaranteed loans driving up costs of higher education. They care nothing for the victims of their predation. These people's lives have been ruined because of loans they took before they ever worked. NOBODY would ever make a loan to these adolescents if 1. Bankruptcy actually allowed the liquidation of all debt and assets (as it does for corporations)
    2. Government did not give guarantees to the lenders.

    For the record, I have no debts at all. I'm angry about what this debt slavery will do to the millions that suffer from it.

  2. I wonder if Vietnamese cuisine is 15 times more scrumptious than American roasted chicken? Hmm...

  3. Which is why The Carlyle Group and other private equity underwriters target student housing. Carlyle is going whole hog in London, where during the Olympics, my guess is very few "students" will be staying in their high end housing.