Administrative Bloat Study Successfully Replicated

March 26, 2012

Replication is the engine of scientific progress.  That progress feels especially good when it confirms one’s work.

A little more than a year ago I wrote an analysis for the Goldwater Institute along with Brian Kisida and Jonathan Mills on the growth in non-instructional professional staff at major universities — or administrative bloat.  Then last year the State Higher Education Executive Officers (SHEEO) issued what appeared to be a rebuttal analysis in which they claimed that “public colleges and universities are operating more efficiently than before, and with appropriate numbers of staff.”

Recently the Pope Center examined both of these studies and then conducted their own new analysis.  They concluded:

the Pope Center analyzed the two studies and also roughly replicated both of them for the 16 campuses of the University of North Carolina system. While we do not claim to be the definitive voice on the matter, we discovered that one of the two studies—the one that said excessive staffing is a serious problem—seemed to be on the mark. The other contained some truth but also raised a few questions about its objectivity….

Our findings, which focused entirely on the UNC system, corroborated the Goldwater study for the most part. Between 1993 and 2010, total UNC system staffing indeed grew faster than enrollment: 51 percent against 42 percent; the number of total staff members per 100 students grew 5.9 percent….

The failure to mention the more recent upward trend in staffing [in the SHEEO report] was puzzling—certainly anybody who has looked at statistics professionally would be able to pick up the trend reversal and realize its significance. Such an important omission raises the possibility that the SHEEO researchers also “cherry-picked” 2001 as a starting point in order to show an overall decline in staffing, rather than the real long-term trend that staffing is rising. (There are no such concerns about the Goldwater study—the researchers chose 1993 because that was the first year for which this type IPEDS was available.)

Ahh.  Vindication is sweet.


The Miseducation of a University President

November 16, 2011

(Guest post by Jonathan Butcher)

Aesop tells us that every man carries two bags, one in front and one behind, both full of faults. The bag in front contains the faults of others, while we carry ours in the one behind. As a result, we always see someone else’s mistakes and rarely look at our own.

Writing in the Washington Post earlier this month, ASU President Michael Crow chastises universities for not being more innovative during the current financial crisis. “Their lack of creativity in adjusting to the reduction of resources has shocked governors and business leaders alike who want to see universities innovate in order to educate more students better, faster and cheaper,” said Crow.

But ASU hasn’t exactly been a model of efficiency. Across the country, colleges are hiring massive numbers of administrators and ASU is no exception — in fact, the Sun Devils are an example of this “administrative bloat.” Between 1993 and 2007, ASU increased the number of full-time administrators per 100 students more than 167 other comparable universities while the number of instructional staff and researchers actually decreased. Goldwater research finds “[n]early half of all full-time employees at Arizona State University are administrators.”

Considering these hiring practices, Crow’s warning that proposals to turn universities into businesses are “ill-conceived” is remarkable. Also “ill-conceived” are programs that would “send our kids to college in the basement with the local online university.” Yet the University of Phoenix reports that some 75 percent of higher education students today “are older…work full or part time and have family responsibilities, including financial obligations,” which means online access to college classes may be the only access they have.

ASU and other state universities should focus on core academic programs and direct spending not to administration but on practices directly tied to student instruction. In addition, Arizona colleges and universities should align tuition more closely with the actual costs of providing an education, pursue more private funding, and make themselves more financially self-sufficient.

Jonathan Butcher is education director for the Goldwater Institute.


True to Her Traditions – At Last

November 11, 2011

(Guest post by Greg Forster)

On Veterans Day two years ago I posted a sharp condemnation of my grad school for its contempt of the military, even in defiance of its own traditions. In the comments, I made a promise that I would be prepared to post something more cheerful for Veterans Day “when the Ivies quit spitting on the people who fight and die to preserve their right to spit on them.”

Yale is bringing back ROTC, along with Harvard and Columbia. Princeton refuses to budge. Brown is still considering its position. Cornell, Dartmouth and Penn had already brought it back before this year.

I’m not sure at what point my stated obligation to “post warm fuzzies about mom and apple pie” kicks in, and I’ll admit that I don’t think the series of events leading up to these developments generally augers well for civil/military relations. But that war is over and now is a time for reconciliation. Six of the eight Ivies now offer military training within their for-credit educational curricula. That is progress.


One Book, But Why That Book?

September 13, 2011

In the last decade a large number of colleges and universities have initiated a “community reading” program, where everyone in a university and its neighboring community is required or strongly encouraged to read one book and discuss it over a series of events in an academic year.

In principle the One Book idea sounds great.  Even as core curricula in higher education are being eviscerated, this appears to be an effort to have a shared intellectual experience on issues that are central to the missions of each participating university.

The practice, however, has not met that potential.  As Harold Bloom put it, “I don’t like these mass reading bees… It is rather like the idea that we are all going to pop out and eat Chicken McNuggets or something else horrid at once.”  Of course, we don’t have to select the book equivalent of Chicken McNuggets, but in practice that’s what universities appear to be doing when they choose their One Book.

The National Association of Scholars (NAS) has a report that documents what books universities actually choose based on a review of One Book programs at 245 universities and colleges.  The results are incredibly disappointing.  Rather than choosing high quality and intellectually stimulating books, universities tend to pick current, shallow, popular books. In particular the NAS report finds:

First, almost 90% of the books selected were published since January 2000.  If important works tend to stand the test of time, almost none of the One Books have passed that test.  Once you look at the list of what was selected, I think it’s safe to bet that almost none of them will be read a hundred years from now.  Rather than exposing the university community to enduring truths or works of enduring quality, the One Book programs almost always picks a topic that is likely to be a passing fad or a disposable work.

Second, the topics are remarkably skewed toward what is considered politically correct.  Out of the 245 selections, 58 were on African American themes, another 18 on African themes, 10 on Native American themes, 7 on Latino themes, 5 on East Asian themes.  24 One Books were about environmentalism, 10 about Hurricane Katrina, 10 were comic books or graphic novels, and 8 were self-help books or about the pursuit of happiness.

Third, memoirs and biographies dominated the list.  There were 79 memoirs and 62 biographies, more than half of the total.  Why so many memoirs?  The NAS report answers:

… memoirs are “a genre familiar to students.” In high school English courses, students are taught to base their interpretation of works of literature on their own personal experiences. A recent study on high school literary study finds that this emphasis on the personal “may be contributing to the high remediation rates in post-secondary English and reading courses.”

Training students to write from the perspective of personal reflection gives them a taste for more of the same. This is one explanation for the popularity of the memoir in common reading programs. Another is that our society has an appetite for true stories. The growing number of reality TV shows is evidence of this. Getting to hear from the author in person at a scheduled campus speech is part of the allure of the memoir. The emphasis on memoir may also reflect the rise of post-modern sensibilities in American higher education. A memoir often presents “my truth,” rather than “the truth.” It is a way of asserting the primacy of self and the importance of opinion as trumping common judgment, authority, and hard-won facts.

The most popular One Book is The Immortal Life of Henrietta Lacks(2010) by Rebecca Skloot, which was selected at 39 of the 245 institutions.  The NAS report describes the work:

The book does make a history of complex scientific research accessible to average readers, and Skloot explains biological jargon in simple terms. Readers will come away from the book having learned new things, but the writing itself is journalistic, not intellectual. Judging by what they say about it, some colleges seem to have chosen The Immortal Life of Henrietta Lacks in part because it can be read as a story of racial injustice.

Tied for the next most popular is Zeitoun by Dave Eggers, which was selected by 9 institutions. Wikipedia summarizes the plot:

 It tells the story of Abdulrahman Zeitoun, the Syrian-American owner of a painting and contracting company in New Orleans who chose to ride out Hurricane Katrina in his Uptown home. After the storm he traveled the flooded city in a secondhand canoe rescuing neighbors, caring for abandoned pets and distributing fresh water. Soon after the storm, Zeitoun was arrested without reason or explanation at one of his rental houses by a mixed group of National Guardsmen and local police. He was not immediately charged with a crime but was imprisoned for 23 days without having stood trial. During that time he was accused of terrorist activity presumably because of his ethnicity, was treated inhumanely, and was refused medical attention and the use of a phone to alert his family. His wife and daughters, staying with friends far away from the city, only knew that he had seemingly disappeared from the face of the earth.

Also selected by 9 institutions was This I Believe: The Personal Philosophies of Remarkable Men and Women, which is a self-help book by Jay Allison and Dan Gedimen.  Seven institutions picked The Other Wes MooreOne Name, Two Fates by Wes Moore.  NPR summarized the plot:

 In the book, author Wes Moore tracks his own life, alongside the fate of another man of the same name.

While both Wes Moores grew up in poverty in Baltimore, the two men had dramatically different fates: The author became a Rhodes Scholar, while the other Moore is serving a life sentence in prison for murder.

And 6 universities or colleges chose No Impact Man by Colin Beavan about a New York City family that attempts to have no impact on the environment for an entire year by buying nothing newly made, producing no non-compostible trash, and only buying food produced within 250 miles of their apartment.

Another 6 chose The Absolutely True Diary of a Part Time Indian, which Wikipedia says “is a novel for young adults written by Sherman Alexie. It is told in the first-person, from the viewpoint of Native American teenager and budding cartoonist Arnold Spirit, Jr. (better known by the nickname “Junior”). Detailing Arnold’s life on the Spokane Indian Reservation and his decision, upon encouragement from a reservation high school teacher, to go to an all-white high school in the off-reservation town of Reardan, Washington, the novel deals with issues such as racism, poverty, and the following of tradition.”

If you didn’t notice Shakespeare, Camus, Ellison, or Plato on the list, you’d be right.  But the NAS helpfully compile a list of 37 suggested books that includes these authors and would be far better for One Book programs.

As the old United Negro College Fund commercial used to say, “A mind is a terrible thing to waste.”  So is the opportunity for everyone at a college or university to read and discuss a quality book.

(edited for typos)


Benjamin Ginsberg on Administrative Bloat in Higher Ed

September 9, 2011

Johns Hopkins political scientist, Benjamin Ginsberg has a new book out: The Fall of the Faculty: The Rise of the All-Administrative University and Why It Matters.  In it he documents how universities have experienced explosive growth in the number of administrators and other non-faculty professionals and how this administrative bloat is making costs soar while distracting universities from their primary mission.  His argument is virtually identical to the report I wrote last year with Brian Kisida and Jonathan Mills that was released by the Goldwater Institute.

I’m thrilled that Ginsberg is getting more attention for this issue.  Here is a taste from his Washington Monthly article summarizing his book:

Between 1975 and 2005, total spending by American higher educational institutions, stated in constant dollars, tripled, to more than $325 billion per year. Over the same period, the faculty-to-student ratio has remained fairly constant, at approximately fifteen or sixteen students per instructor. One thing that has changed, dramatically, is the administrator-per-student ratio. In 1975, colleges employed one administrator for every eighty-four students and one professional staffer—admissions officers, information technology specialists, and the like—for every fifty students. By 2005, the administrator-to-student ratio had dropped to one administrator for every sixty-eight students while the ratio of professional staffers had dropped to one for every twenty-one students.

Apparently, as colleges and universities have had more money to spend, they have not chosen to spend it on expanding their instructional resources—that is, on paying faculty. They have chosen, instead, to enhance their administrative and staff resources….

Every year, hosts of administrators and staffers are added to college and university payrolls, even as schools claim to be battling budget crises that are forcing them to reduce the size of their full-time faculties. As a result, universities are now filled with armies of functionaries—vice presidents, associate vice presidents, assistant vice presidents, provosts, associate provosts, vice provosts, assistant provosts, deans, deanlets, and deanlings, all of whom command staffers and assistants—who, more and more, direct the operations of every school. If there is any hope of getting higher education costs in line, and improving its quality—and I think there is, though the hour is late—it begins with taking a pair of shears to the overgrown administrative bureaucracy.

I also particularly enjoyed this bit Ginsberg had on strategic planning at universities:

Another ubiquitous make-work exercise is the formation of a “strategic plan.” Until recent years, colleges engaged in little formal planning. Today, however, virtually every college and university in the nation has an elaborate strategic plan. This is typically a lengthy document— some are 100 pages long or more—that purports to articulate the school’s mission, its leadership’s vision of the future, and the various steps that are needed to achieve the school’s goals. The typical plan takes six months to two years to write and requires countless hours of work from senior administrators and their staffs.

A plan that was really designed to guide an organization’s efforts to achieve future objectives, as it might be promulgated by a corporation or a military agency, would typically present concrete objectives, a timetable for their realization, an outline of the tactics that will be employed, a precise assignment of staff responsibilities, and a budget. Some university plans approach this model. Most, however, are simply expanded “vision statements” that are often forgotten soon after they are promulgated. My university has presented two systemwide strategic plans and one arts and sciences strategic plan in the last fifteen years. No one can remember much about any of these plans, but another one is currently in the works. The plan is not a blueprint for the future. It is, instead, a management tool for the present. The ubiquity of planning at America’s colleges and universities is another reflection and reinforcement of the ongoing growth of administrative power.

Be sure to check out Ginsberg’s book.  We plan to have some meetings to discuss it, will form a study group to consider recommendations, and will then issue an action-plan that is aligned with our strategic priorities.


Bloat? I Don’t See No Stinkin’ Bloat

June 27, 2011

An organization representing State Higher Education Executive Officers (SHEEO) released a report a little while ago on staffing trends in higher education.  The report never names the report Brian Kisida, Jonathan Mills, and I released last year showing how administrative staff grew much more rapidly at research universities between 1993 and 2007 than did instructional and research staff.  But it is clear that this new report is meant to be a refutation of sorts to what it describes as “similar analyses of staffing patterns,” meaning our report.

Using the same federal data source, the new report comes to what appears to be a very different conclusion:

While total staff levels grew 18 percent from 2001 to 2009, the total number of FTE students grew by 29 percent, resulting in a decrease in the overall number of staff per 100 FTE students by 8 percent. “Most institutions improved their educational efficiency by educating more students with fewer staffing resources,” the SHEEO report stated.

What explains the seemingly different conclusions?  The SHEEO report does not group staff into the same categories that we do, it looks at a different and shorter time period, and it expands its scope to include non-research Associates degree and BA granting institutions, which comprise 91% of all of the sample they observe.  We focus on the other 9% of high research universities.

The most important of these differences is the way in which staff are grouped.  The point of our report was to compare growth in administrative staffing relative to instructional and research staffing.  We defined administrative staffing as a combination of the “Executive/Administrative and Managerial” and the “Other Professionals” categories, since these represent the higher-paid professionals who provide non-instructional and non-research services to students, from Deans to student counselors.  When we compare the growth of these folks to the growth in faculty we see that universities have been devoting much more of their newly obtained resources to these non-instructional and non-research services.  That is, our leading research universities are using new resources to stray further from their core missions of teaching and research and to expand into a host of peripheral services.

The SHEEO report concludes that institutions have “improved their educational efficiency” only by combining all staff into one big category.  If you dig deeper into their report where they break the results out by category, you can see that they also find that faculty staffing ratios have declined while senior executive and professional staffing ratios have grown.  In Table 4 the total ratio of Executive and Other Professional staff to students went from 5.04 per 100 students in 2001 to 5.07 in 2009, while faculty declined from 8.41 to 8.09 during the same time period.

That is, the SHEEO report confirms our basic finding.  It only concludes that higher ed has improved its efficiency by adopting the strange idea that greater efficiency means cutting faculty while growing executive and professional staff.

It is also worth noting that the SHEEO report does not go back to 1993 as we did.  We covered the years 1993 to 2007 because they were the earliest and most recent years for which data were available at the time we wrote the report.  If SHEEO had gone further back they would not have found the improved efficiency they claim to find since 2001.  In our report we found overall staffing levels increased from 31.4 full and part time staff per 100 students to 35.5 in 2007, an increase of 13.1% in overall staffing levels.  We also observed an increase if we look only at full time staff.  SHEEO is only able to find greater overall efficiency (defined strangely by them as cutting faculty even more than growing non-faculty professionals) by starting their analysis in 2001 rather than 1993.

This spin-job by SHEEO hasn’t gained much traction, so I hadn’t even noticed it for more than a month after its release.  But I’m sure that it is being waived around in meetings of boards of trustees if they begin to ask about administrative bloat as a result of our report last year.  Trustees shouldn’t be fooled.


									

Odds and Ends

March 23, 2011

WordPress was down most of yesterday, preventing me from posting.  Here are some of the topics I was considering for a post:

  • I finally saw The Social Network.  As always, I enjoyed Aaron Sorkin’s clever, rapid-fire dialog, but I couldn’t stop thinking about how creepy it was to write a fictionalized and unflattering account of real, living people.  There is no evidence that Mark Zuckerberg is the status and girl-craving jerk that Sorkin made him out to be, but there is plenty of evidence that Sorkin behaves that way.  I guess the film is really a fictionalized autobiography of Aaron Sorkin, except that Sorkin didn’t create a multi-billion dollar enterprise that tens of millions enjoy using and that has helped topple despots in the Middle East.
  • I saw that my fellow Manhattan Institute-refugee, Walter Olson, has a new book out on how law schools perpetuate a political ideology that gives more power to lawyers and government. Schools of Misrule sounds like it has a fascinating thesis except I suspect that the same argument could be made about almost every department at universities.  I can assure you that the social sciences are filled with people who sit around in their offices dreaming about how the rest of the world should be structured if only the world would listen to them.  I guess the difference is that law school grads are actually more likely to have to power to put their dreams into action.
  • Jim Stergios has a great post over at Pioneer comparing Bill Gates and Steve Jobs on their visions for education.  He writes:

So Bill Gates lets us all know what he really has in mind on standards and the liberal arts. In a speech to the National Governors Association in late February, he suggests that higher education spending be devoted largely to job-producing disciplines.

In his view we should drop funding at the higher ed level for the liberal arts, because there is not much economic impact/job creation impact from the liberal arts.

Compare that to Steve Jobs, who during his release of the iPad 2 (admittedly not the most successful launch I’ve seen of an Apple product), trumpeted the liberal arts.

Be sure to read the full thing because the quotations from Gates and Jobs are illuminating.


Universities as Non-Profit Conglomerates

March 8, 2011

Mission creep is the bane of the modern university.  Once upon a time universities believed that their mission was the discovery and dissemination of knowledge.  Accordingly, they focused on teaching and research.

Universities are now straying far from this core mission and launching an array of new enterprises.  They run health-care systems, engage in property re-development, serve as venture capitalists for start-up businesses, etc…

To reflect their new status as non-profit conglomerates, universities espouse missions that are only tangentially related to their previous core function of education.  No longer do universities emphasize their founding mottos, such as “veritas” or “disciplina in civitatem.”  Instead, we see Ohio State University calling itself the “economic engine” of Ohio and declaring “We’re in the progress business.”

No they aren’t.  At least, they shouldn’t be.  They are in the knowledge business.  Universities forget this at their and everyone else’s peril.

The more that universities see their mission as progress or being an “economic engine,” the more they are straying into business at which they are less competent, on which they lose more money, and which distract them from their core responsibilities.

We have had experience with profit-seeking industrial conglomerates in the 1970s and it didn’t go very well.  Businesses grew large, unfocused, and overly bureaucratic.  But in the business-world, there is a remedy for this type of gross inefficiency.  Corporate raiders took-over these conglomerates and made a fortune breaking them up and selling off the pieces.  They realized that these businesses would be much more effective if they weren’t combined in a conglomerate.

The non-profit sector lacks a similar remedy.  Universities are expanding into a variety of businesses and there is no one to stop them other than a board of trustees which has been fully-co-opted by administrations (just as the boards of industrial conglomerates were co-opted by their management teams).  Raiders can’t purchase the grossly inefficient non-profit conglomerates masquerading as universities and make a fortune by breaking them up and selling off the pieces.  Instead, we increasingly suffer from administrative bloat and inferior quality education.

The only prospect for these non-profit conglomerates to be broken-up is that they tend to lose more money with each new venture.  We shouldn’t expect universities to be efficient at operating health-care systems, property re-development, or venture capitalist operations.  They claim to be attracted to each new enterprise as a way of making money to subsidize their core functions, but the reality is that their losses pile-up and their administrative over-head swells as they experience mission creep.  They all fantasize that their venture capitalist efforts will spawn the next Google, but I am willing to bet that the average return on start-up businesses for universities is negative.

Returning to our Ohio State University example, their total annual revenue has grown to $4.7 billion.  It becomes very difficult to run a $4.7 billion business that also teaches individual students well and conducts quality research.  As OSU’s president, Gordon Gee, describes his institution: “Universities are large and complex — ours more so than any other. Trying to describe all that we do in one sentence seems a daunting task.”  Gee, President Gee, maybe that should be a sign that OSU is trying to do too many things.

Of the $4.7 billion in annual revenue, OSU gets $2.3 billion from its Medical Center.  Why should universities also operate gigantic health care systems?  I understand that universities may want a relationship with hospitals to help train their students and provide opportunities for research, but frankly that can be done without having to own them.  And even if it were efficient to own a hospital for teaching and research opportunities, there is no reason to own an entire network of medical  facilities and services.

I’ll bet that OSU requires large government subsidies for both its medical and traditional educational operations.  And I’ll further bet that those loses could be reduced, on both ends, if they spun off their Medical Center.  The reasons to combine them and to add a host of other “economic engine” activities is not financial or educational efficiency.  The reason is to satisfy the desire for empire building among senior university officials and their compliant boards.

We may not have corporate raiders to break-up these non-profit conglomerates, but we will eventually have angry taxpayers who grow tired of subsidizing their losses.  When the subsidies get cut, universities will be forced to shed these extraneous and money losing ventures and focus once again on teaching and research.


Higher Education Probably Won’t Help Our Economy

February 7, 2011

Bloated, wasteful and ineffective is no way to grow an economy
(Guest Post by Patrick Gibbons)

As the rest of the Nation recovers Nevada’s economy still seems to slide further and further into the abyss. Nevada has the nation’s highest unemployment rate (over 14 percent). We also face a significant budget shortfall. The general fund revenue for the state budget is projected to be $5.3 billion for the next biennium – current spending is $6.4 billion.

Governor Sandoval has proposed cutting the budget and implementing reforms – most notably for education. Higher education in particular is slated for a 7 percent cut in state appropriations (17.5 percent if you include the lost ARRA federal subsidy).

To discuss the magnitude of the cuts the Board of Regents called a meeting on February 3, 2011. After three hours of testimony the only solutions presented were 1) close class sections, 2) reduce enrollment and 3) terminate faculty.

Oh no, budget cuts… Again.

The colleges and universities of Nevada have also been rolling out a new PR campaign. They’ve argued “invest more in us and we’ll help grow and diversify the economy.”

The relationship between higher education and positive economic growth is “indisputable” claims the state’s higher education chancellor Dan Klaich.

Its not at all clear that higher education can help grow Nevada’s economy. Naturally, a more educated work force can be more productive and earn higher incomes. But that assumes we’re actually educating people in the first place. It also assumes that jobs are created just because of education quality rather than a host of other factors.

First of all, states with top tier universities like California, New York and Michigan are bleeding residents and jobs. Its not just these three, a host of other states with top universities are also struggling to create jobs and keep residents. Between 2000 and 2008 the combined net migration rate for states with an Ivy League school was -2.5 million. Nevada, with its 3rd and 4th tier universities, had a net migration rate that was higher than the combined rate of all 32 states with a top 100 university. In fact, having a Top 100 University as ranked by U.S. News and World Report means a state also averages a statistically higher unemployment rate (nearly 3 points higher than not having a top 100 university).

University officials in Nevada are making a very basic logical fallacy. They are seeing Nevada’s economic struggles (fact) and assuming that Nevada’s low percentage of college graduates (fact) must be a reason why the economy hasn’t diversified and recovered. This fallacy leaves them believing they’re the saviors of Nevada, thus, we can’t cut their budget.

Conveniently, they forget the fact that prior to this economic crash Nevada sustained high economic growth, population growth, high income-per capita, and below average poverty rates for DECADES, despite having a “poorly educated” populace.

There is probably a more robust positive relationship between higher education spending
and keg stands than with economic growth.

It is especially unlikely that further investments in higher ed will boost Nevada’s economy when the Universities spend so much already and produce very little in return.

UNLV spends $19,000 per FTE student and only graduates 48 percent of the full-time students within 8 years. Meanwhile, UNR spends over $34,000 per FTE student and graduates merely 54 percent after 8 years.

At the Regents meeting I pointed out that UNLV and UNR spend more money per-pupil and employ more adults per-pupil to do the same job. According to Dr. Jay Greene’s report “Administrative Bloat at American Universities” both UNLV and UNR grew their employees faster than the student body between 1993 and 2007. UNLV saw inflation-adjusted spending per-pupil rise 59 percent while UNR saw spending rise 21 percent.

According to the U.S. Department of Education, UNLV’s inflation adjusted credit-hour costs have risen 90 percent while fees increased a whopping 771 percent over the last decade. At UNR the increase was 80 percent and 290 percent respectively.

How can anyone consider UNLV or UNR to be a wise investment? Spending more and more money to employ more adults to do the same shoddy job will not grow our states economy. At best it will do nothing at all. At worst, it may actually retard or reverse economic growth.

My two minutes of comment were up at that point, but the damning facts keep piling up. The Lied Institute at UNLV released a rather shoddy report calling for more “investment” in higher education, pointing two Arizona and Utah as states to emulate. I’ve blasted the report to pieces here and here.

Failing to conduct even the most basic literature review or even analysis on state spending, the Lied Institute researchers failed to notice that Nevada already spends more on education and research per-pupil than Utah and Arizona (see figure 11 on page 29).

In particular the Lied Institute researchers and Brookings Institution Mountain West have called on lawmakers to emulate Arizona State and the University of Utah.

ASU spends $28,000 per-pupil on “Education and General Expenditures per FTE” according to the Education Trust. That is $6,000 less than UNR, Nevada’s flagship university. As much as Arizona State is made fun of for their low-quality, they spend less and graduate more of their own students than UNR.

The University of Utah does in fact get the lion’s share of resources in Utah – spending over $50,000 per FTE. Embarrassingly, their 6 year graduation rate is 51 percent. They make Arizona State – a university lampooned by everyone including SNL and the Daily Show – look like Harvard AND a bargain.

Worse still may be the quality of, at least some, of the faculty in Nevada. One professor employed at the University of Nevada – Reno wrote me via Facebook to accuse me of believing what I do because I’m paid to believe it. Of course he “believes with all [his] heart in the mission of the university” and is “proud of [the university’s] progress” and success.

After pointing out the irony – he has called for higher taxes to fund his own employer where he makes $143,000 a year – I asked him exactly what the university’s mission was and what does he mean by success.

Just 12 percent of UNR’s students are considered low-income (Pell Grant recipients) and just 11.6 percent are underrepresented minorities (white non-Hispanics make up just 56 percent of the population in Nevada and less than half of the K-12 student population).

I wondered if the mission was to spend $34,000 a year to graduate half the students within 8 years – the vast majority of whom were middle/upper class and white.

If that his definition of success and progress, then I think the Klan might agree with him. Or at least the Joker…

Nevada needs to rethink the higher education paradigm because being bloated, wasteful and ineffective is no way to grow an economy.


Government Takeover of STEM

January 4, 2011

(Guest post by Greg Forster)

In his Sunday column, George Will advocated a government takeover of the economy. Well, not quite – but close.

Will points out, correctly, that the economy is really, ultimately driven by the discovery of new ways of serving human needs. From this, he concludes that the enormous government regime of subsidies (and consequent control) of “basic science” and other STEM (science, technology, engineering and math) research in universities must not only continue, but be dramatically expanded.

He makes the by-now standard argument for government control of STEM:

  1. STEM contributes to the economy through “basic science.”
  2. “Basic science” doesn’t yield useable results rapidly enough to show up on quarterly earnings reports.
  3. Businesses are incapable of seeing past quarterly earnings reports when making decisions.
  4. Therefore, only government (through its hired retainers in the universities) has a long enough time horizon to be entrusted with control of basic science, and hence STEM.

How is this wrong? Let me count the ways.

The error starts right at the beginning. “Basic science” is not what drives entrepreneurial innovation and economic flourishing. “Basic science” is part of the liberal arts and is not all that much different from the study of poetry. It’s about investigating the fundamental structure of the universe simply for the sake of understanding it – just like poetry, in a different way, investigates the fundamental structure of the universe simply for the sake of understanding it. Basic science not only doesn’t produce economic benefits on a quarterly basis, it doesn’t produce economic benefits at all (except insofar as it contributes generally to the maintenance of a humane culture). 

This matters because it is universities who fundamentally drive “basic science,” but not entrepreneurial innovation. There’s a reason Bill Gates had to leave Harvard to found Microsoft.

It’s entrepreneurially minded businesses that drive entrepreneurial innovation and economic flourishing. The assertion that businesses don’t support long-term innovation is false. Some do, some don’t. The ones that do are where the dynamism of the economy comes from. Google encourages employees to spend a set portion of their time working on side projects over which they have total control, and which are not expected to produce defined results; the Google News service was created as one such project. Yes, there are many businesses that can’t see past their quarterly earnings reports. But the solution to that is for a partnership of philanthropy and educational institutions to raise up a new generation of entrepreneurial leaders who can see past their quarterly earnings reports.

If business as a sector is congenitally and permanently incapable of long-term thinking, the United States is scrod, and we should all quit trying to save it.

The worst error is to think that government and universities are capable of better long-term strategic thinking than business. The opposite is the case. Just look at the outstanding examples of long-term strategic thinking we have before us in those sectors today – in government, $14 trillion debt with bailouts, nationalizations and endless Keynesianism (on the right and left) at home, and fecklessness and appeasement abroad; in the universities, a ridiculously unsustainable business model, the most dysfunctional labor policy (tenure) of any sector of society, and a total abandonment of the sector’s core function (education for human life) in favor of hyperspecialization of technical competencies.

The main difference between business and the government/university axis is that business occasionally does really take care for the long term.