A Stitch in Haste

ITEM: That which should be, might not be:

The New York State Board of Regents has imposed a moratorium on new commercial colleges in the state, in the face of explosive growth in their enrollments and increasing reports of problems.

The freeze comes as state education officials, the governor and lawmakers are examining ways to tighten regulations or financing of this fast-growing sector of higher education, which is consuming more than $100 million in state aid.
…
The flow of public money to such schools is one reason they are drawing scrutiny. A recurring question is whether some schools are enrolling students who have little hope of graduating simply to capture the financial aid.

MY TAKE: That last paragraph is key — the only reason there is fraud among these private colleges is because the state is making it so easy by throwing so much taxpayer money around. In any case, consider exactly what the Board of Regents has done — the current market participants are behaving sub-optimally, so let’s keep them but prevent newcomers from setting up shop, which could actually clean up the industry. Brilliant.

These for-profit schools exist for another reason besides bilking the government. Some of them actually provide the education that the public school system is unable to provide.

The answer is for Albany to get its own house in order, not to disrupt an important and legal market. Remember, for-profit education is not illegal — fraud is illegal. Why throw out the baby with the bathwater?

More thoughts at Becker-Posner.

—

ITEM: That which should not be, might be:

As yet another auto plant prepares to shut is doors, the mayor of Flint, Michigan has come up with a radical — and possibly illegal — plan: a city-run assembly plant.
…
“We will (build) our own manufacturing plants that the city funds,” [Mayor Donald Williamson] said. “We are going to specialize in nothing but truck accessories.”
…
It’s not clear if the city would be allowed to run a for-profit enterprise, and many have questioned the rationality of the plan.

MY TAKE: The question of whether such a plan is legal is a side issue. What strikes me about this asinine proposal is the arrogance that this local hack politician displays toward running a major factory in the Twenty-First Century, as if it were a paper route or a bake sale. It’s a new twist on the old Marxist lie — that literal “capitalists” (i.e., those who actually own and operate capital) are zero-value-added “exploiters” who can be summarily replaced with no impact to the firm itself. To socialists like Williamson, the need for entrepreneurship does not exist, the need for innovation does not exist, the need for market research does not exist, the need for risk-taking does not exist. Just throw the switch, pass Go and collect 200 jobs. Only a politician could display such limitless hubris.

(Via The Perfect Substitute.)