What Does It Take Be Number 1?

President Obama said the following in an address at the University of Texas on August 9, 2010 (emphasis mine, source):

And while our ultimate success has and always will depend on the industriousness of the American worker, the ingenuity of American businesses, and the power of our markets, we also know that we, as a nation, must do what it takes to make sure America remains number one.

That’s why I’ve set some ambitious goals for this country. I’ve called for doubling our exports within the next five years. Doubling our nation’s capacity to generate renewable energy by 2012. And producing 8 million more college graduates by 2020 so we can have a higher share of graduates than any other nation on earth. In a single generation, we’ve fallen from first to twelfth in college graduation rates for young adults. That’s unacceptable, but not irreversible. We need to retake the lead. If we’re serious about making sure America’s workers – and America itself – succeed in the 21st century, the single most important step we can take is to offer all our kids – here in Austin, here in Texas, and across this country – the best education the world has to offer.

Who would argue with that?  It sounds really good.

But, I have to admit these kind of proclamations have always been empty and ambiguous to me.  Specifically the areas I added the emphasis.

“…we, as a nation, must do what it takes to make sure America remains number one.”

Number one in what precisely and why?  Number one in GDP per capita?  I’m not sure that matters so much.  Number one in military might?  That might be a good one if we would like to retain the right to decide our future.

But, the point here is that it’s not clear to me what we need to remain number in one in why.  Perhaps the answer is his next paragraph where he specifically says we need to retake the lead in college graduation rates for young adults.  He goes onto imply that this metric somehow is tied to making America succeed in the 21st century.

Now Seth, what on Earth is wrong with that?  That sounds like a noble goal.  Are you kidding?  Of course college education is tied to success!

Well, to me, that sounds exactly like the thinking that got us into the housing crisis.  Politicians from the left and right said things like, “Let’s expand the dream of home ownership!”  Then they endorsed policies that led to watered down lending criteria, cheap credit that artificially increased demand and then a burst bubble in the real estate market and smack to our economy.

“Let’s expand the dream of a college education!”

But, remember, good intentions do not necessarily translate to good results.  College education seems like a well-intended goal and is an easy sell for politicians — to get the politicians votes.   But, so did expanding home ownership.  What could possibly be wrong with that?  We found out.

Thinking that a #1 college graduation rate is the key to economic success, assumes things that may not be true.

It assumes the the college graduation rate is a valid measure for economic success.  It assumes that the demand for college educated workers is higher than the current supply (or that college educated workers make too much money and their wages must be lowered by increased supply).  It assumes that innovation and prosperity come primarily from college education.  It assumes the reasons America has fallen behind in college graduation rates are bad.   It assumes that for some reason the market in higher eduction isn’t functioning properly and requires government intervention to be fixed.

Perhaps there are other plausible reasons why America has a lower graduation rate.  Maybe, income that can be made in fields that do not necessarily require a college education — like HVAC repair, plumbing, computer programming, entrepreneurship, chefs — has become more competitive with the income that can be earned from a college education causing more people to freely choose to skip college.

Maybe the quality of college education has declined.  Many people say that getting a college degree today is like getting a high school diploma 30 or 40 years ago.  That may be due to grade inflation in K-12 and college education.  That may also be due to the increase in access of education through funding programs.

Maybe young adults have more options as a result of the great wealth produced in this country.  I know people with moderate sources of wealth, like the money their parents made over the past 25 years and the incomes earned by spouses, to allow them to have their basics (home, food, comfortable living) covered and do things like start businesses and volunteer and do what they love to do.

Let’s avoid a college education bubble by fixing the thinking that an artificially high graduation rate is a good thing.  Let’s remember that keeping America #1 is about letting us make the choices and trade-offs that are right for us.

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