No Pain Economies

Many people do not realize that budget cuts in higher education to do not mean greater economies and care in how money is spent. All it means is that the state itself is not forking over the money. If you can get the money elsewhere there is little self-interest-based reason to cut spending or tighten your belt.

This is clearest when you consider one Law School's plan to deal with decreases in state funding -- eliminate students. How does that make sense? The funding is tied to number of students and all the State seems to care about is money spent, not the number educated or the quality of that education. It all works, depending on the elasticities of demand and raising tuition for the remaining students. In public utility terms this is simply passing on the costs. The managers of the utility (administration and faculty) don't feel a thing (except for decreased future pay raises) while the cost is shifted to admitted students and those who will not be admitted who otherwise would be.

As I have often written, publicly subsidized legal education -- especially in some specialized fields -- puzzles me. What is the public good rationale for asking taxpayers to pay for the legal education of others? (How about more special ed. teachers instead?) And, even of that subsidy does take place, why is it related to GPAs and LSAT scores as opposed to need. Given those doubts, this turn to privatization should please me.

But something seems to be missing in the equation. Jim Chen's blog on Moneylaw made me realize what it is. Budget cuts can result in one of two reactions. One is belt tightening. In that sense those affected are part of the broad community of those affected by the economy. Or it can result in scrambling to avoid feeling the squeeze. In this is the path taken, at the very least a Law School planning to apply the same funding to far fewer students should have a plan to enrich the lives of those remaining. If this does not happen, ironically, the result of a budget cut is even greater waste.