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Monday, August 17, 2015

Monday, August 17, 2015

HIllary Clinton and Phyllis Wise: Signs of Better Things

The Democratic candidates public college plans are more interesting than most coverage has implied (brief comparisons are here). They are all variations of "Debt-Free College" proposals, to use candidate Martin O'Malley's term, structured in part as federal bailouts of state universities.  They are grossly underfunded, but they establish new principles and could launch a new political struggle for public eduction reconstruction.

My suspicions thawed as I read through them. It's hard to work in the sector and not be excited that maybe the federal government will save public universities from their states.  It's equally hard not to be excited about real reductions of student costs and student debt, which have led to U.S. attainment declines, the unjustifiable burdening of Millennials, and other assorted evils.  More pressure to fix debt was added by a shocking St. Louis Fed report whose findings were summarized by the NYT coverage as "Racial Wealth Gap Persists Despite Degrees."  The headline should have been, "Racial Wealth Gap Increased by Getting Degrees."  Gaze at this figure for a while (from the original report--as already explained by Shapiro & Oliver twenty years ago):

College not only doesn't end racial stratification--it increases it.

So what are the chances of a fix? Bad for now, but better later.

The Obama Administration has been laying some groundwork: it just announced a revised "pay as you earn" (Repaye) plan, under which "Monthly loan payments for participants in the repayment program will be capped at 10 percent of their discretionary income. Any loan balance remaining after 20 years of payments will be forgiven."  This will lead to big cuts in monthly payments for lower-income graduates--from $333 to $61 in the NYT article's example as well as de facto loan forgiveness.

The big new campaign announcement was the New College Compact, Hillary Clinton's battleship of a college plan that is trying to swamp Bernie Sanders' College for All sailboat with sheer tonnage of items addressed.

Mrs. Clinton's plan involves mostly breaks in interest payments on student loans (one-third of her total).  Another chunk would go to an "innovation fund" for developing some non-college learning infrastructure and better information and enforcement of existing loan regulations (it's a hodge podge).  Half of her new funds would go to grants to state colleges to offset tuition reductions, coupled with unspecified new quid pro quos about tuition and cost reduction.  Her total is $350 billion over 10 years.

Bernie Sanders's plan is not so different, except it focuses less on cracking down on bad actors in the sector and has an annual total of $70 billion, or twice Mrs. Clinton's.  There aren't yet a lot of details to sweat, though clearly Mr. Sanders's figure is much closer to the price tag that would make free public college a reality.  Mr. O'Malley lacks details but has the most heartfelt rhetoric.

There are a few general issues worth mentioning.

First, the political center on public colleges has moved.  It has moved left, away from letting "market forces" continue to pile up student costs and student debt.  Free community college has been endorsed by the US President.  Free 4 year college is now on its heels.  In almost no time, politicians like Mr. O'Malley have started to write, "today, our kids aren't getting the same bargain that my dad did" as the new common sense.  Bob Samuels has pointed out that a couple of years ago his book Why Public Higher Education Should Be Free made him a "lone, crazy voice in the wilderness."  Now "free" is a respectable part of the mainstream debate.

Second, we're witnessing not just a changing political balance but a paradigm shift. The Democratic college plans try to (1) lower debt payments by (2) reducing public college tuition so that less debt is incurred in the first place. They propose to do this by (3) giving federal money directly to state colleges to offset lost tuition income and (4) forcing state legislatures to stop cutting higher ed and even rebuild its funding. Jordan Weismann has a helpful summary of the new Democratic consensus.

This combination of elements is a very big deal. It would roll back our de facto federal voucher program for college students in which non-research federal money goes to students who turn it over to the school of their choice in the form of tuition.  Many or most states will fight this as they fought Obamacare, and for the same reason--expanding a public service they don't like with new federal money that requires a cost share from them.   There will be blood. But we have hit a milestone that might remind some people of the road to Medicare, which established the public-good principle for full health care coverage in retirement, which then made accomplishment the responsibility of public funding.

The third issue is that tuition increases for resident B.A. students are going to stay off the political table.  Of course in the short or even medium run, politicians won't actually replace tuition revenues with public funding increases. This is bad news for public U operating budgets, and this is no doubt why short-termers at public universities are preemptively denouncing free tuition. It's good news to people like me who want to see the case for the public funding become politically cheaper by making the case for constant tuition increases politically more expensive.  The intellectual and ethical arguments for the public side are there, and now their political price is coming down.

Fourth, the senior managers who try to drift near the political center are going to miss it, since it has moved.  That is what has been happening in California, where Janet Napolitano thought tuition increases had a few more years of political life than they actually did.  Time's almost up for non-resident tuition increases--there's maybe a year or two more before a major backlash against selling UC flagship seats to non-residents while redirecting residents to the campuses they didn't want.  The new center is under active construction and it would be good for the heads of systems to be part of this, which they won't be if they spend their time fighting it.

Fifth, the Democrat's means won't achieve their alleged ends.  The candidates still propose no-new-taxes positions.  They want to pay for the biggest change in university policy in a couple of generations with marginal revenues: the reduction of rich folks' income tax deductions (Mrs. Clinton); a Tobin tax on financial transactions (Mr. Sanders). Both are good ideas for general policy reasons.  Neither offers either sufficient money to buy off the states or the deeper principle that would build public support.

That deeper principle is the public-good value of having a very large number of unindebted people with bachelors degrees.  A related principle is that the most efficient way to pay for a public good is with general taxes. You want to increase a public good's consumption (e.g., vaccinations), not ration it with a market price system or carve the revenues up with banks and other providers in an orgy of profit-taking.  Everyone can understand this public-good argument if US politicians actually make the argument.  The Democrats lost their momentum 40 years ago when they stopped making it, and they won't recover politically until they do--and they may end up giving it to a resurgent third party instead.

So what does this encouraging shift in national politics have to do with Phyllis Wise, the recently resigned-fired-not fired-resigned chancellor of the University of Illinois at Urbana-Champaign?  She emblemized old-school corporate management that will keep a federal fix away.

There has been plenty of coverage of the most recently turmoil in what has been a bad year for UI brass, culminating in Dr. Wise's resignation that became a firing that became a resignation again.  Corey Robin offers the definitive incredulous untangling of last week's events, in which Phyllis Wise resigned, had her resignation rejected by the Board so they could fire her, which led her to threaten them with further disclosure in an email that was followed by a second resignation letter, which this time was accepted. A sample of Prof. Robin's breakdown:
1. Salaita is hired but then is told, no, you’re not really hired, so that he can be fired. Wise is forced to resign, but then is told, no, you’re not really resigned, so that she can be fired. 
2. Wise complains that not only is she the victim of a university administration that puts politics above principles and reneges on its contracts with its employees—all true, by the way—but that such actions are also “unprecedented."
3. Suddenly, the UI Board of Trustees is concerned about contracts with its employees. . ..
Suffice to say that no chicken has ever come so accurately home to roost.

But the deeper problem is the overall practice of management revealed by the initial firing of Steven Salaita and the subsequent lawsuit, discovery, email publication, and initial court decision affirming most of the Salaita counts. When the Board found out about Steven Salaita's angry tweets about Israel's Gaza attack last summer, they became completely obsessed with one of the 120 people who were being appointed as professors in the UI system--an associate professor from Virginia Tech that had been hired into a program I doubt any of them had ever heard of before.  So there was the lack of an ability to maintain perspective, to set priorities, to decide what is important to the long-term health of the University and what is a side show.

Here we have a fiduciary body that is prone to impulsive politicization. Next, there's the will to intervention from above. The Board of Trustees translated a passionate conviction held by a small, powerful group into an overturning of an elaborately collaborative campus decision, in this case the hiring protocol that had been completed with an offer tended to Prof. Salaita and his acceptance of it.  In its move to dismiss his lawsuit, the University claimed that they had never entered into a valid contract with Prof. Salaita, so no abusive intervention was made. In his thorough rejection of this claim, Judge Leinenweber describes various kinds of language that could have made clear the contract was contingent on the board, none of which was used, and then notes that appointment power had been delegated to deans.  "If the deans had no authority to make any binding offers, the University would have been confused as to why 120 professors showed up to work when no one with actual authority had offered them a job" (19).

Similar judgments had been offered by a wide range of UIUC and other faculty a year ago, when the Board still had a chance to calm down and let the hire proceed. They ignored all of these.  This second problem is the Board digging into an oppositional relation toward its own university community and internal processes, and the third is the routine insistence that "no mistakes were made."

There's a further set of bad management practices revealed in Chancellor Wise's emails about Prof. Salaita.  There's the compulsive secrecy about the content and basis of deliberations and decisions, which are then routinely whitewashed in press releases.  This has become so common that we hardly notice it anymore, but it means that the larger community lacks the information that would allow it to come to an informed judgment, which is supposed to be the whole point of universities.  It also sinks executive groups into the epistemological blindness of their closed circle, which becomes inbred under pressure.

In the Salaita case, senior officials had agreed that he had in fact been hired, was joining the UIUC faculty, and should be subjected to an unpleasant tongue-lashing from Chancellor Wise when he arrived.  They sometime between 7:25 am and 1:55 pm on July 24, 2014, they undecided this and shifted to blocking an appointment they now claimed had never been made.  There seems to have been pressure from heavyweight donors that the UIUC administration failed to deflect--another management issue of a lack of independence towards outside interests that are increasingly plutocratic.

The decision must have seemed like a good idea at the time, but it meant suppressing the history of the administration's view that he was hired, which they had held as recently as that morning.  It meant running with an unconvincing rationale for unhiring Prof. Salaita that subjected them to widespread scorn and the campus to a national boycott, and all for nothing, since their position has now been thrown out of court.  What had happened, to quote from another context, was that "the intelligence and the facts were being fixed around the policy." The academic world sensed this at the time, but could not prove it, and it was endlessly denied in the administration's public relations campaign that has now been shown to be founded on a lie.  This has had very bad consequences for Steven Salaita, but also for the University of Illinois.  Complex organizations thrive or decline by trust and goodwill, which underwrite their powers of collaboration.

The Wise Affair may seem like an anomaly or a day at the office in the rough and tumble of state politics.  So Dr. Wise was trading Steven Salaita for Board chair Christopher Kennedy's support for her College of Medicine proposal, in John K. Wilson's valuable reading of the email record: what did you expect?

My point is that we have to expect much better.  We have to build better academic governance at the state level or the federal bailout will either never happen, or never work.  To do this, we'll have to face the fact that the CEO model has failed for universities: to invoke Thorstein Veblen's critique of business reason, the CEO must above all make the sale, and making the sale often requires hiding the truth.

You may think public universities have been muddling through pretty well with this marketing approach most of the time.  I'm sorry to say that you would be wrong.  Exhibit A is a quarter-century of declining public funding. Exhibit B is a long list of administrative sins that legislatures trot out to refuse meaningful restorations.  Nothing is more likely to block federal solutions than state government's deep distrust of senior university leaders.

University of Illinois folk have made good reform suggestions (eg. Kirstin Wilcox, Michael Rothberg, Martin F. Manalansan IV and Ellen Moodie), all of which involve something we thought we had-- an open university, freestyle discussion, and bottom-up forms of planning. These moves towards active governance by faculty and staff are as important as the public funding policy changes.  We won't get close even to the funding reforms of Hillary Clinton's unless we can get past the management model of Phyllis Wise.


Subversive Scribe said...

Ashland University Lays Off Tenured Faculty, Calls Financial Future 'Bright' : the destruction of
the university and the role of "senior managers" and their ideas on "future bright" should be your next topic :)

Bruce Rosenstock said...

Great post. An example of the financial stupidity of our administrators is the fact that Wise refused to listen to the criticism leveled against her pet project, the Carle Illinois School of Medicine, by Professor Jeffrey Brown. Brown, a nationally respect economist who field of research includes university finances, has just stepped into the role of Dean of the College of Business. Hopefully, his ideas about the proper use of endowment funds, transparency in budget, and shared governance (mind you, he is no union backer, but still ...) will get some hearing.

Brian Riley said...

I'm sure you remember, Chris, that the California state government decided on a whopping 32% increase in the University California's budget for the 1984-1985 academic year, to make up for cuts that had accrued until that point. So there has been a precedent set for making up for lost ground through very large budget increases.


It's a shame that the states can't get their acts together without federal prodding, especially in our case in California, since there was a super-majority in the legislature for a while in 2013 that could have restored/re-funded the UC system had it made up its mind to do so.

Any why is it that it took a conservative governor in 1983 to propose making the 32-percent UC budget increase to the legislature? And why was it that many of the cuts that had been prior to that point had occurred during the period of Jerry Brown's first two terms as governor, from 1975 to 1983? What gives?

Chris Newfield said...

@Bruce Rosenstock Is there anything I can read about this? My working assumption is that any admin that starts a College of Medicine is putting their ego ahead of solvency

Chris Newfield said...

@Brian Riley Jerry Brown is the original austerity Democrat, the intellectual godfather of Bill Clinton, fountainhead of all Democratic Leadership Council third way visions. But it's not just him. The Dems have worked within the Republican framework for decades and are defensive and without big ideas. "Winner-Take All Politics" lays out the history quite well

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