Former Obama economic guru, Peter Orszag
Orszag in LaLaLand
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A recent column in Newsmax penned by former Obama economic guru, Peter Orszag, attempted to make the case that economic growth in America could be speeded up by simply increasing the number of college grads. Try telling that to the poor schmucks holding an advanced degree and owing over $100,000 in student loans, but unable to find gainful employment.
Orszag’s argument is so convoluted that it defies logic and goes a long way toward explaining President Obama’s Alice-in-Wonderland economic policies. For openers, Orszag cites the rapid growth in the number of Americans with college degrees between 1960 and 1985, as graduation rates more than doubled during those years and presumably spurred economic growth. He then cites a corresponding abatement in graduation rates over the past 30 years, showing the number of graduates increasing by a mere 50%, and offers the opinion that said reduction in the rate of graduates has “exacerbated inequality and crimped growth.”
In point of fact, the slowdown in the number of individuals graduating from college has very little to do with inequality and even less with reduced growth. It’s very likely the other way around. Most, if not all the poverty and inequality can be directly ascribed to government policies over the past three presidencies, with the biggest and most significant economic decline directly ascribable to the current occupant of the White House.
Undeterred, Orszag calls for a doubling down student aid to make it financially easier for individuals to attend college. He cites a plethora of evidence, including studies by Harvard and Stanford types that support the position that if it’s easier to get financial aid for college, more people will attend. D’uh! And if you walk in the rain without an umbrella your hair will get wet.
Orszag was director of the Office of Management and Budget during the first Obama administration and is now vice chairman of corporate investment banking at Citigroup Inc. It’s clear that his job with Citigroup is more because of his political connections than his intellect. When taking into account that federal debt has gone from $10 trillion to $17.5 trillion between fiscal 2008 and fiscal 2013, an increase of 75%, it pretty much makes anything Orszag has to say questionable, particularly in light of the fact that the Obama Administration is the first administration that’s ever worked without a budget.
Increasing economic growth by increasing the number of college grads is yet another of those questionable opinions borne of individuals who are clueless. Orszag clearly has mixed up his cause with his effect. The reason there was such a steep increase in college grads between 1960 and 1985 is because the economy could absorb an increased number of grads with meaningful jobs. The reduced percentage of college grads could be ascribed to any number of other reasons, not the least of which is that the economy has been in the toilet for over 5 years.
While I doubt that anyone will take Orszag’s article seriously, it certainly illustrates the mindset of those responsible for what passes today as government economic policy.