Last week, President Obama signed an executive order taking aim at for-profit schools receiving taxpayer dollars for education programs for military members. By Friday, Rep. Jeff Miller, Chairman of the House Committee on Veterans’ Affairs, issued a statement on President Obama’s Executive Order, “Choice Is Not Dictated By Imperial Fiat.” This statement by Rep. Jeff Miller actually contains the sentence, “This Executive Order represents an unnecessary attack on the free market.”
Just to clarify the terms ’imperial fiat’ and ‘free market’, please note:
-Imperial Fiat refers to an arbitrary order issued by a king
-Free Market is a market where prices are determined by supply and demand
To put Rep. Jeff Miller’s statement in context, one of the for-profit schools that sparked the uproar of complaints is Bridgepoint Education and an overview of our government’s business with this corporation includes:
-received $40Million in 2011 Tuition assistance dollars (ie. taxpayer dollars),
-drop out rate for their associate’s degree students is 63.4% and for their bachelor’s degree students is 84.4%,
-2011 Lobbying Expenditure $3,626,792,
-Q1 2012 Campaign Contributions $251,799 (not counting individual contributions)
The dropout rate for the industry is in the single digits therefore the dropout rate for these schools is 50% above the industry standard. The investment of tax dollars last year to the top 6 for-profit schools was $230Million (not including GI Bill or MyCAA tax dollars). At a 50% higher dropout rate than the industry standard, we can calculate that approximately $115Million taxpayer dollars were spent on students that were recruited and then dropped out. These facts demonstrate that the taxpayers are losing, the students are losing, the members of Congress are winning and the corporations are winning. This is not what a free market looks like, although this arrangement does look familiar. This is what an aristocracy looks like.
Rep. Jeff Miller may have a point about an imperial fiat, but this decree certainly was not sanctioned on a free market. Understandably he is defending the aristocracy within which he represents a prominent place as the Chairman of the House Committee on Veterans’ Affairs. In fact, the congressman receives campaign donations from for-profit colleges and he doesn’t hold any positions on any committee that deals primarily with education. Even more interesting is that these supportive colleges are not in his state.
Our political system with the current campaign finance structure manipulates our economic system of free-market capitalism into an aristocracy. The perverse incentives and distorted motivations with this method of paying for election campaigns breeds corruption and waste. For those claiming that using taxpayer dollars to pay for elections is a waste of money, please take note that under our current system $115Million was spent for elections through this military education debacle alone. By changing the system and therefore the motivations, we can at least eliminate the need of our representatives to exchange favors for campaign donations.