Simple Economics Too Complicated for Lou Dobbs?

I walked past a television at the hospital today, and Lou Dobbs was bemoaning that families could no longer afford college, though I’m sure his can. It seems to me that college tuition has always been expensive. There are many within living memory who were the first in their families to attend college. But it also seems to me as a naive observer that the explanation for the sharp increase in tuition costs over the past 20 years is relatively simple: demand exceeds supply. Why demand exceeds supply is a different question, but, again, I think that’s relatively simple: demand is increased by employers asking for college degrees because of the deflated value of a high school diploma — people think they need a college degree to get a good job — and supply is constrained by the accreditation process.

I think the same applies to health care costs, but think that the difference there is in the treatment of health insurance as a third-party payor rather than as a means to reduce one’s own risk.

In both cases, I do agree that they may be of great concern to voters — at least to those who also happen to be journalists — but I don’t think that a $500 Pell grant will significantly reduce the cost of a $40,000 tuition, nor that requiring health insurance for all citizens will reduce the demand for an over-priced good. Nor, even, that either is any business of the Federal government.