A College Primer With Schiffian Logic

by Rick Green

Recently by Peter Schiff: Job Losses Demystified

Not long ago I got into it with the YouTube investment wizard and U.S. Senate candidate Peter Schiff over college loans and the ever-increasing price of tuition.

The impish Schiff – who predicted the current economic collapse – hit me with a simple explanation to a question I cannot find an answer for: It's the government's fault for handing out so much money through loans and grants.

No government bailout, Schiffian logic goes, no inflated tuition.

"College should not be so expensive. It's the biggest recession since the Great Depression. How could college prices go up?" Schiff asked me when we talked after our dust-up on WFSB's "Face the State."

I didn't have a reply. I still believe that we need more college-educated workers for the new economy, whenever we figure out what that is. But it's worth listening to Schiff if only because every other explanation is so lame.

The fact that I couldn't get a couple of prominent university leaders to talk didn't help. The presidents of Wesleyan and UConn wouldn't touch this topic when I requested a chat.

"Unfortunately, it is one of those things that has a grain of truth to it," said Patrick Callan, president of the National Center for Public and Higher Education, when I bounced Shiff's argument off him. "We used to deny it was even a good question. We don't do that anymore."

Schiff, as his zealous followers can recite, believes that the free market is the antidote for nearly everything. I don't quite agree, but I don't have a BMW with a driver, either.

"If kids could not borrow money to go to school, they could not pay these prices. Nobody would be going," Schiff said. "Would the colleges really just shut down and say we have no business?"

"Even if they did go bankrupt, somebody else would come in and buy that university and operate it at a much lower cost," he explained. "Colleges will react quickly to a drop in enrollment. What they are going to have to do is go over their books and figure out who can we cut and how can we streamline this process. You should probably have minimal staff at a university. It should be very, very efficient."

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November 18, 2009

Peter Schiff is president of Euro Pacific Capital and author of The Little Book of Bull Moves in Bear Markets and Crash Proof: How to Profit from the Coming Economic Collapse.

Copyright © 2009 Hartford Courant

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