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Aiming at the Suburbs and Hitting Higher Ed

Stanley Kurtz’s new book, Spreading the Wealth: How Obama Is Robbing the Suburbs to Pay for the Cities, is not likely to be a campus bestseller. Some 88 percent of contributions from faculty members to candidates in the 2008 presidential election went to Obama and estimates of the percent of voting faculty members who voted for him range from 80 to 92 percent. Though some of the ardor for Obama has cooled, he remains far and away more popular on campus than Mitt Romney. Moreover, books arguing that Obama is committed to leftist policies receive an especially chilly reception from the left-leaning professoriate. The storyline they generally prefer is that Obama is a pragmatic centrist.

Spreading the Wealth, however, bears directly on the economic prospects of higher education. Kurtz’s provocative thesis is that under bland-sounding labels such as “regionalism” and “Building One America,” Obama has laid the regulatory groundwork for curtailing the political autonomy and the economic vitality of the nation’s suburbs. He traces Obama’s animus against the suburbs back to his days as a community organizer and traces the community organizers Obama worked with in the 1980s and 1990s forward to their participation in White House meetings during Obama’s presidency. A principal figure in this is Mike Kruglik, a longtime community organizer who was one of Obama’s first bosses in Chicago in the 1980s, and who remains one of Obama’s close confidants and White House guests.

According to Kurtz, the “regionalists” have both a visceral dislike of the suburbs and a theory about why they are bad. The dislike takes the form of disdain for the supposed blandness, comfort, and conformity of middleclass life, and is, of course, a familiar part of the left’s critique of American consumerist culture. Obama puts it in his own words in his memoir, Dreams from My Father, where he denounces the companies and the people who had left the city behind:

The big manufacturers had opted for well-scrubbed suburban corridors, and not even Gandhi could have gotten them to relocate near [south Chicago] anytime soon.

Kurtz does nice work in tracing the theme in Obama’s writings of his growing rejection of that part of himself that identified with the comforts of the suburbs in favor of his studied commitment to urban grittiness.

The theory is also fairly familiar: The social and economic inequities suffered by inner-city blacks and other minority communities are traceable to white flight to the suburbs. The suburbs are, in their essence, enclaves of white privilege which effectively doom the people left behind in the cities to meager opportunities and economic hardship. The solution, in the Kruglik-Obama view of things, is to use federal clout to disestablish suburbia. Although this could take the form of outright annexation of some suburbs by nearby cities, the regionalists realize that such actions would be hugely controversial. The quieter, less controversial approach is to build political alliances and institutional connections that will effectively integrate inner ring suburbs with cities and leave outer ring suburbs isolated and vulnerable to further forms of expropriation.

Electoral Implications

Kurtz’s thesis can, of course, be dismissed as a conspiracy theory. Perhaps it is that, but only if you stretch the word “conspiracy” to encompass political programs that have been plainly stated and open to public view. It is not as if “regionalism” is a secret agenda. It has numerous spokesman and a long record of public exposition. It just hasn’t registered yet with the public as a serious White House theme.

This could change. After the 2008 presidential election, CNN reported that 50 percent of voters living in the suburbs voted for Obama (48 percent voted for McCain). A shift in support among suburbanites might be crucial this November.

But my goal here is not to follow each step of Kurtz’s exposition, or to recommend a candidate. Rather, I am interested in one point where his argument converges with a topic I’ve been following closely for the last year: the higher education bubble.

Pincers

The biggest question about the bubble is what will pop it. The incredibly high prices colleges and universities are charging for undergraduate-degree programs combined with the rapidly decreasing cachet of the baccalaureate degree, high rates of underemployment among college graduates, and the insupportable levels of student-loan debt make a “market adjustment” unavoidable.

I have argued that among the factors most likely to precipitate the crash is the disaffection of families earning over $100,000 a year. Many of these families have seen the value of their home equity fall but have, with hard effort, kept their noses above water during the recession. The income bracket of $100,000 to $250,000—called “HENRYs” in marketing parlance, for High Earners who are Not Rich Yet—are a key sector for colleges and universities. These are the folks who borrow to the hilt to afford overpriced college tuitions. The bracket above the HENRYs, those earning over $250,000, are another key to higher-education finance. There are only about two million such families, but they are the top-end consumers of expensive colleges. Their willingness to pay top dollar is what signals to the HENRYs that the tuitions must be worth it.

These high income families—$100,000 and above—are concentrated in the suburbs. I have already written (Helium, Part 2) on the likelihood that these families will be forced to rethink their longstanding assumptions about the value of expensive colleges in light of the huge tax increases set to kick in after the 2012 presidential election. In the “ecology of higher education,” we are about to see what happens when we torch the canopy.

Kurtz’s book suggests that the assault on the HENRYs and the $250 K plus crowd goes beyond income and capital-gains taxes. We are in an era of emergent policy aimed at deconstructing what makes the suburbs attractive to the affluent. The “regionalists” advocate something called “regional tax base sharing,” which essentially means using state legislative power to take tax receipts from the suburbs to pay for services in the cities. The suburbanites will be faced with the unpleasant choice between lower levels of service for their own communities or raising their own taxes still higher to make up for the money they will “share” with their urban neighbors.

The regionalists’ proposals are mostly but not entirely financial. Regionalists also think, for example, that we can improve urban schools by imposing policies that force suburban schools to relinquish their autonomy. And they hope to impose further costs and restrictions on drivers to herd suburbanites to mass transportation.

These are matters that faculty members, even those who enjoy life on campuses idyllically tucked away in verdant suburbs, will probably weigh lightly. But the regionalists are, in effect, working hard to diminish the attractions of the communities that form the social base for the prestige-oriented upscale colleges and universities that have for the last sixty or seventy years defined the aspirational goals of the American middle class. The war on the suburbs combined with the large increase in the tax burden may be the pincers that pop the bubble.

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