With today's big higher ed speech, it's becoming clearer what President Obama's most important legacy may be: He could be the guy who finally stopped runaways costs for two of life's biggest necessities: healthcare and higher education.
This would be a big deal, because -- quite apart from issues of access and fairness -- the United States is putting itself at a global disadvantage by squandering so many resources on grossly overpriced services in both sectors.
The healthcare piece of this story is well known. The U.S. spends twice as much on healthcare as most other advanced countries, as measured by share of GDP -- while leaving tens of millions of people without coverage. That's a devastating weakness in a global economy where every nation needs to maximize how it uses it's national wealth. And while discussion of Obamacare typically focuses on its goal of expanding access, an equally crucial goal of the law is to control and lower healthcare costs.
Now Obama is taking on another American Achilles Heel: our terribly inefficient higher ed system.
It's routine for American leaders to crow about our global leadership in higher ed, with U.S. universities attracting students and researchers from around the world.
But while America's universities may still be ranked as the best in the world, our higher ed system as a whole is delivering increasingly poor results at ever higher costs.
Compared to other advanced countries, U.S. spending for post-secondary, or tertiary, education is off the charts. According to OECD data, the United States spent roughly twice as much per higher ed student in 2008 as such advanced countries as Australia, Germany, and the United Kingdom.
And yet OECD data also shows that the United States lags behind many of these countries in terms of the percentage of 25 to 34 year olds who have completed college. In fact, we now rank 16th globally on that indicator, a big falloff from the past. Even South Korea beats us in college attainment, while spending a third of what we do per student. Just a few decades ago, the U.S. ranked first in college attainment.
In short, we've been spending more but doing worse. And the closer you look at the U.S. higher ed system, the more it really does resemble our dysfunctional healthcare system. We pour huge amounts of money into the best universities and the best hospitals that money can buy, letting the market largely dictate how resources get allocated, while neglecting to pursue the greatest good for the greatest number.
That's where our Cost Containment President comes in. If Bush was famously the Credit Card President, slapping two wars and Medicare prescription coverage onto America's Amex, Obama is aiming to stabilize prices for two of the biggest ticket items around.
Will the president's new college cost plan work? Actually, I have no idea. All I can say is that I hope national defense is next.