In 2009 I was invited to speak to the annual meeting of a mid-sized accounting firm in Florida. Of course, the big topic of conversation was the housing bubble and the financial crisis which resulted. The audience, with the exception of one liberal academic, was generally sympathetic to the message that government, not the market, was the principle malefactor. And since the audience was made up of working accountants who had to live under the whims of federal regulators, they were more than sympathetic to the view, which had not yet been widely accepted, that the mark-to-market accounting regulations were a major factor in the disaster.
My wife, Susan, signaled from the back of the room that it was time to go lest we miss our flight. As I thanked my host and worked my way towards the back of the room to exit, questions kept coming from the audience, and I answered on the fly as well as I could. Just before I walked through the door there was one more question: “Okay, I get what happened with the housing bubble, but what’s the next bubble?” Silence, people leaning in with ears perked to hear the answer, and me not sure…autos, commercial real estate, commodities had been the leading candidates for next bubble in the financial press. None of that seemed quite right, though. They really wanted to know, and I wasn’t sure of the answer, so I said a quick prayer for an answer and out of my mouth popped “Higher Ed. There’s a College Bubble.” Shocked looks, murmurs, concerned looks. I didn’t know it at the time but the firm had an unusual number of higher education clients.
Since then, the College Bubble hypothesis has slowly gained acceptance. I wrote a number of pieces on the topic here starting in 2010 and most recently focusing particularly on seminaries. The Center for College Affordability is a think tank which has been largely dedicated to this topic long before I took it up.
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