The Power of a Deputy Under Secretary
19th May 2010
From a New York Times brief on the departure of a deputy under secretary at the federal department of education: “Mr. Shireman has been seen as such an important figure in the department’s effort to regulate for-profit higher education that the word of his departure, late Monday, caused stocks of the publicly traded higher education companies to soar.” Is this really the kind of country we want? When the news of the departure of not an elected president, not a cabinet secretary, not an under secretary, but a bureacrat with the title of deputy under secretary is enough to affect hundreds of millions of dollars of the valuations of publicly traded companies?
Does the underlying value of the education these companies are providing students change this much, this fast, depending on whether Mr. Shireman is or isn’t the deputy under secretary of education? No, the courses and teachers and requirements are all the same. But the government has the power to affect the perceived value of the education in the marketplace for degree-holders, and it controls the financing levers through student loans. What an amazing illustration of the power of government to destroy value by threatening regulation or to create it by leaving a business alone.