I. On higher education, he recommends a proposal for a $10,000 degree, written by Anya Kamenetz. She concludes,

Making college affordable—without loans—by stripping it of its perks, refocusing the mission on education, using new technology in a blended learning model, and cutting administrative costs could be one of the most important economic boons for the middle class and the poor. Graduating students with massive debt—and even worse, failing to graduate students who acquire massive debt—is the worst way to start young people toward meaningful and productive lives. Change is hard, but colleges need to do so to fulfill their mission of preparing subsequent generations to succeed.

If you’re so smart, why aren’t you an entrepreneur? That is, what is stopping someone from starting a college like this and making a killing? Some possibilities:

1. The credentials cartel is too strong. You cannot get accreditation unless you waste a lot of money on admin, old-fashioned teaching methods, and non-educational resources.

2. The consumers are too stupid. Students will not to go low-cost, efficient schools. They would rather run up big debts an high-cost, inefficient schools.

3. Entrepreneurs are stupid. Only policy wonks can come with ideas like this.

I have to say that I really get annoyed when policy wonks write as if the answer is (3). The whole Obamacare thingy fits in that category. If health insurance exchanges are the answer to affordable health insurance, what was stopping entrepreneurs from creating them? (And if your answer is “moral hazard,” your assignment is to read David Hogberg’s essay, which describes the logic of paying the fine until you get sick under Obamacare) What is it that is stopping insurance companies from compensating doctors on the basis of outcomes rather than procedures, if that is so great?

II. On poverty programs for an Average is Over world, he recommends an article by Oren Cass, who writes,

Rather than have numerous federal agencies each administer numerous programs, the federal government would ideally have a single agency apply a formula, establish the year’s lump-sum payment for each state, and transfer the funds. Call it the Flex Fund. States happy with the existing funding allocations and program structures could continue to apply the funding as they do today. But states with better ideas—even radically different ones—would be free to pursue them.

Also,

An adjustment in benefit types offers the best opportunity to incentivize work without slashing benefits or increasing spending. Two families—one whose head of household works, one whose head of household does not—may both need $3,000 worth of nutritional support. But if the non-working household receives the $3,000 in food stamps while the working household receives it as cash via a wage subsidy, the latter might feel substantially better off. While the Affordable Care Act draws an arbitrary line, providing Medicaid to those below 138 percent of the poverty line and a subsidy for private insurance to those above 138 percent of the poverty line, the benefit could instead be provided as Medicaid for those who do not work and, for those who do work, as additional cash provided via wage subsidy.

Changing some income-support programs to wage subsidies sounds like a good idea to me. The Flex Fund I’mm no so sure about. Many wonks have thought in terms of replacing food stamps, Medicaid, and the rest with a simple cash assistance program. Cass is suggesting replacing all the Federal programs with a state program. Will the states make fewer mistakes with the money than individual poor people? My guess is “no.” Also, if the money comes from the Federal government, how strong is the incentive for states to use it well? If a state puts together an inefficient transfer system, funded by the Feds, how much will voters care?