I hinted at it in my last post, but have addressed it in more depth in my column this week at Forbes. A brief excerpt:
The theme from all these failures is distorted signals and corrupted communication. People, no matter how savvy, cannot possibly research every nook and cranny of the economy before making an investment. They make decisions, therefore, based on signals – prices, interest rates, perceived risks, and the profit history of other similar investments. If these signals are artificially altered or corrupted, bad decisions that destroy wealth and growth will result.
Which brings me back to education. I will tell you something almost every business owner knows: We business owners may whine from time to time that banks won’t lend us money, but what really is in short support are great people. Nothing has more long-term impact on an economy than amount and types of skills that are sought by future workers. That is why everyone accepts as a truism that education is critical to economic health.
Unfortunately, there is good evidence that our education policies have already done long-term harm. The signals we send to kids making their higher education plans have disconnected them from reality in a number of fundamental ways, causing them to make bad decisions for themselves and the broader economy.
Examples follow. Read it all.