Get a load of this economic reasoning from Peter Orszag, Obama’s first Director of the Office of Management and Budget and current vice chairman at megabank Citigroup:
More graduates would mean lower inequality, because the wage premium for a college degree would be reduced by the additional supply. And it would mean higher national income, because better-educated workers are, on average, more productive.
So, lowering the “wage premium” means that income for college graduates will go down with more of them in the job market. This is a good thing according to Orszag because reducing the value of a college degree will have a leveling effect on incomes (in a downward direction, of course).
On the bright side, it’s a remarkably honest admission about everything that’s wrong with the analysis of people who obsess over economic inequality. In this worldview, government policies that devalue education and distort the labor market should be praised if it means less people have an opportunity to be rewarded for superior ability.
Thus, while Orszag’s analysis doesn’t square with the diminished aspirations of millions of under- and unemployed college graduates in the Age of Obama, it does help explain why his former boss isn’t putting any muscle behind addressing the depressed job market. In Obama World, so long as more people make the same – even if it’s less – everything is just fine.