Mitch Daniels explains the link between college affordability and economic growth.
READ FULL TRANSCRIPT
I’m Alexander Heffner, your host on The Open Mind. Conservative intellectuals from William F. Buckley Jr. to Milton Friedman have graced this broadcast in its ongoing exploration of public innovators and their ideas. Descending from their world views’, our guest today, former two-term Indiana governor whom the Republic party desperately wanted as its Presidential nominee in 2012. Mitch Daniels forewent what he detests as the increasingly poisonous national political scene.
Instead, Governor Daniels doubled down on his and Indiana’s success story of fiscally responsible investment in education. Becoming the twelfth president of Purdue University, the state’s prestigious flagship. Today we’ll probe with President Daniels, the politics of education policy and his own achievements at Purdue. A tuition freeze amid record student loan debt, the establishment of a Gallup-Purdue index to account for the true value of a college degree and a vast acceleration in research. No doubt Daniels is governing Purdue with his trademark grow or else strategy. His commitment to free enterprise and free speech too — and his reputation as the fiscal blade. So here’s my first question to President Daniels, Governor Daniels, how can he prevent what he laments as the savagery of our politics from infecting the college commons, and welcome to you, sir.
DANIELS: Why thank you, it’s an honor to be here. This, this program has such a proud history. I’m, I’m proud to just have a small part in it. Uh, you say I detest—I guess I, I’d say deplore the, the state of play in, uh, in, uh, our national conversation. Not just because it’s, uh, distasteful and, uh, but more because it’s, it’s preventing, at least for the moment, our dealing with some really, very large problems, national problems, … we can return to that if you like. But I’m sad to say that at least on too many campuses, the, there are too many similarities… to, … highly strident and intolerant, uh, mode of thinking and speech. In fact, and to some, in too many places, … that, is compounded by a … an enforced conformity of thought. Which is, doubly regrettable because that’s the antithesis of, what we thought university, what we believe universities are there for.
HEFFNER: Is this an illiberal liberalism that you depict?
DANIELS: Certainly, we have seen this in, in far too many places. Highly ironic again that, uh, that the university, uh, which, which should be, uh, the, uh, haven for, uh, non-conformist thought and for free and open debate of ideas in too many places you find people shot it down or, uh, disinvited as, uh, we’ve, we’ve seen recently. I hope that, uh, some of the excesses of that now have, uh, uh, led to some, …, movement back toward, uh, the free discourse that, that we ought to be, so jealously protecting.
HEFFNER: From the statehouse to the President’s office at Purdue, you’ve managed to erect an, an insurmountable support system for higher ed. How have you accomplished that as a fiscal disciplinarian?
DANIELS: Oh I don’t know if I’d claim, uh, quite that. Although I think—
HEFFNER: Claim what?
DANIELS: That, that we have, uh, done all that could be done or that it’s, it’s somehow—
HEFFNER: But you’ve managed a tuition freeze.
HEFFNER: Continued support for investment. But you preach, stridently, steadfastly, fiscal soundness.
HEFFNER: How, how do those comport?
DANIELS: I don’t think you have one without the other. Whether we’re talking about the, the public space, uh, the, the area in which I served, uh, all of Indiana or the University. Uh, ultimately, you can’t outspend your income and not come to grief at some point. When you do that, sooner or later you will penalize investment in the future when this money runs out. And uh, so, uh, to me the first fiduciary duty in either job… is to try to make certain that the, that the, uh, uh, endeavor is on a sound, uh, uh, fiscal footing, uh, and the, that, where, where necessary choices are made and priorities are set, … and then from there to an invest aggressively and, and try to move the place, … forward. But to do so in a way that’s, that’s responsible, doesn’t steal from the future and leave, a, an unmanageable situation to whoever comes next.
HEFFNER: But in, in, in practical terms, how are you able to do that?
DANIELS: Uh, uh, a lot has to do with simply drawing lines. You know, … there’s a lot of virtue in, in, in, uh, barriers that can’t be easily, uh, can’t be evaded. In business, if the, if your sales go flat, suddenly people sharpen their pencil and begin to be a little more careful, uh, on the expensive side. Likewise, in governments, a lot of virtue in, uh, constitutional limits, balanced budget requirements. Something like that, uh, forces, uh, people to, uh, make the tough choices that might, especially politicians might rather duck. And, uh, so a, a tuition freeze, uh, I thought there were multiple reasons to do it. Our university is committed to accessibility. Land Grant schools like ours were put there by Abe Lincoln and his allies to throw open the gates of higher ed – beyond the elite. A few, uh, but in addition, uh, uh. I did think that having at least a one year time out, now we’ve managed to extend it four years so far, would cause people to, uh, be a little more careful and to come up with ideas, … for ways to spend dollars more carefully that they might otherwise postpone.
HEFFNER: How do you explain a harmonious outcome that other states ought to emulate?
DANIELS: Well we don’t preach to anyone else what we think is right for Purdue University and for our students and their families may or may not be the right reason for others. But I will just say that, um, uh, we, we feel a profound duty to be an accessible and affordable university. We’ve, in addition to tuition, we brought down the cost of room and board, two steps. We brought down the cost of textbooks. And the total cost of attendance is lower now than it was two years ago. That’s not happened before.
Uh, meanwhile we are investing in, uh, what we believe is already one of the highest quality educations anywhere. We think that’s responsible, certainly to our, uh, students and their families and to the tax payers of Indiana who still support us in a large way.
HEFFNER: And you want there to be a financial and societal payoff. I, I gather that’s why you’ve created this new index.
DANIELS: We created the Gallup-Purdue Index, uh, because, um, uh, and I believe and it turned out Gallup… agreed. And that, uh, uh, higher education, I was gonna have, was, was, uh, at the end of the “Take our Word for It” era.
If you ask yourself why it cost so darn much, there are multiple reasons but part of it was that, in the absence of other proof, uh, other evidence, people had nothing to go on except maybe the sticker price and, and, uh, associated for a long time, a higher price, must be a better education. There’s really no correlation at all when you get into it. So the idea was, that, that the public, uh, uh, that, uh, legislatures and others were gonna start, uh, requesting proof of outcome, proof of efficacy. And, uh, Gallup-Purdue, uh, sets the stage by, uh, creating this massive, benchmark of college graduates off all kinds, from all kinds of schools and all places. And then schools, who wished to, Purdue was first, can measure their own graduates and compare. And now we can say with authority what we used to believe but couldn’t prove. Namely, that Purdue’s graduates do, do far better in each of the domains Gallup measures, than, uh, than the average college grad.
HEFFNER: Is it also an effort to ensure a wary American public that in fact, as you said in recent commencement speech, it is worth it.
DANIELS: I think so. I mean, the facts will be what the facts are. Uh, I don’t have any doubt, by the way, that measurements, uh, uh, like, like the Gallup-Purdue, uh, will validate a college education for today’s adults and those well-along in their careers was a very good investment. But that was then and this is now. And I, I, uh, uh, uh do not, uh, use as many of my colleagues do, that to justify today’s tuition and today’s quality. Uh, it’s not necessarily predictive of what today’s 20 and 24 year olds, uh, will experience through their lifetime. And, uh, uh, for that, I think we all have a lot of work to do to make certain that there’s, uh, enough substance, enough rigor in the, uh, teaching and in the education compared to the cost that, uh, that what is true for today’s graduates will be true 20 and 30 years from now.
HEFFNER: How can you, as Purdue University President and your peer presidents combat the towering student debt.
DANIELS: Well, it starts with cost. You know, debt at Purdue. And we’ve only been at this…
HEFFNER: So the tuition freeze.
DANIELS: And, and the other cost of attendance that we, we can work all corners of that. Um, uh, total debt of our last graduating class was down 18 percent. It’s 40 million dollars they didn’t have to borrow. …If, if viewed another way, uh, if, if our, if we had raised tuition at, uh, the national average, … for these, uh, couple years. Our students and their families would have paid Purdue 50 million dollars more than they had to. So that’s the starting point.
DANIELS: Uh, they’re, they’re needs to be, we’ve done a lot of advising and counseling. Too many students have rather thoughtlessly taken on debt they didn’t need to. And, uh, just being more careful about that is a large part of it. And then of course, the, the rest has to do with delivering an education which, uh, uh, enables a student to pay back anything that she or he did, uh, borrow. We think, uh, that the, uh, maybe the single best indicator to keep our eye on is the default rate. And if you graduate from Purdue University—this would be true of a lot of schools—you are almost certain to be able to pay back, uh, whatever it was you borrowed. Um, but in some schools that’s not true and at most schools, if you start and don’t graduate, there’s, there’s the real problem. Then you have young people, uh, who don’t have the, uh, diploma and don’t have the learning that went with it, uh, but do have the debt.
HEFFNER: And what do you say to your students about the shrinking work force and, and our movement towards a metric driven economy that would seem to undermine the potential for employment opportunities.
DANIELS: Well we’d all ought to be very bothered by the high unemployment among, uh, young people today. Even among college graduates by some measures. Uh, uh, half or so of recent graduates unemployed or underemployed. When I meet the, the parents of freshman touring our campus, often, I’ll say, you know, our, our objective at Purdue University is if your young, uh, youngster, uh, comes here and, and applies himself or herself, uh, they won’t move back in your basement. I’ll, I’ll generally generates, uh, applause because it’s happening in far too many, uh, cases.
HEFFNER: That was a, a line in, uh, Governor Romney’s campaign and, uh, you identify in your State of the State and subsequently in your State of the Union response that things were moving in the wrong direction. Do you think that the façade of deceased unemployment that we see from the Bureau of Labor Statistics is just that in light of what you’re saying, that there is a morbidly obese problem to use, to use your term with youth unemployment.
DANIELS: Uh, yeah, I don’t know, I don’t think anybody, especially those, uh, uh who are, uh, who are young today or who are parents of the young or just who care about the young, can be at all complacent about this economy. This has been, uh, the weakest recovery from a recession we’ve seen in the, uh, in the modern era. Uh, and it’s been especially hard on young people. As we’ve already our mentioned, they are unemployed and underemployed even if they have college degrees at a stunning, uh, rate. Many of those who are employed are employed part-time or on a temporary basis. Uh, and more broadly, uh, we have already dumped, we’re talking about student debt, but which is a huge problem. But every young person whether they go to college or not, whether they took a student loan or not – is inheriting a mountain of national debt which we their elders have run up for them, very inequitable, uh, uh, and, uh, ultimately we’re very, very, uh, damaging, uh, to their future. So uh, yes, I think we have a serious generational, uh, equity question in the country that our national leadership in both parties has failed to, uh, uh, even be, uh, honest about, let alone address, uh, effectively.
HEFFNER: That’s what you characterize as a red menace, the blossoming debt. You said here in 2012 in that response, “…the President did not cause the economic and fiscal crises that continue in America tonight, but he was elected on a promise to fix them. And he can’t claim that the last three years have made things anything but worse…” You still believe that?
DANIELS: I do. I do.
HEFFNER: In light of the fact that we’re not getting the full story when we read those employment estimates…
DANIELS: We have a very troubling, uh, economy today, uh, with deep problems that, uh, uh, the unemployment rate, uh, does not begin to, … address. You know, if you look at the employment rate, the so-called participation rate. It’s, it’s, it’s as low as it was in the days of the stay at home moms. And so they don’t have people working is what really matters. And uh, that is not encouraging either, not to mention these problems you correctly point out. We’re counting part-time people. We’re counting temporary people. We’re counting people in very low age, low wage, uh, jobs. And so we, we got a lot of growing to do particularly if today’s young people are gonna somehow be able to shoulder the debts that, uh, their elders have, uh, run up for ’em.
HEFFNER: What is that growth? Is it a political capitol? Now that you’re in the education sector, is it a willingness on the part of university presidents to challenge the status quo?
DANIELS: Well, each president will have to decide. And it’s not really our, our job. I, I try to be very careful, uh, and, and confine myself on—… as I think we’re doing here to those subjects which do bear directly on higher education or on the, uh, young people who are, uh, our, uh, on our campuses. Uh, but I’ll give you an example. The, the heart of our long-term, I believe, uh, existential, danger as a society in our, in our debts, those that we have, those that we’ve scheduled for the near future. And, uh, uh, the heart of those is the so-called auto, automatic entitlement programs. Uh, swallowing the budget. They are crowding out spending on higher education. They are definitely crowding out spending on basic research of the kind we need. Not just for our universities to thrive but for our economy to continue innovating and leading. So I don’t, I, I think it’s appropriate, each president can decide for herself, himself. Uh, that, that we, uh, be heard from on subjects like that.
HEFFNER: You are the perfect intellectual spokesperson for this populist, uh, environment in which our politics resides today.
DANIELS: I wouldn’t—I never used and I wouldn’t use it, today, the term populist necessarily to define what we were doing. Too, too often that, uh, connotes, uh, a divisiveness, uh, you know, a, uh, a deep suspicion of, of establishments and so forth. I always try to talk the language of common, uh, objectives.
Now, economic growth in Indiana then, in our nation today for that matter, to me, ought to be our number one priority. I, I really don’t have much regard for those who lament inequality or the problems of the poor…on Monday, Wednesday, and Friday and on Tuesday, Thursday, and Saturday are busy stopping everything that might unleash the growth potential of this economy who are for more and more massive regulations and taxation and so forth. There’s, that’s a legitimate point of view. But don’t talk to me then about poor people or about income inequality because you’re, you’re standing in its, in its way. So we—
HEFFNER: What is, what is, what is the hypocrisy there? When you say that.
DANIELS: Yeah. There’s no way to, uh, uh, have the economic opportunity, the upward mobility, uh, that we’ve always prized in America and there’s no way to keep that going at today’s growth rates, one and two percent. You know, let alone pay these bills I keep, uh, you know, ranting about here. And so, what I’m, what I’m—point I’m trying to make is that, uh, I always argued for, for our, uh, policies in Indiana. And, and I, I think one can argue for, for parallel policies nationally. Always from the standpoint of the yet to haves in America. You know, I, I don’t, I don’t accept the have, have-not, uh, uh, dichotomy. The differences between haves and those who, uh, are yet to have, we want, they should be our first focus.
I used to give speeches all the time in, in front of, you know, successful audiences and so forth. And I say, Well, we’re proud. Thank you all for being here, we’re very proud of all you accomplished. But let’s don’t forget that, uh, our concern is not about the people in this room. It’s about the people who would like to buy a ticket to an event like this, who would like to one day, you know, if it’s their choice, come to rooms like this. Now, the, I don’t know a way to get to that outcome at one and two percent growth rates. Uh, and, uh, I think a genuine heart for low income people or for those students who would like to be able to afford to come to a school like ours right now, requires one at this moment in our history at least, to, I sometimes say, call all the close ones, break all the ties in favor of economic growth. But far too many people, uh, uh, take a very, uh, contrary point of view and, uh, seem to oppose almost anything that might unleash it.
HEFFNER: You, you said here, um, in, in your exploration of the contemporary political landscape … the formidable difficulties of renewing the democratic spirit, in some sense, of national unity, our compounded by the poisonous nature to which our national discourse has descended… Powerful words. How do you bridge the divide in that toxic…
HEFFNER: … environment today.
DANIELS: Uh, well I, I would like to believe, I think I can assert that we did this in one state. I don’t know that ,… at, at the, that a level up, nationally, that it can work. I mean, I, uh, said from the very outset, uh, I can remember making a statement in the first campaign I ever was involved in as a primary, contestant primary, uh, that, uh, I, uh, I was, uh, I remember saying that, uh, the first office I’ve ever run for, I want you to know before the voting that there’s some things I won’t do to, to win it. And the first of those was to attack anyone’s motives or, uh, background, uh, or, uh, integrity. And we didn’t do it. And you know, I’ll tell you this, along the way, so there were three campaigns counting that primary. Many, many times I would point out to people, I’d say, you know, one thing I, I’m happy about is that, uh, we have never made a negative commercial. We’ve never attacked anybody, personally, or anything even close to it. People would always applaud. And so, you know, the, the political mercenary class that makes these things, uh, will always say, “Well just, that’s what works and you’re a fool if you don’t do it.”
I can’t say they’re wrong nationally. That, that world, that has become more and more of a jungle. But, uh, uh, we, uh, in any event, uh, confined ourselves to explaining, uh, uh, really, we always said, let’s campaign to govern, not just to win. And that meant, uh, in the main, laying out ideas if, you know, uh, I said, we’ll play the, let’s play with the cards face-up. If you vote for us and we’re elected, we’re gonna do some big things. We’re gonna try some new things in this state. You deserve to know that now. And that was, that worked out alright. But I, I can’t tell you for sure that it would in any other place or, uh, certainly not at the, at another level.
HEFFNER: You’re at the helm of a major university. And you’re honest about the economic scenario. But you’re also very cognizant of the impact you’re having on a day-to-day basis.
HEFFNER: These students, and, and I’m wondering in the potential of these students with whom you see regularly, what’s, what’s your hope that they’ll carry forward from Purdue?
DANIELS: Oh, I have, I have every confidence in the young people I see on our campus. Uh, they’re gonna succeed professionally. Again, ours a tough school, hard school to get a good grade in. Sat out this phenomenon which the, they call, uh, grade inflation. And, uh, uh, and I tell our students, be glad of that. When you leave Purdue University with a degree, the world’s gonna know you, you learned something and you earned it. Uh, no I’m very confident in them and, and, and in the, their generation, uh, uh, as in, as a whole.
No, I’m, uh, my, my concerns are basically with the world we have built for them or are leaving to them. And, uh, those of us who still have a little time to affect that I hope will do so. Uh, uh, otherwise, uh, in our last years, uh, we will have to admit that, that, uh, we did not do right by the next generation, that we didn’t give them the, uh, opportunities that they, uh, deserved.
HEFFNER: And what’s the first order, as we conclude here, in averting this apocalypse that so many are concerned about when they think about both our political system and higher education.
DANIELS: Again, I think it has to start with a, with a commitment to, that economic—everything else depends on economic growth—including for instance, environmental protection. Poor countries are never green. Uh, you know, it, it’s our wealth that has enabled us to have the new technologies and the, and the new, uh, you know, uh, buy the cleaner cars and all those sorts of things. And so, understanding that the hopes and aspirations of low-income people, of new Americans who have, uh, uh, want to come here and pursue a better life has to be to commit to that as our first priority. And too often, in recent years, it has not been. Uh, we, secondly, we simply have to face the fact that we cannot keep the promises made in the past, the irresponsible promises, uh, of the entitlement programs. And we oughta concentrate those programs on the people who are going to need the money. Uh, and, uh, and, and, uh, uh, rationalize them at least enough that they don’t, uh, completely derail our, uh, our national economy in the future as they’re scheduled to now. And I think finally though to, uh, uh, importantly, but, but a little less, uh, tangibly, uh, we really have to start speaking, uh, uh, a language of, of, of inclusion and unity, uh, that’s, uh, for the moment at least, uh, been crowded out of our national debate. You know, we, we really will hang together or hang separately at some point as a nation. And uh, I hope that everyone … —folks in your profession, my new profession, certainly folks in our active public life – will think a little bit about the fact that if the real objective is to build a better America, uh, we’re gonna have to do this by addition, by, uh, bringing together, uh, people as opposed to cleaving lines, leaving fifty point one percent on one side. Uh, that’s not enough. You know, in Indiana, we, we did an awful lot of things people said could never be done or hadn’t imagined and the lesson I drew was big change requires big majorities and you, and you better try to find ways to bring people together if you wanna, if you wanna achieve that.
HEFFNER: We all need a little Hoosier in us, don’t we?
DANIELS: Well, we, we Hoosiers think there’s a lot, uh, there’s a few things that, that we have to share.
HEFFNER: Thank you, Mitch.
DANIELS: Enjoyed it, Alexander, thank you.
HEFFNER: And thanks to you in the audience, I hope you join us again next time for a thoughtful excursion into the world of ideas. Until then, keep an open mind. Please visit The Open Mind website at thirteen.org/openmind to view this program online or to access over 1,500 other Open Mind interviews. And do check us out on Twitter & Facebook at Open MindTV for updates on future programming.