Hey look! A Justice Department investigation that wasn’t interfered with!

“Every year, hundreds of thousands of hard-working, talented students strive for admission to elite schools. As every parent knows, these students work harder and harder every year in a system that appears to grow more and more competitive every year. And that system is a zero-sum game. For every student admitted through fraud, an honest, genuinely talented student was rejected.”—United States Attorney Andrew Lelling, Operation Varsity Blues press conference

One of my favorite Chicago jokes is: “You know how you know someone went to Northwestern? They’ll tell you.”

I went to Northwestern. My parents couldn’t have afforded it then, and probably couldn’t manage it now. I wasn’t getting in on anything I could bring financially to the university. About the only way I could have gotten in NU’s prestigious Medill School of Journalism was ace the application, which I did by writing about the wisdom teeth I just got pulled. Oh, and rely on my high grades and school newspaper awards. Oh, also, I got an 800 on the word portion of the SAT, and journalism schools like words (and didn’t care about my vastly less impressive math score). I had a good profile, you see. People trying to get in to Medill would have wanted to look a lot like me. At the time I couldn’t perceive this, of course. To me, only I looked like me.

If parents are rich and dishonest enough, though, their kids could be made to look exactly like me. The FBI’s Operation Varsity Blues, the second most talked-about scandal of the year (behind everything Trump), ensnared 50 parents, coaches, administrators, and criminals in a bribery and manipulation scam on behalf of rich kids who did not have the right profiles to get into the schools of their (parents’) choice. Undoubtedly many more will be charged, as the principal manipulator, Rick Singer, is alleged to have helped as many as 750 parents fake their kids’ way into college. Parents reportedly paid an average of $250,000 to $400,000 per student, much of which went to bribes and cheaters. The parents are among the elite and powerful, ranging from actresses Felicity Huffman and Lori Loughlin to chairmen and CEOs of law firms, vineyards, fashion houses, and investment companies. In our rigged justice system, this is an atypical list of people who face prison time.

But that’s the not the rigged system worth talking about here. Though no colleges were charged in this dragnet, college admissions have long been worthy of scrutiny due to flagrant abuse of a game theory concept called zero-sum thinking. This mindset has damaged American learning beyond any sort of repair. Short of a complete rethinking, higher education will continue to be America’s most poorly managed resource.

Zero-sum thinking is the belief that you are part of a zero-sum game, a construct in which a win by anyone comes at the cost of someone else losing. Or perhaps many someones. The key concept is that no wealth is either created or destroyed. It is merely redistributed. If one person gains wealth in a zero-sum game, another person must necessarily lose it. What an awful game.

Zero-sum thinking is easiest to understand when you consider whatever you are talking about as a scarce resource. If there are only so many widgets, and we all want widgets, some of us won’t get widgets. Those unlucky or unskilled enough to remain widget-free are the losers of the widget allocation game.

It’s very tempting to apply this standard to college admissions. There are, after all, only so many spots in colleges, and the spots in the top colleges are desired more than those elsewhere. (This applies regardless of what criterion you use to justify the word “top.” A football powerhouse in the SEC might be more attractive to a high school cornerback than, say, Dartmouth would be.) And the colleges vastly benefit from doing so. Creating competition for precious admissions causes the value of those admissions to go up. And up. And up.

And these are public schools.

That Center on Budget and Policy Priorities chart shows that in the 1970s, the cost of putting one child in college was a plausible amount. The average family could afford it, and for those who couldn’t, the system underpinned itself with grants and student loans to let those parents put their child in school and food on the table. In the 1980s, that started to not be enough. The growth of tuition cost broke away from the median family and started to match the income growth of the top 1%, briefly hitting it in the early-1990s recession and then settling somewhere between for a while. Hard to manage, but maybe still manageable. And then in the 2000s, it just went off the rails. Tuition growth matched the entire income growth for the top 1% step-for-step, and then in the 2010s it blew right by it. By a lot. By 2014 not only has tuition growth surpassed the income growth of the top 1%, it has surpassed the income growth of the top 1% plus that of the median family.

Over that decade of the 2000s, college tuition growth rose far faster than any other cost in American life.

Side note: That housing price line around 2008 is just painful to look at.

By the mid-2000s, the average year of work did not pay for the average year of college.

What must it have been like to say “It’s going to be 15% of our household income, but I think we can afford it”?

Only one thing causes that kind of spiraling cost: extreme scarcity. That is essentially what a run on a bank looks like. But yet, look at this chart from the National Center of Education Statistics:

Or to put it another way, half of our population gains since 1970 have been college students.

The massive increase in cost has come with a massive increase in availability. We’ve had about a 13% increase in population since 1970, and more than 100% increase in number of college students. That should be dragging the price down, not up. But it’s not, because another thing keeps it rising.

That thing is something that has been shrinking in recent years elsewhere: American consumers’ access to loans. Want to start a small business? Sorry, the Small Business Administration under former wrestling magnate Linda McMahon has nothing for you. How about get a health care fund going? Nope, the Trump administration is closing those down. But if you want to bury yourself in student loan debt, prepare for a world of options.

When you are crushing “Other,” you are doing serious work.

Operation Varsity Blues exposed the most egregious element of this system. Despite the cost of this zero-sum game, one that you would think would price most of the players out of the system, there exist players who are willing to pay even more. Lori Loughlin was not willing to accept a world that featured her Instagram-influencer daughter Olivia Jade being left out of USC. Her daughter who famously said

None of these women will end up with a college degree.

“I don’t know how much of school I’m gonna attend, but I’m gonna go in and talk to my deans and everyone and hope that I can try and balance it all. But I do want the experience of, like, game days, partying, … I don’t really care about school, as you guys all know.”—Olivia Jade, 2018

It was very, very important that this person be allowed to go to the college of her choice. Through Singer, Loughlin and her husband Mossimo Giannulli faked Olivia and sister Isabella’s crew careers and paid off USC crew coach Zenon Brabaj to sign off. This actually worked. At least till the feds showed up. Now Olivia’s influencer career is in ruins, she and her sister are dropouts, and their parents face years in jail.

Operation Varsity Blues was shocking not because we learned that parents were caught scamming the already scam-centric system, but that they might actually go to jail for it. The zero-sum game makes the value of a degree so preposterous, parents actually bribe athletic coaches to get their children in. And if they’re doing that because they can afford it, think of how damaging it is for those who can’t. Decades of debt isn’t worth it. And yet not agreeing to take on that debt is tantamount to condemning your child to poverty.

This is not a sustainable equilibrium. It has to change. On Monday, Senator Elizabeth Warren unveiled a blueprint for how it could.

Look at how excited all those people are!

“College shouldn’t just be a privilege for those who can afford to take on the significant expenses associated with higher education. Like K-12 education, college is a basic need that should be available for free to everyone who wants to go.”—Elizabeth Warren

Warren is not the only Democratic presidential candidate pushing a college plan, but hers is the most detailed and ambitious. Here are its main features:

This is how to end the zero-sum game. Making college available to all means students can make smart decisions that won’t bankrupt them for decades. If someone wins, no one loses. Sure, there will always be rich people buying their kids into school. But at least we’ll think they’re crazy.

Of course, this will cost $1.25 trillion, and thus it’ll be hard to get through the current Congress. So in 2020, all you need is for Democrats to win both chambers and for a respected female senator from the Northeast to win the White House against a racist, sexist, homophobic, corrupt, deceitful, fascist demagogue. That seems like an easy sell, and yet….

OK, fair warning. Don’t count your canceled student loans till they’re hatched.

This is the thirty-third installment of a series on politics and game theory. It has covered impeachment of Trump, Russian collusion, white supremacy, abortion, guns, nuclear war, debt, the NFL, sexual harassment, the Mueller probe, taxes, Trump’s first year, the Clinton Foundation, immigration, parades, the Democrats, hope, family separation, trade wars, Trump’s endgame, the New York Times op-ed, Justice Kavanaugh, Speaker Pelosi, lame ducks, the GOP legacy, the stock market, the Democratic field, shutdowns, third party candidates, the Virginia scandals, in-party impeachment, and Trump’s mafia code. Many of these essays are in my book Game Theory in the Age of Chaos, which you can preorder by clicking the link.