Auburn, Alabama, is featured on the front cover of today’s Wall Street Journal. I was interviewed extensively for the story, but was not mentioned. The story is about the relationship between state universities and increased manufacturing jobs. It turns out that my input did not fit into the story.
The thesis of the article was that college towns have been able to protect or create jobs lost to China and Mexico, while areas without colleges and large land grant state universities have not. The destruction of jobs and the failure to replace them is seen as a major driving force behind Donald Trump.
My input did not fit into this story. I agreed that large state universities did increase local jobs, but that this was only possible because of very large subsidies from the federal and state governments, along with subsidized college loans. Areas without such institutions of higher education pay taxes for but receive little benefit from these subsidies. This is a good example of Bastiat’s ”seen and unseen.” We see the benefits of the concentrated subsidies, but we do not see the dispersed cost of the taxes necessary to pay for the subsides.
I told the reporter that the big picture story was the two Korean automobile factories about a 50 minute drive to the east and west of Auburn and all the parts manufacturing and warehousing facilities in between. This area has a natural economic advantage for assembly and distribution in the southeast United States. Auburn also has an advantage in public education because university faculty demand high standards for the education of their children and this is very important to Korean executives and their families who have located in Auburn. None of this was mentioned in the article.
