This article  had me laughing, smiling wistfully, and pulling what little hair I still have. It's frustratingly true.
The article basically asks why colleges and universities are so consistently caught flat-footed every time there's a state budget crunch. Rather than the predictable right-wing bloviating -- "public anythings can't do anything right, except the military, which is perfect in every way, so shut the hell up you hippie peaceniks..." -- it actually addresses reality. In this case, it's the difference between systems and silos.
If we had a higher education system, we'd build into it features like transferability of credits, inter-institutional divisions of labor -- "this campus will specialize in life sciences, and that one will specialize in social sciences" -- and consistent standards between, say, high school graduation and public college entrance. Hell, we might even tie graduate admissions numbers to projected employment needs in various fields.
But we don't have a system. As in so many things, we have thousands of independent silos, each with its own internal politics. And we try to stitch them together after the fact, paying only intermittent attention to their own individual imperatives. Predictably enough, ignoring their internal imperatives leads to failure over and over again.
Why don't public colleges and universities salt away large sums of cash during good times to tide them over during bad times? Because the internal politics won't allow large sums to sit undisturbed. Because the external politics are such that when times get bad, legislators see those reserves as excuses to cut funding. (Apparently now in Massachusetts, the state is even applying this to endowments at private universities!)
Why don't public colleges and universities at least develop contingency plans for 'what to cut first' when times get tough? Because the contingency plans would generate terrible ill-will and politicking on campus during the rare good times when people could be otherwise engaged. (Imagine the faculty senate meeting: "Clearly, Nuclear Basketweaving is our weakest program, so if the state cuts are bad, we'll get rid of that." "WHAT????") Because legislators will see contingency plans as licenses to cut. Because naming departments as the lowest priorities at a campus rapidly becomes a self-fulfilling prophecy.
I've read plenty of college promotional materials. I've never – never – seen a college admit to the public at large that a given department or program isn't very good. That's not because every program at every college is perfect, heaven knows; internally, I've heard plenty of discussion of the weak links at various places. But it's simply not in the college's interest to advertise that. A publicly debated contingency plan would effectively tell the public which of any given college's gazillion priorities are the lowest. Presumably, the public would respond accordingly.
So we have colleges pretending that all is well, because to do otherwise would make things worse. And we have legislators largely disregarding what they hear, partly out of a legitimate skepticism and partly out of baser, but very real, political motivations of their own. We make idiotic short-term decisions during crunch times because we can't count on internal unity or external comprehension. For example, I don't recall the public debate about going all-adjunct, all-the-time. It was the cumulative result of a great many local decisionmakers taking the path of least resistance. (It's politically easier to 'not hire' than to fire.) Although it's tempting to ascribe conspiratorial agency to the trend, it was primarily a predictable consequence of failing to look at higher ed as a system.
Fixing it is the hard part.