It's interesting to see such a high profile person refer to higher education this way. I've been thinking the same myself for a while and I recall a few comments on HN expressing the same sentiment ... do universities make people somehow educated but stupid simultaneously?

I've personally concluded that they do, and that society would be better off if all government money was removed from the higher-ed system entirely (which would presumably shrink it a lot, at least outside of the USA).

The problem is that academic culture imbues students with the notion that educated people = smarter people = better people, that the worth of people can be measured very precisely via grades, and that with education comes the ability to solve any problem.

But the problem solving value add of a degree is actually not that high even in very STEM oriented fields, and is virtually non-existent in many other fields like economics or the social sciences. So society is suffering from this huge river of people entering it who have little experience, little understanding of the real world in which success and self-worth is not entirely a function of grades dispensed by your betters, and yet who believe more than anything that they are vastly superior in almost every way (intellectual, ethical, etc) to people much older than them.

Meanwhile Silicon Valley companies drowning in money and with a culture of never returning funds to investors via dividends or buybacks struggle to find experienced employees to hire, so gorge themselves on this stream of new graduates, bloating up to enormous levels with people who believe intellectuals can and should do anything they believe will "make the world a better place".

These students quickly come to dominate, and yet nothing causes their world-views to self correct. In the artificial womb of SV where going bankrupt because you don't make money is virtually unheard of, success and self-worth is still being determined by arbitrary scores dispensed by your intellectual betters via promo committees and bonus schemes which are largely closed-loop and unconnected to real world goals like happy users. See the discussion of Googler incentives in the Inbox discussion elsewhere.

To older people who have had a much wider range of experiences, these Silicon Valley types come to seem impossibly naive in their utopian beliefs that any and all dissatisfactions can yield to their skills, if only 'experts' like themselves were permanently in charge. And the SV types see in the Republican party a bunch of uneducated angry old white men who don't value expertise and question intellectual authority all the time; and who are obsessed with the concept of markets - a concept that most of them have never really been exposed to outside the lecture hall.

It is therefore inevitable that a liberal/conservative divide springs up, oriented around the Valley. It doesn't have to be this way. If SV tech firms were culturally capable of admitting when they've run out of ideas and are generating too much money, re-allocating funds via to other firms using dividend payouts and buybacks, they'd hire fewer graduates and have a more experienced workforce overall. This in turn would reduce their "computers can build utopia" mentality, and make it easier for them to fit in with the rest of society.