This worries me in a number of ways. At the beginning of the twentieth century, American education was really quite advanced, compared to other industrialized nations. Even today, American higher education is one of the unquestioned strengths of the nation, compared to all other countries. But the situation reminds me not a little bit of German education in the 1920s--still powerful, but living in important ways on the fumes of fuel given to it in previous eras.
Higher education is inherently a slow-changing creature. Given tenure, there are very few external incentives, most of the time, to change professors' behavior. (And few professors seem as motivated internally to change as we might like them to be--though note: when we're the ones not changing, we call it "character;" when the others are the ones not changing, we call it "stubbornness.") But it is always changing. Having read some on the history of American higher ed, it's clear that our status and capacities are always related to large-scale public investment in the project--directly to research programs and projects, and indirectly in the way of student loans, grants, and other things. All the evidence I have seen (or at least all the evidence I remember seeing) suggests that these investments pay off rather strongly, both in medium term and in the long term.
Nowadays people seem to have cathected higher education to politics, assuming professors are smug liberals. That is certainly the case in the humanities, though the reasons for that may not be reducible to chardonnay and Volvos; but it is not the case across the university, especially in the sciences and technology fields. I believe in all these fields, so I'm not trying to suggest writing off the humanities. (That would be like sawing off the branch I'm sitting on.) But then again, pieces like this suggest that the polarization is going hand-in-hand with larger defunding of higher ed. This is a mistake. How can we make the public see that it is a mistake?
But I don't have a useful suggestion for how we in the academy can help here, beyond a very vague sense that our most proximate incentive structures are quite different from our longer-term institutional incentive structures. Our most proximate incentive structures are individual and largely disciplinary: we gain reputation, status, and money by being judged worthy by our peers. And yet, the work we need to do in the long term is not to impress other members of our discipline, but to make a larger public appreciate the kind of work we do. More "public work" of this sort may not aid our disciplinary reputations. Occasionally some of our disciplinary peers will think less of us for it. But it seems like a wise effort to make. One way to think of this public work is to think of it more as an extension of teaching than of research--of making the whole "public" the classroom. Just a thought.