American higher education is in transition and if there ever was a "golden age" for faculty, it probably is behind us. The best historical data on the composition of faculty is collected annually by the American Mathematical Society. Between 1967 and 2009, the share of full-time faculty with PhDs remained constant at about 90 percent at doctoral level universities and rose from 40 to 80 percent at the masters' level and from 30 to 70 percent at bachelors' level institutions, with most of the increase in the latter two types of institutions occurring by the mid 1980s. However, during roughly the same period of time, there have been other slow but steady changes in the nature of the faculty and the allocation of academic institutions' resources across expenditure categories that have had negative effects on the market for PhD faculty. The percentage of faculty nationwide that is full-time has declined from almost 80 percent in 1970 to 51.3 percent in 2007 and the vast majority of part-time faculty members do not have PhDs. The percentage of full-time faculty not on tenure tracks has more than doubled between 1975 and 2007, increasing from 18.6 percent to 37.2 percent. This paper discusses the forces that have led to the above changes, which began well before the "great recession" and financial meltdown, traces how these changes are distributed across higher education sectors, and discusses what they mean for both the quality of higher education and higher education governance. The author begins in the next section by providing some detail on the changing composition of the faculty across institutional types and in academic economics departments. While economists have provided many explanations for why a tenure system is desirable, and he briefly mentions these in the next section, only recently has research been conducted on whether the type of faculty that undergraduate students receive instruction from influence their educational outcomes and he also summarizes what these studies have taught us. He then discusses the forces that have led to the changing distribution of how higher education institutions allocate their resources and the declining share of resources going to instruction. Among the forces he discusses are the growing costs of research and the growing share of research costs borne by academic institutions, the growing regulatory burdens faced by academic institutions, the growing costs of libraries and information technology, and the growing expenditures by both public and private higher education institutions on alumni affairs and development activities, as they seek to expand the flow of external gifts they receive to help fund their activities. Growing financial pressures faced by public higher education institutions, which have been exacerbated by increased competition from the for-profits, has caused a growing number of the publics to adopt differential tuitions by major or by year of enrollment. The author presents data on whether the institutions adopting differential tuitions are the public comprehensives that directly compete with the for-profits in some fields, or if they tend to be the flagship publics that face less elastic demand curves for the seats in their classrooms. Finally, the author concludes with some speculations about the future of American higher education and how recent actions to eliminate collective bargaining for faculty in public higher education in a number of states will further depress the interest of American college graduates in going on for PhD study. (Contains 7 tables and 49 footnotes.)