The glut of PhDs has been around since the 1950s. Universities, however, are more than happy to keep cranking them out, fully aware that almost none of them will get hired.
And ironically enough, even in an extremely tight market, this does not mean that universities only choose “the cream of the crop” in PhDs. Instead their hiring is often based on connections and political affiliation.
Professors teach ever fewer numbers of classes per year. They crank out PhDs in fields like "women's studies," then require every undergrad to take a class in this field. No wonder college costs are rising faster than almost any other category.