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It would actually be _more_ competitive, because what's driving the reduction in admissions is uncertainty in grant/funding availability.

That means fewer available slots overall. Kornbluth's comments don't explicitly state anything about _applications_, just _admissions_. Given the heightened economic uncertainty and poor job prospects for recent graduates, I'd expect more students to be looking for graduate school as a way to tide themselves over.

So a very, very bad picture for folks seeking graduate education and training.

No, it doesn't tell us anything about how competitive it is.

This is a 20% drop in enrollment, not in applications.

If applications stayed the same, it would be more competitive, if they dropped more then 20%, it would be less competitive.

If you're applying to MIT, there are 20% fewer assistanships and (depending on the department and program) something like 10% fewer applications.

Not at all. Notice they said nothing about applications or acceptance rates. It is actually more competitive to get funding.