As IF Times

link Peter Thiel: Were in a Bubble and Its Not the Internet. Its Higher Education. | TechCrunch.

At this time when we are witnessing “Occupy Wall Street” protests at various cities in the U.S., this is a topic worth exploring.  The topic is education.

There is a glaring incongruence between what the protesters are bleating about, ie: greed, corporate dominance, yada yada yada and the prevailing general wisdom about getting a higher education.  Virtually no one will argue that a “good” education is the foundation of success.  By success, that is implied to mean financial success,  an ability to provide for yourself and your future family.  For this path to financial success, people are increasingly asked to pay almost a lifetime’s ransom in order to participate.   For many people, this payment is achieved either by parental or family help or by guaranteed student loans.  In many cultures, outside of the Jersey Shore, an educated person is held in very high esteem.

It comes as a great shock to many graduates therefore, that their acquired skill sets are greeted with the sounds of crickets rather than boisterous swooning when applying for jobs in the real world.  It’s as if they were victims of the biggest con of their lives.  And in a real sense, they were. The hard hit of reality is painful for many.  What happened to the pot of gold promised at the end of the education rainbow?

The fact that this experience has become more and more of a reality for many will likely be the subject of another article, but the salient point of this piece is that if the “Wall Street” protesters actually represent more than the small handful of perma-discontents that they are, then what is the point of getting an expensive education? If there is no benefit to bettering your circumstances by excelling in some field in order to get a high paying job, why bother going  to school?  The whole premise is that by applying yourself in school, one can wind up with a sharpened skill set that will be sought after in the real world.

This principle extends to all aspects of culture.  Why does someone like Derek Jeter get paid millions of dollars for swinging at a baseball?   Why are genetic freaks in the NBA paid buckets of money just because they can drop balls into hoops?  Why do people pay hundreds of dollars to watch Justin Bieber sing for an hour or two?  Ok, that may have been a bad example.

The answer of course is that in the real world, there will always be those that outperform others in any given endeavour.   Society pays for excellence.  That’s the way it is.  While there may only be a few among us that have the natural physical gifts that allow them to play pro ball, most people are able to hone whatever intellectual skills they have by getting educated.  Of course, attending school and getting a degree in basket weaving or doing a PhD on the sex life of ants won’t necessarily propel you past someone with greater drive or greater street sense or greater connections.  Entitlement only exists in the artificial world created by those with the luxury of believing it.

While most are certainly better off by going to school than by not going to school, the cost/benefits of paying over $100,000 to get a 4 year degree must be weighed against the utility of that degree.  As the linked article suggests, the bubble of college costs may be about to burst.  Not all degrees are created equal but again, this may be a topic for another article.

Nevertheless,  according to the misguided cretins populating the recent protests, this will all be irrelevant,  since to them, the whole notion of success is tied directly to the notion of greed.  It’s only a matter of time before they start protesting schools as incubators of greed.   Once they make that connection, colleges all over will be the venue for protesters as well.  The only problem will be that they’ll have to hire someone articulate enough to make signs.

link YouTube – Kelli Space Interview Part 1 – Peter Schiff Radio 11/30/10.

Not really necessary to listen to the entire interview.  The salient point is made from the first few minutes of the conversation.

In another area of human activity rumored to be risky, namely buying stocks or mutual funds, the buyer is practically smothered with disclaimers about the risk of making such an investment.  The boilerplate lines are:

1. Investments may be risky and loss of some or all of invested capital may result

2. Past results are not an indicator of future performance.

Similar to all pharmaceuticals we take these days, the lawyers have draped themselves all over stock investments to warn people away.  Nevertheless, somehow people still take drugs and buy stocks.  Maybe it’s time the lawyers jumped onto the College education bandwagon. 

While I can’t comment on the experiences provided by a  4 year program in sociology, we can probably say that spending close to $200,000 to attain a non professional undergraduate degree without some avenue to employment should not have happened without a prospectus.  No doubt this poor gal is just one of tens of thousands of wide eyed students going to college each year in the hopes of bettering themselves for a competitive job market.  If the parents are able to write the cheque, bully for them.  In the case of this gal, like many other students who are forced to borrow money for the experience, there should be a disclaimer in bold letters at the outset of the school career which states:

“Warning.  In no possible way can the cost of this degree be paid off in your lifetime, we strongly suggest taking courses in waiting tables and selling time shares.  Your degree may have no practical use to society”

Under the noble  idea that no one should be denied the right to higher education because of financial disadvantage, governments have implicitly guaranteed all student loans via their funding arm Sallie Mae.  Similar to the home mortgage fiasco, if lenders are not at risk since the government provides a backstop, why not lend the money to anyone who asked?  Moving up the food chain, if students were willing to pay the tuition, why wouldn’t colleges just ratchet up their fees?  Which brings us to where we are today wherein some private colleges charge 25, 35, or even 55 thousand dollars a year for undergraduate programmes. 

To be sure, colleges can charge what they want, but the original goal of allowing financially disadvantaged students to attend school has achieved, shockingly, the exact opposite effect.  Indirectly, the government is supporting the high cost bases demanded by all colleges.  University educators no longer have to publish or perish, they can make a pretty good wage just teaching.  In this way, the public supports the private school system.  Now, even pedestrian college degrees will cost at least $100,000 even at some state colleges. 

If families cannot afford to underwrite this amount, the aspiring student, like the gal in the interview, takes on a crushing debt load to obtain a degree with little or no guarantee of employment.  Even if a liberal arts student were able to find a job with their degree, the burden of paying off such a crushing debt will guarantee them a miserable life.  It’s only a matter of time before colleges have to issue a prospectus upon taking in students.  Otherwise, students would be better off paying lawyers to sue for misrepresentation.

Update: Aug 18, 2011 http://management.fortune.cnn.com/2011/08/18/have-b-schools-become-debtors-prisons/