Thursday, April 14, 2011

the higher education bubble

Techcrunch | the bubble that has taken the place of housing is the higher education bubble. “A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”

Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated.

Like any good bubble, this belief– while rooted in truth– gets pushed to unhealthy levels. Thiel talks about consumption masquerading as investment during the housing bubble, as people would take out speculative interest-only loans to get a bigger house with a pool and tell themselves they were being frugal and saving for retirement. Similarly, the idea that attending Harvard is all about learning? Yeah. No one pays a quarter of a million dollars just to read Chaucer. The implicit promise is that you work hard to get there, and then you are set for life. It can lead to an unhealthy sense of entitlement. “It’s what you’ve been told all your life, and it’s how schools rationalize a quarter of a million dollars in debt,” Thiel says.

Thiel isn’t totally alone in the first part of his education bubble assertion. It used to be a given that a college education was always worth the investment– even if you had to take out student loans to get one. But over the last year, as unemployment hovers around double digits, the cost of universities soars and kids graduate and move back home with their parents, the once-heretical question of whether education is worth the exorbitant price has started to be re-examined even by the most hard-core members of American intelligensia.

Making matters worse was a 2005 President George W. Bush decree that student loan debt is the one thing you can’t wriggle away from by declaring personal bankruptcy, says Thiel. “It’s actually worse than a bad mortgage,” he says. “You have to get rid of the future you wanted to pay off all the debt from the fancy school that was supposed to give you that future.”

But Thiel’s issues with education run even deeper. He thinks it’s fundamentally wrong for a society to pin people’s best hope for a better life on something that is by definition exclusionary. “If Harvard were really the best education, if it makes that much of a difference, why not franchise it so more people can attend? Why not create 100 Harvard affiliates?” he says. “It’s something about the scarcity and the status. In education your value depends on other people failing. Whenever Darwinism is invoked it’s usually a justification for doing something mean. It’s a way to ignore that people are falling through the cracks, because you pretend that if they could just go to Harvard, they’d be fine. Maybe that’s not true.”

And that ripples down to other private colleges and universities. At an event two weeks ago, I met Geoffrey Canada, one of the stars of the documentary “Waiting for Superman.” He talked about a college he advises that argued they couldn’t possible cut their fees for the simple reason that people would deem them to be less-prestigious. Fist tap Dale.


nanakwame said...

One thing I learned as a youth in Harlem was what a good Hustler was – negative and positive. Iceberg Slim wrote well about them too. The core of a good hustle is to prove to the sucker that what he or she was going to get, was going to cost less in what they were going to acquire. That the value was off the hook and you were the special one to obtain this valuable killing (the hook). In the end the value is not worth it, and you have lost your money because of YOUR BLIND DESIRE. The hunter in me went in another direction and more ethical, ergo; I am still alive and blessed.
If we notice they are going to make a movie of John Gotti, not of Ella Baker (good educational value). This only proves that The Republic after the 1960’s (the warning began) became Thug Capitalism and we got the famous Godfather. We know it was there since the beginning of banking. If you go back to the old movies of Capone, the actor was great yet the character was vile, flash forward and you get two with pretty boy – Warren Beatty and one with a vile but smart Bugsy.
Higher Education became the same ethos, for towns and cities lost their manufacturing base, yet; what American would deny advancing their child or themselves for a future where the value was suppose to be more than the investment? The middle class was hooked.
Towns upstate NY have LAN coming out of HS; and now two years of robotics get you 26 dollars an hr. – 4 years or better of law school gave you either a lower entry level salary or now more uncertainty where some must leave the nation, at present. For the value of the lawyers has diminished, thank g_d. The belittlement of the stories of working people and the denial of its romantic sentiments gave us The Hustling Rich and Superficial Beauty, covering the best hustling system money can buy. Remember when a mask is taken off, we get an attempted dicatatorship

nanakwame said...

btw - I say the energy and talent in this Schemata, if placed in education of all children to 12 or 14 years of education, would have had better returns. The heart of Dr. King's warning - chaos or community. We choose chaos

brotherbrown said...

In the ten years between 2000 and 2009, my kids graduated from HS and college. My wife and I felt the BS degree was part of our responsibility, so that they could enter the workforce with degree in hand and no debt. I've never done a full tally, but I estimate it took $250k all told to get the two of them to the finish line. It could have been less if we had insisted they stay at home and attend a local college, but the value of being out of state was part of what we were banking on to help them mature, and surely enough, they don't want to live in our home anymore.

So now I have to rebuild the savings (talk about tapping all sources), but here is the new reality: people are spending hundreds of thousands of dollars on k-12 education, especially middle school and high school. My brother, who started his family 20 years after me, recently learned his son was accepted to Campbell Hall, a private school (now called 'independent school') in the San Fernando Valley of Southern California. Annual tuition, $76k. He will have a scholarship to attend the school that will cover 3/4th of the tuition, and his sister will be able to attend when she reaches the 6th grade in a couple of years.

Pretty much, graduates of Campbell Hall enroll in elite universities, so supposedly it is worth the tuition, but it's hard to fathom paying that much for k-12 education, then turn around and pay for a university degree.

umbrarchist said...

We need to distinguish between Education, credentials and KNOWLEDGE.

This is the funniest video on YouTube.

At first it just seems odd but think about it for a minute. Harvard is in Boston. Imagine Harvard undergraduates sitting in class and snow is falling outside the windows. These people attended a prestigious university for FOUR YEARS and all of that time they did not know that when it was winter in Boston that it was SUMMER IN AUSTRALIA!


Are these people actually INTELLIGENT? Is the world so screwed up because people that are really dumb get prestigious educations and everybody thinks they are actually intelligent? How does everybody not know planned obsolescence is going on in cars 41 years after the Moon landing? Do the Harvard graduates know?

Memorization is not EDUCATION. I have listened to University of Chicago graduates argue with each other. It is not the financial education bubble that matters the most. It is the pseudo-intellectual bubble. We are believing what stupid pseudo-intellectual phonies tell us. That causes all of the other bubbles.

The Great Gray Plague, by Raymond F. Jones

Education is supposed to impart RELEVANT Knowledge.
Now it is nothing but credentials and that is all most of the students care about.

umbrarchist said...

I will be blunt about it. It is totally absurd that education is so expensive.

A simple way to make education inexpensive could have been created decades ago. Create a good NATIONAL RECOMMENDED READING LIST. We go to school to pay people to waste our time reading THE WRONG BOOKS. The way the system works depends on most people not knowing plenty of important things.

I just found out about this book in the last year.

The Tyranny of Words by Stuart Chase

I am really pissed. He mentions an author I did find, Alfred Korzybski. I struggled through most of his Science and Sanity. But he was Polish. I wonder how much that affected his English.

So for electricity try:

I wish someone had given me something like that in 7th grade.

I think kids that really want to learn don't need teachers so much as good cookie crumbs. There is too much bullshit to wade through in this society and computers and the Internet can be new was of producing more bullshit faster.

CNu said...

BB - I must shamefully confess to having spent $250K already on my daughter's Pre-K-11 education here-to-date, and she still has another year to go.

Uglyblackjohn said...
Seems to be a good starting point.

nanakwame said...

The list of surprising professions with the potential to earn a great paycheck is a long one. Here are a few more:

•Auto Damage Insurance Appraiser ($56,180)
•Funeral Director ($60,390)
•Claims Investigator ($58,780)
•Urban Planner ($64,680)
•Exhibit Designer ($50,600
•Physical Therapist Assistant ($76,220)
•Boilermaker ($56,680)
•Brickmason ($49,250)
•Traffic Technician ($43,470)
•Elevator Repairman ($67,950)
*Average annual pay is from the U.S. Department of Labor, May 2009.

CNu said...

Every single one of these is on the endangered species list as it presumes long-term continuation of utterly useless and wasteful activities which themselves can only persist in a high available net energy context and economy. (Elevators will need repair and therapy rides the healthcare industrial coattail) - but the others???

Dale Asberry said...

Boilermaker and brickmason too?

nanakwame said...

Just sharing my friend, they still get paid. Strange response by the both of you, when one raises children I go by this:
Learn what your child expects and teach them the best why to get there.

My four boys are working thank you. Dale you raised children? I agree that other skills are important , but a parent can never predict the success of their children in the long run, never.

CNu said...

OK, boilermakers are underrepresented due to their making the big bucks now in the PROC. However, going forward, how much longer do you expect the chinese or anybody else's growth to continue in the post peak energy era? We're there now.

I encourage the study of gardening, genomics, and network and systems administration...,

Dale Asberry said...

I'm not sure I understand why my response is strange to you. I've clearly indicated that we're headed for a period of extended energy uncertainty when every system we participate in is strongly dependent on cheap, dense energy inputs. When those energy inputs are gone, only directly productive activities generated with dispersed solar energy sources will be able to continue.

I am raising children and I completely agree that there is nothing I can do to guarantee the success of the paths they choose. I only agree to raise them well and leave them a legacy to build upon if they choose.

Big Don said...

Funeral Directing will always have traction; in many cultures the pomp and ceremony associated with one's departure is (ridiculously) considered to influence quality of one's life in the hereafter. State of the economy doesn't matter; how do all these gang bang victims deep in the welfare hood, without a ratsass pot to piss in, afford their glorious bling-laden sendoff after the latest drive-by...??

CNu said...


the pomp and ceremony associated

is maladaptive and will have to be replaced by something vastly more austere.

remove the pomp and ceremony, the casket, the viewing in the funeral parlor, the hearse and procession, the church remembrance, the graveside mummery, the grave, the cemetary, etc.., and what's left?

when funeral director is reduced of necessity to renderer, tanner, and candle-stick maker - the proper functions of a post-peak undertaker - get back to me.

Big Don said...

Actually, there is a lot of technology, skill and artistry involved in getting it right for a viewing, i.e., making the body/face look natural. Especially if the deceased is an accident victim. Michael Savage radio listeners (conservative talk show) will have picked up on that, because Savage worked for a mortician as a teenager and has talked about all that at great length on his show (he has a legit PhD in nutrition from Cal-Berkeley, talks about a lot of interesting stuff beyond just the politics) .

CNu said...

There's a lot of technology, skill, and artistry in skinning, gutting, boning, and rendering too - and on the other end of those techniques - you get something useful. The grief management ceremonies and magical thinking bound up with the funerary arts are unquestionably ancient. They are equally unquestionably useless and should be eschewed by that remainder of the species capable of making it through the pending bottleneck.

Better we should get some candles, some leather/vellum, some fertilizer and other useful goods out of the carcass of the deceased. real talk...., on a related note, the little boy is eager to point his new high-powered pellet rifle in the direction of some small game. He doesn't yet appreciate the responsibility that that entails, but faced with dressing his first small mammalian carcass - he will.

{Michael Savage is a geriatric embodiment of arrested moral and social development and an exemplar of petrified racial resentment. A few years back, I would occasionally tune in to his show - but it was the same retarded garbage every.single.time. Gurdjieff would've referred to him as "already dead".}

CNu said...

Sam Wood knew what a cemetary was useful for...,

Big Don said...

@CNu -- You are absolutely right about what useless rituals should be foregone because they don't make any rational sense. But there are too many IQ-75 folks out there that will never get it. Your post on Prayer for Lower Gas Prices clearly proves that...

CNu said...

lol, the so-called IQ-75 folks are just carrying forward the traditions and institutions of the dying barbarian culture that kidnapped, exploited, discarded and ostracized their ancestors. That'd be the very same dying barbarian culture that indoctrinated you and which has ultimately betrayed itself and all its pitiable minions...,

nanakwame said...

LoL Just placing a stat on existing life

Gee Chee Vision said...

Thought this might be of some use in your research.

American Childhood Through the Years: Colonial Era, 18th Century Through Early 19th Century and Progressive Era

CNu said...

The child is batting 1000 so far, having been admitted full-ride to her safety, and 2/3rds ride to one of her "reach" schools. I've eased up on my vocational technical education expectations for her, as she's clearly in exploratory mode. I suspect she'll double major in math and studio art - just kind of kicking back and enjoying the process right now.