Free Markets, Free People

Daily Archives: April 25, 2011

The “higher education bubble”–ready to burst?

More and more it is becoming clear that a college education isn’t all it was cracked up to be in terms of guaranteeing a better lifestyle.  So is it worth the money and the debt?  Some are wondering:

The Project On Student Debt estimates that the average college senior in 2009 graduated with $24,000 in outstanding loans. Last August, student loans surpassed credit cards as the nation’s largest single largest source of debt, edging ever closer to $1 trillion. Yet for all the moralizing about American consumer debt by both parties, no one dares call higher education a bad investment. The nearly axiomatic good of a university degree in American society has allowed a higher education bubble to expand to the point of bursting.

Since 1978, the price of tuition at US colleges has increased over 900 percent, 600 points above inflation. To put that in number in perspective, housing prices, the bubble that nearly burst the US economy,  then the global one, increased only fifty points above the Consumer Price Index during those years. But while college applicants’ faith in the value of higher education has only increased, employers’ has declined. According to Richard Rothstein at The Economic Policy Institute, wages for college-educated workers outside of the inflated finance industry have stagnated or diminished. Unemployment has hit recent graduates especially hard, nearly doubling in the post-2007 recession. The result is that the most indebted generation in history is without the dependable jobs it needs to escape debt.

I was struck by the 900% increase since 1978.  I’ve certainly not seen anything in particular from our college grads – as opposed to those who graduated in 1978 – that would make what they received as a degree worth 900% more than it was in ‘78, have you?  And certainly nothing worth 600% above the inflation rate.

Frankly, the institutions of higher education have been scamming Americans for quite some time.  And this is just my opinion, but many of the colleges and universities in this country are a bit like some college sports teams – they don’t care if you graduate, they just want you to play well for them for 3 or 4 years.  Change “play” to “pay” and you describe many of the schools I’m talking about.  They really don’t give a rip about graduation rates.

And of course, when you have institutions get into marginal study areas like “gender studies”, etc., then it’s no longer about education so much as it is  indoctrination.  Or at least that’s been my experience and the experience of many I know.  And things like this only reinforce that belief.  As for the tolerance for different ideas?  Eh, not so much.  Occurrences like this aren’t as uncommon as one might think.

The question more and more are asking then is whether higher education worth the bucks?  There are plenty of studies that continue to show that college students earn more than their counterparts with a high school education – at least in gross pay.  But in net pay, is it enough to justify the expense?  Maybe not:

 

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Derek Thompson explains:

Here’s the problem. The college premium isn’t consistent across all industries. Some salaries have flat-lined, while other jobs have simply disappeared thanks to off-shoring and automated technology. Meanwhile, over the same time that the wage premium has doubled, the cost of a four-year college education has more than doubled. Student loan debt is near $900 billion, more than credit card debt in this county.

College education is an effective elevator to bring workers to higher-skilled, higher-paying levels in the labor force. The question is whether the ride is efficient. Today the elevator is so prohibitively expensive that students and workers are uncertain whether the floor they’ll be dropped off justifies the cost of the ride.

That wage premium makes it questionable as to whether or not the cost of the education is worth the investment and debt.  And it is likely to get worse, not better.   So are we in an education bubble?  And if so,  when the bubble finally bursts, will a college education again justify the expense relative to the net pay they can expect to earn over and above those without such education?

Maybe in China.  Because with the highest corporate tax in the world and politicians trying to find a way to raise taxes for everyone, the jobs they do find here aren’t going to be paying that well.

Yup, the more you look around, the bigger and bigger you realize the mess is.  And it isn’t going to get much better anytime soon.

~McQ

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Fact Check Org fact checks Obama’s budget speech and is not impressed–factually speaking

President Obama’s speech on April 13th was used as an opportunity to spread false information about the GOP’s budget plan authored by Rep. Paul Ryan (R-WI) according to Fact Check.org.  Among the deceptive claims were these:

-  Obama claimed the Republicans’ "Path to Prosperity" plan would cause "up to 50 million Americans "¦ to lose their health insurance." But that worst-case figure is based in part on speculation and assumptions.

-  He said the GOP plan would replace Medicare with "a voucher program that leaves seniors at the mercy of the insurance industry." That’s an exaggeration. Nothing would change for those 55 and older. Those younger would get federal subsidies to buy private insurance from a Medicare exchange set up by the government.

-  He said "poor children," "children with autism" and "kids with disabilities" would be left "to fend for themselves." That, too, is an exaggeration. The GOP says states would have "freedom and flexibility to tailor a Medicaid program that fits the needs of their unique populations." It doesn’t bar states from covering those children.

-  He repeated a deceptive talking point that the new health care law will reduce the deficit by $1 trillion. That’s the Democrats’ own estimate over a 20-year period. The Congressional Budget Office pegged the deficit savings at $210 billion over 10 years and warned that estimates beyond a decade are "more and more uncertain."

-  He falsely claimed that making the Bush tax cuts permanent would give away "$1 trillion worth of tax cuts for every millionaire and billionaire." That figure — which is actually $807 billion over 10 years — refers to tax cuts for individuals earning more than $200,000 and couples earning more than $250,000, not just millionaires and billionaires.

-  He said the tax burden on the wealthy is the lowest it has been in 50 years. But the most recent nonpartisan congressional analysis showed that the average federal tax rate for high-income taxpayers was lower in 1986.

You may say, “hey, those aren’t really that big of a deal – they’re not giant fibs”.  Well yeah, they are – and collectively they paint a completely false picture of both the Ryan plan and the Obama plan  because the way he presented each was to try to present them in such a way that you bought into the premise his falsehoods painted.

Had he just stuck with the facts, the GOP’s wouldn’t have sounded too bad and his wouldn’t have sounded very good (for instance the claim that ObamaCare will save $1 trillion assumes the “doc cut” will actually be made when there is absolutely no indication it will ever be made).

So he just made stuff up out of thin air or presented it in a highly-partisan way to make it sound much worse than it is.

We should expect better than that from the President of the US shouldn’t we?

And wasn’t he the guy who promised such “hope and change” in DC with his administration?  That’s one campaign promise (among many others) that simply will never get the green checkmark in the box beside it.  It is a complete and total “no-go”.

~McQ

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Nanny and the “Kinder Eggs”

I hope everyone one had a bright and sunny Easter (or Passover)weekend and were able to enjoy it with their family and friends.  It was nice to take a day off from just about everything.

Mark Steyn’s kids apparently didn’t get the opportunity to enjoy it in the way they wished.  Apparently as the family tried to reenter the US from Canada, our sharp eyed border agents protected them from something that they didn’t even realize was a threat.  Yes, friends, Nanny took away the kid’s “Kinder Eggs” to protect them from a potential choking hazard:

Late last night, crossing the Quebec/Vermont border, my children had two boxes of “Kinder Eggs” (“Est. Dom. Value $7.50″) confiscated by Customs & Border Protection.

Don’t worry, it’s for their own safety. I had no idea that the United States is the only nation on the planet (well, okay, excepting North Korea and Saudi Arabia and one or two others) to ban Kinder Eggs. According to the CBP:

Kinder Chocolate Eggs are hollow milk chocolate eggs about the size of a large hen’s egg usually packaged in a colorful foil wrapper. They are a popular treat and collector’s item during holiday periods in various countries around the world, including those in Europe, South America and even Canada. A toy within the egg is contained in an oval-shaped plastic capsule. The toy requires assembly and each egg contains a different toy. Many of the toys that have been tested by the Consumer Product Safety Commission in the past were determined to present a choking hazard for young children.

And yet oddly enough generations of European and Latin American children remain unchoked. Gotta love that “even Canada”, by the way: Is that an implied threat that Kinder Egg consumption is incompatible with participation in NORAD or membership of NAFTA?

Obviously Nanny doesn’t feel that Steyn is enough of a parent to supervise his children’s consumption of this confection and the CPC, enforced by the CBP have decided no parent in the US is qualified or should be allowed to have this product. Steyn is obviously an unfit parent just for allowing the little tykes to buy the eggs, no? 

And just to make you feel safer, they keep stats of how many eggs they’ve confiscated, because, you know, it’s all "for the children".   Always nice to be able to tout how vigilant you’ve been with confiscating kid’s confections even while the border remains a super-highway for illegal immigrants:

The Food and Drug Administration has issued an import alert for Kinder Eggs, because they are a confectionery product with a non-nutritive object imbedded in it. As in years past, CBP, the Food and Drug Administration and CPSC work in close collaboration to ensure the safety of imported goods by examining, sampling and testing products that may present such import safety hazards. Last year, CBP officers discovered more than 25,000 of these banned chocolate eggs. More than 2,000 separate seizures were made of this product.

I assume some smart bureaucrat will at some point translate that into a claim the lives of 25,000 children have been saved, or some such nonsense.  They could use that to at least justify in their own minds the unwarranted intrusion into the role of the parent, or something, right?  Not that they’ve felt a need to justify that in the past (I wonder what Nanny thinks of Cracker Jacks?).

Speaking of intrusion, you had better secure your WiFi network if you haven’t already – otherwise ICE’s SWAT team may be planning a visit, especially if you have a pervert for a neighbor. 

But be thankful today – Nanny is on the case and Kinder Eggs shall not touch your child’s lips.

Don’t you feel so much safer and secure?

~McQ

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