Slashdot Mirror
Beating the College Bubble
An anonymous reader writes "The real estate bubble is long gone. Oil prices are sliding down. Are we in
an education bubble? The author of
Beating the College Bubble says so.
He's written a short, simple guide to avoiding the crushing college
debt that he thinks is about to bankrupt all of us. Just as easy loans encouraged people to dream big and buy a
McMansion, big college loans are tempting students with too much Comp Lit and Frat
Parties. When they graduate, the debt is so hefty that the students are stuck living
in their parents' basement for 10 years until they've paid it all off. I can
tell you from personal experience that there's some real truth to the hangover.
The beer headache is gone after a week, but the monthly payments just keep going." Read below for the rest of cdog40's review
Beating the College Bubble
author
C. Davis
pages
140
publisher
Edububble Press
rating
9
reviewer
cdog40
ISBN
1438235909
summary
Don't go to college. Save your money.
The author spells out why he wrote the book:
his kids are graduating soon and he wants to do the right thing. Should he encourage
them to spend big on an impressive, Cadillac-grade education or should he
be really cheap so they can be free of loans? Which will help the kids?
Chapter 2 works through a handful of examples of people who spent too much on education. Of course he brings up the fact that all of the big guys in the computer business skipped out on college after a few courses. Steve Jobs and Bill Gates started the trend and now it looks like Mark Zuckerberg is following in the famous footsteps.
The author writes out that some of the people in Chapter 2 really did benefit from their education. The lawyers and the doctors who sell their credentials did very well with fancy diplomas.
Chapter 3 is a largely obvious summary of what we all know: lots of college courses don't have any real use in the world. It's not as bad as jokes like: What do you call an English major? (Waiter!) The problem is that the Internet is very good at exporting bits and most college degrees specialize in manipulating bits. The Internet can and will ship this work to the lowest-wage countries in the world. So if you're interested in making money by manipulating bits, the Internet is going to cut you off at your knees. The real secret to making money he says is getting a career in something like sewer maintenance because that can't be exported despite what that famous Senator says about the Internet just being a bunch of pipes.
Chapter 4 is a great piece that explains where the money is going: into the pockets of the college presidents. Many of them make more than a million dollars a year in salary. Well, that's not all true. Some of it is going into the big, expensive buildings. Apparently long ago, students put on shows without fancy state-of-the-art, high-tech arts complexes. They just used an auditorium. No longer. Schools love to spend money on big-name architects. There's a good mention made of the high price tag, the bar, and the leaky roof at MIT's Stata Center.
Chapter 5 is a kind of a nice guy section added so the author couldn't be accused of being completely cynical and nasty. It points out that most schools aren't just spending the cash on the president's new yacht, but on things the students use like fancy dorms and swanky exercise rooms. I know this is true of my school. The dorms are much better. You can't even see the mortar between the cinder blocks any longer. He's still annoyed by this because all of the fancy features pump up the tuition bill.
Chapter 6 is where the book starts to get useful. He talks about how to negotiate for better terms on the debt or how to avoid picking up too much. You can pretty much skip Chapter 7 and move right on to Chapters 8 and 9 which describe how to save money by getting cut rate degrees or skipping college altogether.
I'm not sure whether I buy all of the techniques. He suggests that internet forums like Slashdot are more informative than a college classroom, something I'm not sure I believe. Yes, there's more discussion and the moderation system does a good job of shutting up that bossy know-it-all in the front row, but it would be nice to have a professor. I guess that's what they mean when we're supposed to read the article before commenting. Hah. No one did at my school either.
There are good ones. He tells of low-cost degree programs at most schools. You can save 80% of the price of going to Harvard, for instance. I think he's pretty honest about this because he does point out that you lose something when you take the cheap route. But freedom is just another word for nothing left to pay on your loans.
The book's website is trying to make the book interactive by posting new news stories and alternative solutions for college. It listed the new School of Everything as an alternative.
This is where the meat of the book lies. The only way to avoid getting hurt by a bursting bubble is to get out early. This book made me think long and hard about college. You can't go back and do a scientific experiment because you can only live life once. But I do think that's how he put it. We're really in love with the idea of college that we'll spend anything. It's like when you fall head over heels over some beautiful girl that you don't even know. Then you run up your credit card on an expensive meal to impress her only to find out that she's kind of snobby or flakey or just not interested in the right things (PS3, BitTorrent, Android, Erlang etc). When the bill comes a month later, you feel kind of dumb. This book is trying to help the next generation avoid that headache.
You can purchase Beating the College Bubble from amazon.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.
Chapter 2 works through a handful of examples of people who spent too much on education. Of course he brings up the fact that all of the big guys in the computer business skipped out on college after a few courses. Steve Jobs and Bill Gates started the trend and now it looks like Mark Zuckerberg is following in the famous footsteps.
The author writes out that some of the people in Chapter 2 really did benefit from their education. The lawyers and the doctors who sell their credentials did very well with fancy diplomas.
Chapter 3 is a largely obvious summary of what we all know: lots of college courses don't have any real use in the world. It's not as bad as jokes like: What do you call an English major? (Waiter!) The problem is that the Internet is very good at exporting bits and most college degrees specialize in manipulating bits. The Internet can and will ship this work to the lowest-wage countries in the world. So if you're interested in making money by manipulating bits, the Internet is going to cut you off at your knees. The real secret to making money he says is getting a career in something like sewer maintenance because that can't be exported despite what that famous Senator says about the Internet just being a bunch of pipes.
Chapter 4 is a great piece that explains where the money is going: into the pockets of the college presidents. Many of them make more than a million dollars a year in salary. Well, that's not all true. Some of it is going into the big, expensive buildings. Apparently long ago, students put on shows without fancy state-of-the-art, high-tech arts complexes. They just used an auditorium. No longer. Schools love to spend money on big-name architects. There's a good mention made of the high price tag, the bar, and the leaky roof at MIT's Stata Center.
Chapter 5 is a kind of a nice guy section added so the author couldn't be accused of being completely cynical and nasty. It points out that most schools aren't just spending the cash on the president's new yacht, but on things the students use like fancy dorms and swanky exercise rooms. I know this is true of my school. The dorms are much better. You can't even see the mortar between the cinder blocks any longer. He's still annoyed by this because all of the fancy features pump up the tuition bill.
Chapter 6 is where the book starts to get useful. He talks about how to negotiate for better terms on the debt or how to avoid picking up too much. You can pretty much skip Chapter 7 and move right on to Chapters 8 and 9 which describe how to save money by getting cut rate degrees or skipping college altogether.
I'm not sure whether I buy all of the techniques. He suggests that internet forums like Slashdot are more informative than a college classroom, something I'm not sure I believe. Yes, there's more discussion and the moderation system does a good job of shutting up that bossy know-it-all in the front row, but it would be nice to have a professor. I guess that's what they mean when we're supposed to read the article before commenting. Hah. No one did at my school either.
There are good ones. He tells of low-cost degree programs at most schools. You can save 80% of the price of going to Harvard, for instance. I think he's pretty honest about this because he does point out that you lose something when you take the cheap route. But freedom is just another word for nothing left to pay on your loans.
The book's website is trying to make the book interactive by posting new news stories and alternative solutions for college. It listed the new School of Everything as an alternative.
This is where the meat of the book lies. The only way to avoid getting hurt by a bursting bubble is to get out early. This book made me think long and hard about college. You can't go back and do a scientific experiment because you can only live life once. But I do think that's how he put it. We're really in love with the idea of college that we'll spend anything. It's like when you fall head over heels over some beautiful girl that you don't even know. Then you run up your credit card on an expensive meal to impress her only to find out that she's kind of snobby or flakey or just not interested in the right things (PS3, BitTorrent, Android, Erlang etc). When the bill comes a month later, you feel kind of dumb. This book is trying to help the next generation avoid that headache.
You can purchase Beating the College Bubble from amazon.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.
I think a lot of it depends on whether you know what you want to do, whether you need a degree to do it or not, and whether you can find a reasonable priced school that teaches it (like a state school or start at a community college).
There are way too many people going to college just for the experience. In addition, many people don't think about how they will pay for it later. Not all degrees will raise your earnings enough to make it worthwhile.
On the other side of the issue is that there are many jobs that either really require a degree or are just impossible to get without one. Which is why it really depends on the person, the career, and the school.
What a wonderful message to send to all our recent high school grads.
This is not going to help any of us.
If you can read this, I forgot to post anonymously.
Education is a resource who's value is inflated through a systematized, artificial scarcity - especially at the graduate and post-grad levels.
Those with advanced degrees from 'elite' institutions have a vested interest in keeping their numbers limited and their relative status higher than their peers. This is graduated in degrees down through the system - which is designed and maintained by an economic and political elite to server their ends, maintained against the objectives of 'higher' learning by those most privileged.
What good did Harvard Business School education do for creating a better, more predictable and stable market environment? Nothing. This is one of a million examples. PhD. == Tool.
"Speaking the Truth in times of universal deceit is a revolutionary act." -- George Orwell
Everybody, including me, believed at some point that a college or university degree would bring fame and fortune... which is false.
Unless you study engineering or get a degree in a medical profession, you might get screwed. Oh, and you WILL get screwed with a liberal arts degree (sad for me and my psy major).
Meanwhile, some friends bring home tons of cash by being welders, linemen, plumbers and electricians...
Who is the smartest guy around? The guy that goes to university and studies something like philosophy or psychology, or the one who gets a professional welding formation and earns 75k+ per year?
Think about it...
The US can get ahead in the world economy by getting LESS education for it's populace. That way, we'll slowly start getting our manufacturing jobs back because India and China won't be able to compete. I mean, people over there can translate business logic into those magical bits faster and cheaper than here, right?
Personally, I didn't find out how much I liked Computer Science till Sophomore year of College. The theory and beauty behind how different sort algorithms was the turning point I think. Without College, I'd have settled on some part-time tech work and full-time retail employee. College has it's purposes and the masses still need higher education, whether they want it or not.
You want to not get a fuck-ton of college debt? Don't go to a school for prestige or a wife. Go to your local CC for a year then go to a local Uni to get your degree. Otherwise, study your ass in high school and get there on scholarship.
You want it to be easier for your kids? Get a 529 plan started TODAY. Contributions to it are be state and federal-tax free. You can get the money back out at regular tax rates if they don't go to school or get scholarships. I'm surprised that wasn't in the review. Just because you are getting the shaft doesn't mean your kids have to as well.
import system.cool.Sig;
Information can be gleaned very easily from the Internet, but knowledge and the mechanics of synthesizing knowledge are best learned in a university setting. I do agree that in many ways college costs have gotten out of control. It used to be you would goto college to be a school teacher. However, why would you spend $50,000 on job that is at best going to net you $35,000 out of the gate (other than someplace you would rather not teach and danger pay come to mind).
The university setting is best for individuals who need to do high-end problem-solving or research as part of their work not for vocations. Vocations are best learned in a setting where you can skip a lot and go straight to what needs to be known and add a few extras as well. My own family is a perfect example of what can be done through vocational training. My uncle who is dsylexic and color-blind was never great in high school. Instead of moving on to college like he may have been pushed today he went to a technical college where he floushied in electrical power and control and today has been designing power systems for commericial and industrial buildings for over 25 years.
For better or worse, college has become part of the American dream and many who do not belong there are now going. People are going not because they want to but they feel they need to in order to achieve the American dream. The more we due to de-emphasize the idea that college is the only answer and supplement it with apprenticeships, vocational training, etc. , the better will do for all our children.
Can't agree with you more. I came from India, with enough money to pay for first semester tuition. I got a part time job (paid $7/hr) to pay for the living costs. I managed to live off of about @ $300/month. For two and half years I lived like a monk. Even then I owed $8000 to different credit card companies and some $12000 to a bank. I paid that off in four months after getting my first job.
Take it from someone like me (call it exotic if you wish), but you don't have to live in your mom's basement for 10 years, if you use your money wisely. Don't spend on frivolous things if you don't earn anything. As simple as that.
Oh yeah, I'm sure that'll go over well with potential employers.
...
Boss: Where did you get your degree?
Applicant: I don't have one, but I read a lot of stuff some university posted on its website.
Boss:
Boss: You have no clue how the world works, do ya?
Why do rich bankers get bailed out for billions but the rest of us get stuck with $50K in student debt?
Because, like it or not, the health of the economy doesn't directly hinge on your ability to comfortably pay back your student loans (unlike, say, AIG, who's failure would have untold repercussions throughout the financial industry).
Basically, the government fucked up and let these companies get too big to fail while turning a blind eye to their shenanigans. And now they're forced to bail them out. It's just that simple. It sucks, to be sure, but that's the reality. Bitching and complaining won't change it.
First, skip the 4 year program. The first year of college is just a sieve for partiers and a way for the college to collect a lot of tuition without doing any work. Anytime you sit in a class with 600 of your closest friends, you know you're being taken. Most community colleges offer a two year prep program, which will transfer to a 4 year college. Gets most of the bullshit courses out of the way for MUCH lower prices.
Second, there are two ways to make money in this world. Do something other people CAN'T do, or do something other people WON'T do. There's a reason that brain surgeons and attractive prostitutes get paid so much. A 4 year degree may or may not put you into one of these categories, but so can a 2 year degree.
Finally, the statistics that say a college degree will allow you to make twice as much money over your lifetime. Bullshit! Motivation will allow you to make more money, and it just so happens that motivated people are more likely to finish college. But that statistic may soon be a historical anomaly as degrees will become less directly tied to income when everyone has one.
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba
If you want to pay for a brand name college, I'm not going to stop you. Their are plenty of schools like the University of Minnesota that have great engineering programs and although I can't walk into an interview and drop a name like MIT, I don't mind proving I'm worth what you want to pay.
The advantages of a brand name school have almost -nothing- to do with the quality of the education itself.
The advantages are simply:
1) It may get you interviews over someone else, due to brand name recognition, for example he might shortlist the one from MIT over a similar candidate from from U. of Minnesota. If he finds a satisfactory canditate from that short-list, you might never get the interview.
2) The more prestigious the school, the more prestigious the -other- students tend to be. And who you met there that you might not otherwise have met is usually far more valuable than what you learned there that you might not otherwise have learned.
IT isn't quite as 'who you know not what you know' as politics or law, but IT has its celebrities and movers and shakers too, and knowing someone high in the ranks at Google or Sun or Apple or IBM or wherever still opens a lot of doors. Your choice of school impacts your odds of knowing the next generation of these people, or meeting these people's kids (although again, unlike politics etc IT isn't nearly as dynastic...)
But then not everyone on slashdot is in IT either, not by a longshot.
My MBA not only got me in the door at this Fortune 100 company, but it got me an extra $25k/year over my coworkers who do the same thing as me without the MBA.
You say you were lucky, being able to funciton on very little sleep, for instance. You're saying your situation is the exception to the rule. I'm just trying to point out that many people simply cannot perform these sorts of things. I literally go nuts after about a month of 5-6 hours sleep and stop being able to physically function, for instance.
In defense of college: For most of us, we've spent our entire lives in school, so the next step is college. It's simply expected of all the people that went to my high school.
To piss off the non-collegiates: I know a fair number of people who never went to college. Many of them are snobby about how they didn't get "taken in by it" or that they're "just not college material". Incidentally, many of them could contribute A LOT to an academic setting.
I also hear many parents and grandparents say their kids aren't college material. This trend bothers me. How else can people get a solid grounding in a wide range of the basics that underpin our ability to both learn and critically reason? High school helps a little, but falls short imo.
Although I am saddled with a fair amount of debt,about 20K, my college experience was useful. No, I didn't learn a bunch of real world skills (was in Comp Sci, and looking back it would ahve helped a lot to learn real world skills, though I took a lot of different other types of classes). I did, however, learn a lot about interacting with people(this email certainly shows!), understanding HOW to learn LOTS of different types of information, and most importantly I learned many different points of view.
What I find with non college-goers sometimes is a certain ignorance or narrow-mindedness. Their way, much of the time, seems to be the only way and all others be damned. Some of these people have had success with their jobs, though many I know are still working at Kinko's or Jimmy John's ten years later. Would the non-college achievers be better off if they had gone to college? I don't know.
I know I've written something that in itself is a bit narrow and probably sounds ignorant (I'm really fishing for other viewpoints, in a hamfisted, non-college kind of way), so I have a creeping feeling that I've shot this part of the discussion in the foot.
I may have wasted a LOT of time in college, yes. Was it a worthwhile transition between school and life instead of just being thrown to the wolves in the real world? Did it teach me MANY ideas that I've used to further my career and relations with others that I NEVER would have learned without college? Did it teach me an appreciation for all the different types of people who make the world function? Yes, yes, and yes.
Encouraging people not to go to college because it has nothing to offer seems like telling people not to get their driver's license because they're 16 and where do they need to go at this age anyway? It's very shortsighted in most instances, I feel. There's your car analogy!
-
Because this isn't Venezuela or the USSR... yet.
You realize that $30k loans for a $6k/semester school leaves $18k the student had to come up with some other way -- probably out of pocket. That's assuming he was actually able to complete his program in 8 semesters.
That's over $4k a year the student is paying for his own expenses. If we assumed full time work at $10 an hour -- not too bad for college work -- that's not even $20k a year before taxes. You're talking about over 25% of the student's free income from a full time job. JUST TO PAY for what the student loans wouldn't.
And you're questioning why would someone borrow $30k total for a $6k/year school?
I'm seriously wondering how could they not? And in fact, how did the manage to pay for it all ONLY borrowing $30k?
"That which does not kill us makes us stranger." -Trevor Goodchild
Because this isn't Venezuela or the USSR... yet.
Yeah because Venezuela or the soviets spent way more than 700 G$ on their financial sector. Oh wait ...
I credit the fact that I can make a decent living on the fact that I not only went to college, but when my first degree wasn't doing it for me I went back again and got another degree. My first ever "real job" that wasn't in retail grew out of an internship I had while I was getting my second degree, and all my jobs since then have come from the fact that I was able to get real world experience to put on my resume.
I have some pretty big regrets about mistakes I made during my life, it's never even occurred to me to put college in there.
On the other hand, I did have a lot of help from academic scholarships and money my family saved for it (as well as my employer later on). I never had any debt from that.
However, I'm living with horrible debt now, which came from a relationship as opposed to college. I think that the debt "industry" (some industry, it's primary product is poor people) will find a way to get at people until it is properly regulated.
"MIT betrayed all of its basic principles."
well, the assets of Sallie Mae are student loans, so if you forgive all the student loans and nationalize their assets, you'll end up with nothing.
Maybe it's time that as a country we have a serious conversation to everyone that believes they're entitled to a car, house, college education, or lifestyle they can't afford.
Do you even lift?
These aren't the 'roids you're looking for.
As someone who goes to a not-top-20 school (but still decent, i.e. regional school), let me clear up a few things. The median starting salary for private practice from my school is over 80k. The number of graduates who go straight into private practice is ~70% minimum. The competition is not cutthroat at all. If anything, I'm the one doing the throatcutting, and I'm generally a laid back kind of guy.
All that, and I literally CANNOT take out over 100k of loans much less 200k. I think I top out at 96k for the full 3 years, and in practice I'm borrowing much, much less.
Yes, you should always analyze the numbers behind every important decision you make, but law school elitism fucking kills me. You can be happy and well-to-do without going to Harvard or Yale. Of course, you'll be much better-to-do if you do, but that doesn't mean the top three choices should be harvard, yale, and welding school.
Maybe it's the dreams that are in err? I graduated with no debt at all. Ooh, hard.
Why don't we forgive? Because no one held a gun to their heads. WTF is some people's idea about forgiving stupid decisions, thus penalizing others who didn't make bad ones? How about this instead? Let the stupid pay for their mistakes and the smarter ones get ahead. Those are the ones we want succeeding you know.
Shooting a few of the CEO's who got it into that mess would sure make me feel better, though. Or at least jabbing them with a sharp stick.
My blog. Good stuff (when I remember to update it). Read it.
The rule there, I'll take your word. The rule in the workplace in general, numerically not possible.
Not to get too far off topic, but I am in a similar position with debt.
Although my dad and I own a business, between all the debts they and I have racked up (medical, educational mainly) we are strapped to the max. One day I'll get out form under it (one month at time), and once I do I'll be living alright, but you're right: debt is an industry, and it really is terrifying.
-
Far from being the solution, the government is the problem, yet again. While government-guaranteed student loans have expanded college access, any economist worth his salt will tell you that by flooding the college market with loans that anyone can get and that are guaranteed by the government has led to tuition well outpacing inflation. What else could have caused this?
If this sounds really familiar, it should. Fannie Mae and Freddie Mac had a similar effect on the housing bubble. So you'll have to excuse me if I get frightened when I hear "government to the rescue" for a problem it helped create.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
It is like the word "gay" in video games. When I was first introduced to the word online back on me ol' dial up connection playing Counter Strike people called each other "gay" and "faggot" all the time. After a little while, it was not derogatory to homosexuals.
And getting gyped isn't derogatory
nor is it to jew down a price
and indian giving is totally neutral.
Here's a clue -- a bigoted turn of phrase is at its most derogatory when the people using it accept it as just part of the vernacular and don't question it at all because that means their society has so completely accepted the bigotry to the point where they don't even notice it as being abnormal.
In before "your just a homophobe": I like lesbians and bi-sexual girls. My favorite bands include Judas Priest and Queen. Marriage is a LEGAL institution and in the US that means separate from religion. Prop 8 is unconstitutional and will eventually be overturned. It needs to have never been voted into law.
Yeah, and I have many black friends too.
When information is power, privacy is freedom.
Student loans are the modern day equivalent of indentured servitute: Just a step away from slavery.
The problem is that we're pushing them into this as a society. It's not that these kids are stupid, we're just telling them "the only way to succeed in life is to go to college x" where college x costs far more money than they have. Then we tell them "Well everyone gets a student loan", so they assume it's a good idea. Instead of just screwing people over like this, we need to start teaching people that not everyone needs to go to college, very few people need to go to Harvard, and they will do just fine at a community college.
From my experience in academia, I think one of the best ways to reduce college debt would be to bring back co-op educational programs, particularly for IT and engineering majors. In recent years, American universities have transitioned almost completely from quarters to semesters, which has consequently destroyed co-op programs across the country. Thirty years ago, a student could work and go to school on alternating quarters, in many cases making enough money to cover most or all of his/her educational costs, and graduate in just 5 to 6 years. (The summer quarter was a regular teaching quarter just like fall, winter, and spring quarters.) Furthermore, the co-op student got absolutely invaluable experience while learning what industry was really like before graduation.
Now every school has transitioned to semesters, mainly to cut administrative costs. Consequently there are only two teaching semesters a year as opposed to four teaching quarters, resulting in a drastic reduction in course variety, and making co-op programs impossible to manage as many essential electives are now taught only once a year. And even if a school did offer a co-op program, a student would need 8 years to graduate!
So if you want to make college cheaper for more students and increase the number of graduating students in engineering, lobby for the return of the quarter system and the restoration of co-op programs. Too bad if the registrar's office now has to process course registration and grades four times a year instead of two. College programs should be structured for the benefit of the students, not the convenience of the administration.
Not that I condone the forgiving of college loans even though I carry a significant burden of debt in from my degree achievements, I would think that of the things listed (car, house, education, lifestyle) that education is one thing we want to make as prolific as possible within our society. A more educated public means that we can advance technology, status, solve problems better, and hope to steward this little rock of ours well enough to sustain our species over the long term. Maybe it's time we also took a look at the alarming rise of tuition and wonder just what we get out of such an inflated figure.
And that is the essence of the problem, is it not? How can a a political establishment so obsessed with "national security" let a market of an estimated $60 trillion dollars (almost 5 times our national GDP) go completely unregulated? It's absurd...
No terrorist in Guantanamo (or Afghanistan, for that matter) could ever do this much damage to the country, and yet none of those responsible will ever be executed, waterboarded, or undergo "extraordinary rendition." Funny how that works, huh? While we were all arguing over Dick Cheney's ticking time bomb hypothetical scenarios, the nation's economy was being set up for the largest act of sabotage and fraud in human history, and not a single person has yet to be arrested for it.
I'd be surprised if even a single CEO or government official ever gets convicted over this. And even if they do, we won't see a cent of their ill-gotten gains. Take a look at Kenneth Lay, mastermind of the Enron fraud. The man just so happened to conveniently die after his conviction but before his sentencing. The result? His conviction was wiped from the records and none of his or his wife's assets were seized.
Justice. Does the word even have a place in our society any more?
-Grym
Why do rich bankers get bailed out for billions but the rest of us get stuck with $50K in student debt?
Because, like it or not, the health of the economy doesn't directly hinge on your ability to comfortably pay back your student loans (unlike, say, AIG, who's failure would have untold repercussions throughout the financial industry).
Specifically, letting AIG fail would allow some forbidden things called capitalism and social mobility. When the Politburo prevents unsuccessful businesses from failing, they simultaneously prevent the emergence of stronger systems, because capitalism is inherently dependent on businesses failing when they are engaging in unprofitable behaviour. This creates social mobility by providing empty market niches for competitors who could not otherwise enter the market due to high startup capital requirements. The hereditary boardroom class do not want social mobility and therefore they do not want true capitalism.
Essentially, bailouts prevent the self-correcting functions of the marketplace which would normally prevent formation of plutocracy
Do y'all get it yet?
Basically, the government fucked up and let these companies get too big to fail while turning a blind eye to their shenanigans. And now they're forced to bail them out. It's just that simple. It sucks, to be sure, but that's the reality. Bitching and complaining won't change it.
Since "the government" purposely created the "crisis" by releasing the orginial Paulson bailout request, I have to laugh.
This is just last-minute profit-taking by the Bush/Cheney crony system. It's probably been planned for five years or more.
How on earth did you make 30+k per year to afford college? That's the average tuition right now. I sense that you either went to college a while ago or had some serious help.
Those of us who worked through college and still ended up with lots of debt take exception that is was a stupid mistake considering we now make enough to pay our debts and live a good lifestyle.
The problem is that college is sold as a way to a better life so a lot of people are in college that shouldn't be and they are the ones that end up with a lot of debt and nothing to show for it.
a bigoted turn of phrase is at its most derogatory when the people using it accept it as just part of the vernacular and don't question it at all because that means their society has so completely accepted the bigotry to the point where they don't even notice it as being abnormal.
I think the exact opposite is true. A phrase is at its least derogatory when it is so ubiquitous that even those that were once being degraded are no longer aware they should be offended.
That is the point when the word or phrase has reached cultural neutrality.
A word is at its most derogatory when it is used with full malice and prejudice.
It is an unfortunate circumstance when ignorance of the original meaning of a word or phrase allows its use to become commonplace in an alternative vernacular.
Yep. The Lunch Lady shouldn't have bought a house, and the guy with the 900 SAT score shouldn't have gone to college. Film at 11. Vo-tech at 12. The return of a decent highschool education at 1? Oh now... we're all too drunk from credit, and have fallen asleep by then.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
Right, and since a Harvard education is the best there is (generically speaking, not so for engineering, e.g., substitute MIT or other institution as you please), shouldn't the government send us all *there* for free?
The USA only has socialism for the rich, as they are the ones who need it the most. Us lower classes have to get by on hard work alone. I mean, you don't really expect the rich to lift a finger or have to take responsibility, do you? That would be the death of the American dream.
The American dream of course being to lie, cheat, steal, or do anything else it takes, possibly including work (THE HORROR!), to make it to the top where you can also completely ignore any and all responsibilities to society.
"Empathise with stupidity, and you're halfway to thinking like an idiot." - Iain M. Banks
Yes... as if he's the only one who believes an AIG collapse would be devastating. ::rollseyes:
BTW, ever heard of the phrase "ad hominem fallacy"?
It is ironic you should say that because
(a) Stating that an author has an inherent bias due to having money in the game is not ad hominem
(b) Calling someone eye-rollingly stupid for not believing you is ad hominem
Plenty of people believe AIG is too big to fail, many do so merely because they take the word of people like Michael Lewitt. If you really wanted to support your claim, clearly you should have cited the opinion of someone without a vested interest in only presenting one side of the argument.
Excellent! So I suppose you have data and a good theory to back your bold claims? Or are you, perhaps, just talking out of your ass?
There are numerous reasons to believe the AIG bailout is an error. However, the most obvious one is the same reason used to justify the bailout - that AIG is too big to fail. If that premise is true, then obviously AIG has a defining and central role in the US and world economies. Yet the bailout has now placed control over such a massively key piece of market infrastructure into the hands of the government, in complete violation of the principles of the free market. It moves us ever closer to a command and control economy for which there are numerous examples of failure and of the relatively few examples of success, they are all on a micro-scale, like singapore, when compared to the US economy.
When information is power, privacy is freedom.
I think that there's huge value in liberal arts education - and in some ways I got a better technical education than friends who went to school someplace well known with "Tech" in the name....
More than that, I simply cannot understand the logic in borrowing huge money for a degree that qualifies for a job that pays too little to service the debt!
People should look at college/university in terms of an investment. There's no reason to spend a bajillion dollars on undergraduate education, unless you plan to make your career in education and the "brand" of the degree matters - or the connections you'll make in school really matter - like the friend who went to Wharton for his MBA - because in that market, that name matters. (Incidentally, he went to Wharton after working in industry for a few years, setting aside money to pay for the tuition there.)
Other than that, students should work and save money before college, then go to community college for the core credits, then go to state school for their major credits - working during breaks to earn cash to minimize the need for debt.
Why kids think that they are entitled to go to an expensive school, borrowing a crushing amount of money in the process, while trying to party like a rock star and buying endless streams of consumer junk they can't afford (like iPhones) is beyond me. Kids need to learn to live within their means - and that includes education!
But Herr Heisenberg, how does the electron know when I'm looking?
That would explain why college education is less expensive per capita, and of comparable quality, and free across much of Europe. Oh, wait...
Any economist worth his salt will also tell you that giving out government loans to private institutions that exist purely to make a profit will always lead to price increases, while service industries like education, health care, local utilities, etc, are almost always better served by a single entity, regionally operated, that has no profit motive.
The only problem is when the false idea - that free markets solve all problems efficiently - is run up the flag pole, again and again, despite evidence to the contrary.
It's much easier to have an open government institution providing common necessities than it is to try and regulate private institutions that have no public interest, yet receive massive public funds. If you're serious about finding a solution, all you have to do is look around, and see what other countries have been doing successfully for years.
Everyone here laughed and laughed that the European governments charged a 100% tax on fuel, until about a year ago. Since those countries foresaw the inevitable, that tax reduced consumption, funded mass transit construction, and made them less dependent on countries like Saudi Arabia for their daily transportation needs. Here it would be called socialism; elsewhere, it's just common sense.
The problem there is moral hazard. What you've proposed is essentially a targeted gift specifically for the worst players in the industry (both borrowers and lenders). If you're going to put money in to bail out failed business ventures, you have to do it in such a way that you're not rewarding bad behavior.
Ideally, you recapitalize the bad lender, taking it over and diluting or wiping out the sharedholders in the process. Restructure what loans you can (and it's a nasty trick--probably not very doable in this environment) and let the bad ones go bust. Keep the lender alive and paying its debts until things start to return to normal and sell it back off. The end result is that you avoid a system-wide collapse, the people who did dumb things generally didn't make out very well, and you--the bailer--end up only putting in about as much money as is required to keep things moving. This solution often freaks people out because it looks like The Evil Red Hand of Socialism, but it's less catastrophic than the free-market model and less likely to repeat itself than the corporate welfare model.
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
How about this then: It's a bad idea because people, in particular "young professionals," should be responsible for the own damn debts and if they build it, while getting drunk and voting for Obama, then they should deal with it.
There's a lot of disinformation out there regarding the nature of the financial crisis, and I can see how one might have such an opinion. However, I have made a genuine effort to research this issue and I can assure you that, as difficult as it may be to believe, our government did allow a 60 trillion dollar market, in the form of, modern OTC derivatives to exist completely and utterly unregulated.
In fact, this market was so "free" that that figure--60 trillion--is actually just an estimate (some go as high as 600 trillion). Nobody knows just how much money has been tied up in what was essentially bets between the mega-rich about the rise and fall of company values. Even crazier, not even the companies themselves know the others' positions because the information is secret. As a result, they've stopped lending to each other, the so-called "credit freeze" or more pleasant euphemism "lack of confidence."
Before you label others ignorant or a revisionist, please educate yourself on this issue. If you think Fannie Mae (an institution which has been around since the Great Depression) was the cause of all this, you have been misled. You need to ask yourself why you have been deceived and whose purpose does this lie serve.
-Grym
Also,
Another hidden premise of "high taxes remove freedom". Where do you get these ideas, man? Nobody removes the "freedom of driving" by taxing it, and you straight-up ignored all the positive points he said.
I could go on, but you've given so little backing to any of your points past stating them, I think it's best to just leave it at that.
I'm not against rich people, but let me give a bit of the other side.
First, if you are going to compare pay, don't compare wages -- even a slaveowner must feed his slaves; even a farmer must feed his cattle. Compare discretionary income. Now, considering discretionary income, I would argue that most US laborers without a college education work far harder for their dollar, than any of the manager's class and up. I say that, while working with them. Let's then toss into the mix, 2nd and 3rd world laborers, and the difference becomes extreme.
Don't believe me? Let's try a sanity check. Typical career wage earner makes about $12/hr or less where I work in Hampton Roads. So we're talking $12 x 2000 hr/yr = $24000. With overtime, that used to be about $30k, though right now it's typically undertime, at $20k or less. Now, in this area apartment rent takes a minimum of about $700/mo = $8400. Most wage earners never had a chance to buy into that housing bubble. Food for 2 (taking a typical family size of 4) is about $50/wk = $2500/yr. Childcare is another $8000. Electricity is $1000. Phone is $500, minimum. So we'll estimate that the wage earner makes 24k, and spends $20500. So his discretionary income (pre-recession/depression) is $3500. He works 2000 hrs, or makes $4.50 of discretionary income a day. He'll need to be careful with that $4.50, because it also has to cover his vehicle costs, though I'm assuming he lives locally. If he drives farther, he can reduce his rent, but those costs typically balance out. I think if you run a similar sanity check on the manager's discretionary income, it's a tad more.
But now, let's also get down to another issue: the rich say they've earned the right to it, because they've gone after it. Okay, I can get down with that argument, but only insofar as everyone chooses to go after something, and they'll eventually get what they're after (typically speaking). But that does not mean that they've earned the right to profits that were made by others. What I typically see is that the profits are made at the manufacturing level. Cuts are also made, there, but they shouldn't be.
What I mean, is that if they are not paying a living wage to their employees, or if they are not meeting OSHA standards, then they don't deserve those extra profits. But that is often where the profits come from. Even layoffs, to increase profits, is not acceptable, because much of the economic mass of the company is derived from those workers you are laying off, and you are separating those workers from the economic mass that they earned. In other words, you are stealing from them.
So I'm not saying that the rich are horrible, the rich don't deserve to be rich ... but I do not agree with Limbaugh or other pseudo-conservative talkshow hosts who basically want the world to pander to their greed. Let the rich be rich, and let them enjoy a better standard of living -- but don't agree with them that they have the right to force others into a standard of death - which is much what has happened in this last century.
To paraphrase John Paul II, this last century has developed into a war by the powerful against the weak.
That includes the rich against the poor. Think about it.
Correct Horse Battery Staple: 72 bits of entropy. Enter "Correct H" into google. When it generates the phrase, that's