The subsidized government loans artificially lowers the cost of college, which has the effect of increasing BOTH supply and demand for college degrees. Trading out subsidized loans for private loans will put the cost of college back at its economically real price and decreasing number of students and demand for degrees.
However, I don't think this economics 101 description is sufficient to describe what is really happening. Supply of college degrees has been artificially increased in a sort of self-replicating process. The government triggered it by deciding that all people need to have access to college if they choose, and they instituted a combination of policies (Pell grant, subsidized loans, etc.) to make this happen. Well a lot of extra people did indeed go get that degree to get higher wages, and employers found that they could more easily demand a college degree from applicants. And also this degree would not entail paying them as much as it used to, because the degree is not as rare as it used to be. As more employers demanded degrees, more people had to go to school to get a degree. Here is where the key thing happens. These people have been ABLE to get the degree because they have a guaranteed student loan from the government, and so even more college degrees flood the market and the cycle repeats.
If it had been a private student loan system, and that private system was working responsibly, then they would have drastically slowed down providing student loans a long time ago, and the college degree numbers would have corrected. If a private loan system was not working responsibly then you get basically the same effect as the housing bubble.
Germans employ more part-time workers than basically any other country. This causes the raw statistics of average hours per week and total unemployment to become distorted. In order to do that they actually subsidize part-time employment, so they do in fact pay for the increased inefficiency through higher taxes. All of this works for them because they are strong in other ways. Like you mentioned I was incorrect to say they have open economic policies internationally. Regardless, that's not what we're arguing about here, it's enough to say we both agree the Germans are doing well.
I realize the topic of this story was unions, but I'm not really talking about them. Unions are both good and bad. We've used laws to distort the operations and purposes of unions in the name of consumer protection. But as a tool for creating an actual middle class they served their purpose well.
You seem to be making all of this about wealth and who deserves a high quality of life, and I haven't said one word about that. My only point is that some people are more capable at things like designing robotics or delivering mass information than others. And if the trend continues, then there will be a few people providing the 'needs' for everyone else. The rest of the people might be living on handouts and doing nothing, they might be making music and teaching martial arts, and some of them might very well have a lot of money doing such things.
Greece is the country which has exhibited your suggestions the most completely, and you see the results there. Germans barely work less than we do, and their economy is so strong because they do business openly on international markets.
I'm a pharmacist (not a systems analyst, no idea where you got that), and as such I know full well the challenges of proving worth in the economy of scale. I certainly don't assume that I will be in the 1% of producers or whatever the number is. Remember that I'm predicting the future, not trying to analyze where we are at now. And the fact is everything from farming to teaching is becoming more automated, and in many fields 1 person can carry the work of 100. But that 1 person should be the best person, and he should be doing all the work if you want to be as efficient as possible. Humanity will strain against over population in the future, and the highest level of efficiency will be demanded in order to push that conflict further away.
Some people don't want to work less hours you know, but by the tone of your arguments I wouldn't expect you to be one of them.
We have shortage of workers in many of the engineering and skilled professions. I think the reason is that the path towards greater automation requires fewer but more skilled workers, and we are getting to a point where the average person just can't do it no matter how much his education is subsidized.
At the terminus of this trend we will have a few people supporting the life sustaining needs of the masses. But for now, few consider receiving a handout and doing nothing a high quality of life. So we have a lot of make work.
I would say that because of the easy availability of student loans, demand has been artificially increased. That doesn't explain why real tuition cost is still rising, but I think traditional supply and demand economics just isn't robust enough to explain the education industry because of the amount of cultural influence and government interference.
delta(G) = delta(h) - Tdelta(S) is the equation you are talking about I guess.
Clearly the entropy of a system can be decreased during a spontaneous process if it is exothermic enough. I see you do refer to it giving off waste heat, which is necessary, but that's not the same. As far as I know cosmologists have not determined the source of order in the universe, and so you cannot say that heat is just an abstraction of entropy.
Unions have their place. It is to ensure a fair working environment and fair compensation. Their place is not to preserve obsolete modes of operation, which is a question that can be resolved at the level of the individual. If the individual teacher doesn't want his job to become obsolete, then prove that automated online instruction is not a replacement for his skill. The fact is that an online education from a good teacher is often a lot better than the education a student would get from a weak teacher.
Perhaps a better phrasing on my part would have been to say "faster than technology is guaranteed to react". There will come a time when technology and oil discovery will not react sufficiently. The market will react instead, and that will be the crisis.
I don't know the real numbers but just to illustrate, lets say we have 1 trillion barrels of oil remaining to produce (pull out of the ground). And a steady state growth of production of 7%, which is realistic and implies a doubling of oil production every decade. And lets say our current rate of production is 1 billion per year. It will take a little more than 6 decades to produce 500 billion barrels of oil, half of all remaining oil.
The important detail is that under these conditions it will also be true that we have 500 billion barrels remaining of potential oil 10 years before all oil is gone. But 500 billion barrels of oil is the amount of oil that was consumed in all 6 previous decades. So oil is not scarce at 10 years before depletion, so there is no strong incentive for technological advance. Not until 5 years maybe, or maybe 4, or maybe 3 does it become apparent that there soon won't be any oil because oil is now difficult to find. The result is that oil price skyrockets over a year or two, and our way of life is dramatically "altered" because this whole time consumption has been growing and growing along behind production.
What can technology do to compensate? lets say in that last decade a technological advance made 500 billion new barrels of available oil, increasing by 50% all the oil seen in 7 decades. Remarkable! But as you can see, production must still plummet, or we will have no remaining oil in just a few years beyond the old limit. Can technology double the efficiency or gross total of our oil every 10 years forever? It can only mitigate the effects when our energy needs suddenly outstrip all potential for new oil.
the reasonable eco people you "don't understand" have a better solution, which is to quit trying to maintain 7% growth of oil production every year. Without the steady state growth, technology and the market will have plenty of time to react smoothly to resource scarcity.
I always wonder why econuts are so desperate to ensure that the petrol economy is sustainable.
The reason is because even a seemingly modest steady state growth towards the depletion of a finite resource, such as 7% per year, comes up on you pretty damn fast. Faster than technology can react to compensate. And then you get a dangerous crisis on your hands, which might have been avoided with a bit more foresight.
The FCC has not compelled AT&T to offer service to his parents yet, the point is to decide whether AT&T should be forced to or not. The current state of ISP regulations is not providing the perfect solution because there are people with no service. The question then, is whether we can get a better result by enforcing stiffer regulation. Maybe we can, and maybe we can't. And of course there is never an actual 'free market' in the United States, but referring to it just means point to a state of lesser regulation.
My point was that the exact reason we hear so much about topics related to infrastructure and health care and energy production, is because these are all industries where a free market, at least such a free market as we have, tends to break down. In the USSR, big news tended to be things like scissor shortages. Our system is freaking wonderful for making the exact right amount of scissors.
who would oversee maintenance of this infrastructure? I guess the only entity left with any reason to do it would be the government itself. This would lead to massive inefficiency and bloated costs when public funds are already quite strained. I do agree that infrastructure is one of those special circumstances where the free market just breaks down, and it requires intelligent regulation. But I don't think it should be nationalized.
I agree that an abundance of competition will drive the price towards cost as compared to a lack of competition. But there is no reason to believe that the competitive price will necessarily closely approach the cost. There is as much competition for text messages as there is for laundry detergent where I come from. Unless there is some sort of collusion between the telecom companies, then I don't think competition is what causes the disparity.
The loose relation that I speak of is only that the price/unit will never dive below the cost/unit. Not without a subsidy anyway.
Perhaps not a constitutional authority, but the government has a responsibility to regulate situations where the free market breaks down. The obvious situations where this happens are utilities, health care, and to some extent the externalities caused by the energy industry. And I'm considering ISPs a utility in the case of land-line providers.
The thing about price setting is that it is only very loosely related to the cost of production. SMS messages are a rather extreme example of this. They exist is abundance precisely because they cost almost no money for the carrier to produce, and consumers are willing to pay relatively a lot of money for them. I do not understand how it came to be that consumers are willing to pay so much, but it is that way.
I guess what I mean is that it is absolutely a moral thing for them to set the price how they wish, and if people are willing to pay such high prices then it just means they have a really good product on their hands.
Reverse the situation. If a text message cost $1 to produce and no consumer was willing to purchase a message for more than $0.50, then they simply would not exist. It is not the carriers responsibility to take a loss on his product in order to force its existence.
Imagine if your power provider wanted to charge different prices for your power based on whether you used it for toasting bread or watching TV; even further, what if it charged more for your toaster power if you used a brand of toaster that has not paid the power company for 'better' rates. The courts would never allow such a business practice.
No doubt the cost of Fukushima will be huge. I expect TEPCO will bear a large portion of the burden on the damaged reactor itself. There is also the evacuation of the exclusion zone and cleanup/abandonment of high radiation areas, which TEPCO probably won't have to pay for. But this will be small compared to the cost of the tsunami itself.
I'm sure there will be more nuclear disasters, and there will be more disasters related to oil and gas as well. Coal is a disaster in itself without any isolated incidents. But we're going to need at least one of them to power the world regardless. I think nuclear has the fewest externalities. Even though it does have some obviously. if AGW is real then there is no doubt it is the best option.
The article cites no reference for that figure of C7.6 trillion. And it doesn't even say which freaking reactor he's talking about! how can you just accept something like that as fact? Terrible journalism is what it is.
What did they decide was the worst-case scenario? A nuclear explosion (impossible by the way)? A direct meteor impact on the plant?
Compared to the processes used by the oil industry, nuclear is not harder to control. The track record shows far fewer out of control events related to nuclear than both hydroelectric and oil. As for an enormous impact on our health, consider that coal power releases significant amounts of toxins into the air and ground worldwide and that is under normal operation. This certainly has an unmeasured deleterious effect on nearly everyone's health.
The problem you mention is a problem for both the nuclear and carbon-based power industries, but it is far less significant for nuclear. Nuclear isn't perfect, but it is the best we have.
As for cost effective, if carbon based power was paying for the externalities it causes, then nuclear would be looking a lot better to you.
Yes, but the MPAA are arguing that piracy is hurting their profits. And the FBI is arguing that piracy is encouraging production. Apples and oranges kind of.
While I agree with the sentiment. The MPAA and RIAA are claiming that by pirating copyrighted media you are hurting the profits of the media producers, not necessarily hurting the production of those materials. I guess they sometimes go on to appeal to public opinion by saying this will cause an end to the production of their media, but this isn't the legal basis of the infringement punishments.
Still, I agree that the GP's statement "By trading it your encouraging it." is unsupported.
Freed from the normal constraints of supply and demand, tuition prices are no longer tracking closely to the cost to provide an education. They're more closely following what students are willing to pay.
Errr, in a normal competitive market, tuition cost is supposed to follow what the student is willing to pay. It's up to the education provider to make sure their cost is less than what they are getting paid. Otherwise the transaction/business just won't exist. The whole purpose of the subsidies and whatnot is to force that transaction (the education) to exist, so that people get educated. The price of top-level education is already below the cost, as others have pointed out, because it is subsidized already. What I guess you are advocating is to subsidize it even more, but this needs to be justified somehow by proving that we need more/better engineers and that this will sufficiently increase the standard of living for most members of the public.
The actual reason for public education is to benefit all members of the society by making sure each individual has a basic ability to make informed decisions about what individuals they elect and what products they choose to buy and so on. They can't do this without being about to at least read. It is very arguable as to how high level of an education the general public needs to do this, or at least where the costs begin to outweigh the benefits.
Well the definition is useful because when peak oil is reached the supply unavoidably begins to decline (unless supplemented from outside sources, which is what the U.S. did in the 70's), thus increasing prices.
The Saudis, and Canadians, and Brazilians who sell us oil are all capitalists and just want to make as much money as possible. They will screw us over if that coincides with their goal, but no more so than if American capitalists were providing our oil supplies. It is not a bad thing that we get most of our oil from foreign sources.
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The subsidized government loans artificially lowers the cost of college, which has the effect of increasing BOTH supply and demand for college degrees. Trading out subsidized loans for private loans will put the cost of college back at its economically real price and decreasing number of students and demand for degrees.
However, I don't think this economics 101 description is sufficient to describe what is really happening. Supply of college degrees has been artificially increased in a sort of self-replicating process. The government triggered it by deciding that all people need to have access to college if they choose, and they instituted a combination of policies (Pell grant, subsidized loans, etc.) to make this happen. Well a lot of extra people did indeed go get that degree to get higher wages, and employers found that they could more easily demand a college degree from applicants. And also this degree would not entail paying them as much as it used to, because the degree is not as rare as it used to be. As more employers demanded degrees, more people had to go to school to get a degree. Here is where the key thing happens. These people have been ABLE to get the degree because they have a guaranteed student loan from the government, and so even more college degrees flood the market and the cycle repeats.
If it had been a private student loan system, and that private system was working responsibly, then they would have drastically slowed down providing student loans a long time ago, and the college degree numbers would have corrected. If a private loan system was not working responsibly then you get basically the same effect as the housing bubble.
Germans employ more part-time workers than basically any other country. This causes the raw statistics of average hours per week and total unemployment to become distorted. In order to do that they actually subsidize part-time employment, so they do in fact pay for the increased inefficiency through higher taxes. All of this works for them because they are strong in other ways. Like you mentioned I was incorrect to say they have open economic policies internationally. Regardless, that's not what we're arguing about here, it's enough to say we both agree the Germans are doing well.
I realize the topic of this story was unions, but I'm not really talking about them. Unions are both good and bad. We've used laws to distort the operations and purposes of unions in the name of consumer protection. But as a tool for creating an actual middle class they served their purpose well.
You seem to be making all of this about wealth and who deserves a high quality of life, and I haven't said one word about that. My only point is that some people are more capable at things like designing robotics or delivering mass information than others. And if the trend continues, then there will be a few people providing the 'needs' for everyone else. The rest of the people might be living on handouts and doing nothing, they might be making music and teaching martial arts, and some of them might very well have a lot of money doing such things.
Greece is the country which has exhibited your suggestions the most completely, and you see the results there. Germans barely work less than we do, and their economy is so strong because they do business openly on international markets.
I'm a pharmacist (not a systems analyst, no idea where you got that), and as such I know full well the challenges of proving worth in the economy of scale. I certainly don't assume that I will be in the 1% of producers or whatever the number is. Remember that I'm predicting the future, not trying to analyze where we are at now. And the fact is everything from farming to teaching is becoming more automated, and in many fields 1 person can carry the work of 100. But that 1 person should be the best person, and he should be doing all the work if you want to be as efficient as possible. Humanity will strain against over population in the future, and the highest level of efficiency will be demanded in order to push that conflict further away.
Some people don't want to work less hours you know, but by the tone of your arguments I wouldn't expect you to be one of them.
We have shortage of workers in many of the engineering and skilled professions. I think the reason is that the path towards greater automation requires fewer but more skilled workers, and we are getting to a point where the average person just can't do it no matter how much his education is subsidized.
At the terminus of this trend we will have a few people supporting the life sustaining needs of the masses. But for now, few consider receiving a handout and doing nothing a high quality of life. So we have a lot of make work.
I would say that because of the easy availability of student loans, demand has been artificially increased. That doesn't explain why real tuition cost is still rising, but I think traditional supply and demand economics just isn't robust enough to explain the education industry because of the amount of cultural influence and government interference.
delta(G) = delta(h) - Tdelta(S) is the equation you are talking about I guess.
Clearly the entropy of a system can be decreased during a spontaneous process if it is exothermic enough. I see you do refer to it giving off waste heat, which is necessary, but that's not the same. As far as I know cosmologists have not determined the source of order in the universe, and so you cannot say that heat is just an abstraction of entropy.
Unions have their place. It is to ensure a fair working environment and fair compensation. Their place is not to preserve obsolete modes of operation, which is a question that can be resolved at the level of the individual. If the individual teacher doesn't want his job to become obsolete, then prove that automated online instruction is not a replacement for his skill. The fact is that an online education from a good teacher is often a lot better than the education a student would get from a weak teacher.
Perhaps a better phrasing on my part would have been to say "faster than technology is guaranteed to react". There will come a time when technology and oil discovery will not react sufficiently. The market will react instead, and that will be the crisis.
I don't know the real numbers but just to illustrate, lets say we have 1 trillion barrels of oil remaining to produce (pull out of the ground). And a steady state growth of production of 7%, which is realistic and implies a doubling of oil production every decade. And lets say our current rate of production is 1 billion per year. It will take a little more than 6 decades to produce 500 billion barrels of oil, half of all remaining oil.
The important detail is that under these conditions it will also be true that we have 500 billion barrels remaining of potential oil 10 years before all oil is gone. But 500 billion barrels of oil is the amount of oil that was consumed in all 6 previous decades. So oil is not scarce at 10 years before depletion, so there is no strong incentive for technological advance. Not until 5 years maybe, or maybe 4, or maybe 3 does it become apparent that there soon won't be any oil because oil is now difficult to find. The result is that oil price skyrockets over a year or two, and our way of life is dramatically "altered" because this whole time consumption has been growing and growing along behind production.
What can technology do to compensate? lets say in that last decade a technological advance made 500 billion new barrels of available oil, increasing by 50% all the oil seen in 7 decades. Remarkable! But as you can see, production must still plummet, or we will have no remaining oil in just a few years beyond the old limit. Can technology double the efficiency or gross total of our oil every 10 years forever? It can only mitigate the effects when our energy needs suddenly outstrip all potential for new oil.
the reasonable eco people you "don't understand" have a better solution, which is to quit trying to maintain 7% growth of oil production every year. Without the steady state growth, technology and the market will have plenty of time to react smoothly to resource scarcity.
I always wonder why econuts are so desperate to ensure that the petrol economy is sustainable.
The reason is because even a seemingly modest steady state growth towards the depletion of a finite resource, such as 7% per year, comes up on you pretty damn fast. Faster than technology can react to compensate. And then you get a dangerous crisis on your hands, which might have been avoided with a bit more foresight.
The FCC has not compelled AT&T to offer service to his parents yet, the point is to decide whether AT&T should be forced to or not. The current state of ISP regulations is not providing the perfect solution because there are people with no service. The question then, is whether we can get a better result by enforcing stiffer regulation. Maybe we can, and maybe we can't. And of course there is never an actual 'free market' in the United States, but referring to it just means point to a state of lesser regulation.
My point was that the exact reason we hear so much about topics related to infrastructure and health care and energy production, is because these are all industries where a free market, at least such a free market as we have, tends to break down. In the USSR, big news tended to be things like scissor shortages. Our system is freaking wonderful for making the exact right amount of scissors.
his point was that there is no "free market" or the "free market" has broken down here, as is so often the case when dealing with infrastructure.
who would oversee maintenance of this infrastructure? I guess the only entity left with any reason to do it would be the government itself. This would lead to massive inefficiency and bloated costs when public funds are already quite strained. I do agree that infrastructure is one of those special circumstances where the free market just breaks down, and it requires intelligent regulation. But I don't think it should be nationalized.
Then let them have satellite!
I agree that an abundance of competition will drive the price towards cost as compared to a lack of competition. But there is no reason to believe that the competitive price will necessarily closely approach the cost. There is as much competition for text messages as there is for laundry detergent where I come from. Unless there is some sort of collusion between the telecom companies, then I don't think competition is what causes the disparity.
The loose relation that I speak of is only that the price/unit will never dive below the cost/unit. Not without a subsidy anyway.
Perhaps not a constitutional authority, but the government has a responsibility to regulate situations where the free market breaks down. The obvious situations where this happens are utilities, health care, and to some extent the externalities caused by the energy industry. And I'm considering ISPs a utility in the case of land-line providers.
The thing about price setting is that it is only very loosely related to the cost of production. SMS messages are a rather extreme example of this. They exist is abundance precisely because they cost almost no money for the carrier to produce, and consumers are willing to pay relatively a lot of money for them. I do not understand how it came to be that consumers are willing to pay so much, but it is that way.
I guess what I mean is that it is absolutely a moral thing for them to set the price how they wish, and if people are willing to pay such high prices then it just means they have a really good product on their hands.
Reverse the situation. If a text message cost $1 to produce and no consumer was willing to purchase a message for more than $0.50, then they simply would not exist. It is not the carriers responsibility to take a loss on his product in order to force its existence.
Imagine if your power provider wanted to charge different prices for your power based on whether you used it for toasting bread or watching TV; even further, what if it charged more for your toaster power if you used a brand of toaster that has not paid the power company for 'better' rates. The courts would never allow such a business practice.
No doubt the cost of Fukushima will be huge. I expect TEPCO will bear a large portion of the burden on the damaged reactor itself. There is also the evacuation of the exclusion zone and cleanup/abandonment of high radiation areas, which TEPCO probably won't have to pay for. But this will be small compared to the cost of the tsunami itself.
I'm sure there will be more nuclear disasters, and there will be more disasters related to oil and gas as well. Coal is a disaster in itself without any isolated incidents. But we're going to need at least one of them to power the world regardless. I think nuclear has the fewest externalities. Even though it does have some obviously. if AGW is real then there is no doubt it is the best option.
I'll look for more info on that study I suppose.
The article cites no reference for that figure of C7.6 trillion. And it doesn't even say which freaking reactor he's talking about! how can you just accept something like that as fact? Terrible journalism is what it is.
What did they decide was the worst-case scenario? A nuclear explosion (impossible by the way)? A direct meteor impact on the plant?
Compared to the processes used by the oil industry, nuclear is not harder to control. The track record shows far fewer out of control events related to nuclear than both hydroelectric and oil. As for an enormous impact on our health, consider that coal power releases significant amounts of toxins into the air and ground worldwide and that is under normal operation. This certainly has an unmeasured deleterious effect on nearly everyone's health.
The problem you mention is a problem for both the nuclear and carbon-based power industries, but it is far less significant for nuclear. Nuclear isn't perfect, but it is the best we have.
As for cost effective, if carbon based power was paying for the externalities it causes, then nuclear would be looking a lot better to you.
Yes, but the MPAA are arguing that piracy is hurting their profits. And the FBI is arguing that piracy is encouraging production. Apples and oranges kind of.
While I agree with the sentiment. The MPAA and RIAA are claiming that by pirating copyrighted media you are hurting the profits of the media producers, not necessarily hurting the production of those materials. I guess they sometimes go on to appeal to public opinion by saying this will cause an end to the production of their media, but this isn't the legal basis of the infringement punishments.
Still, I agree that the GP's statement "By trading it your encouraging it." is unsupported.
Freed from the normal constraints of supply and demand, tuition prices are no longer tracking closely to the cost to provide an education. They're more closely following what students are willing to pay.
Errr, in a normal competitive market, tuition cost is supposed to follow what the student is willing to pay. It's up to the education provider to make sure their cost is less than what they are getting paid. Otherwise the transaction/business just won't exist. The whole purpose of the subsidies and whatnot is to force that transaction (the education) to exist, so that people get educated. The price of top-level education is already below the cost, as others have pointed out, because it is subsidized already. What I guess you are advocating is to subsidize it even more, but this needs to be justified somehow by proving that we need more/better engineers and that this will sufficiently increase the standard of living for most members of the public.
The actual reason for public education is to benefit all members of the society by making sure each individual has a basic ability to make informed decisions about what individuals they elect and what products they choose to buy and so on. They can't do this without being about to at least read. It is very arguable as to how high level of an education the general public needs to do this, or at least where the costs begin to outweigh the benefits.
Interestingly, I was taught discrete mathematics at NCSU by one of the inventors of the plasma screen.
Well the definition is useful because when peak oil is reached the supply unavoidably begins to decline (unless supplemented from outside sources, which is what the U.S. did in the 70's), thus increasing prices.
The Saudis, and Canadians, and Brazilians who sell us oil are all capitalists and just want to make as much money as possible. They will screw us over if that coincides with their goal, but no more so than if American capitalists were providing our oil supplies. It is not a bad thing that we get most of our oil from foreign sources.