Debt, not equity

Aligning Compensation Incentives in Higher Education: Is Higher Education Debt or Equity?

It’s debt. You can’t sell a degree or use it as collateral. So, it’s debt… or more precisely, it’s a set of wildly overpriced consumer services that is marketed as a product and is usually paid for with a particularly onerous form of debt. So, however you want to describe it, “equity” isn’t a reasonable way to do so. Sweet Black’s, but how I despise lawyers. They are very seldom anywhere nearly as clever as they would like to believe themselves to be.

The debt police

It’s interesting to see how the education sector is one that is leading the move towards debt-based totalitarianism. Student loans are about the only loans that aren’t discharged by bankruptcy, and I tend to doubt that the Department of Education’s SWAT teams (!?!) are going to be invading any homes over unpaid credit card debts:

Kenneth Wright does not have a criminal record and he had no reason to believe a S.W.A.T team would be breaking down his door at 6 a.m. on Tuesday.

“I look out of my window and I see 15 police officers,” Wright said. Wright came downstairs in his boxer shorts as the officers team barged through his front door. Wright said an officer grabbed him by the neck and led him outside on his front lawn. “He had his knee on my back and I had no idea why they were there,” Wright said….

Wright said he later went to the mayor and Stockton Police Department, but the city of Stockton had nothing to do with Wright’s search warrant. The U.S. Department of Education issued the search and called in S.W.A.T for his wife’s defaulted student loans.

This raises numerous questions:

1. Why is the U.S. Department of Education permitted to issue warrants or call SWAT teams?

2. Why would the SWAT team assault an individual who is not responsible for the debts?

3. Upon which specific date was America pronounced dead?

If this doesn’t convince you that the U.S. Constitution is dead, America is dead, and we are watching the galvanic twitchings of a corpse, I don’t know what will. Personally, I’m rather looking forward to the first press conference by the Department of Education explaining why they accidentally killed an old woman who never went to college over the unpaid student loans of some clueless wonder with a useless college degree.

Of course, the youfs are so utterly stupid that even events like this won’t slow down the rate at which they are applying for student loans. Because an education is the best investment anyone can possibly make….

Homeschool or die vol. 7

If any other activity was this directly connected to increasing the teen mortality rate, it would be illegal:

Every two hours, a teenager in America takes his or her own life. Suicide is the third leading cause of death among youth, and the rate of teen suicide has roughly tripled since 1960…. Scientists have identified many contributing factors: Discrimination, the number of sexual partners, substance abuse, being dumped by a romantic partner, parental divorce, child physical and sexual abuse, bullying and even excessive video-gaming play a role. Scholars at the University of Chicago’s National Opinion Research Center have offered a novel contributing factor to teen suicide: high school.

In a careful and persuasive paper released last fall called “Back to School Blues: Seasonality of Youth Suicide and the Academic Calendar,” Benjamin Hansen and Matthew Lang point out that suicides for 14- to 18-year-olds drop abruptly during June, July and August.

“The decrease in suicides for 14- to 18-year-olds during the summer months is stark, while the 19- to 25-year-olds see a slight rise in suicide rates during the summer,” the authors point out. “The fact that 15- to 18-year-old suicide rates decrease in the summer, but the 19-year-old suicide does not, suggests that the high-school calendar is playing a prominent role in youth suicide,” they conclude.

Given that the summer vacation reduces the teen suicide rate from 6.22 per 100,000 to 4.71, this means that banning public school would save 1,092 lives per year. This is far more lives than can be saved by most of the usual actions advocated by the save-the-children crowd. Since we are so often told that various laws are justified if just one child’s life is saved, and we also know that homeschooling is an academically superior method of education, how can anyone possibly argue in good conscience that eliminating the public schools is not an imminent moral imperative?

Banning public school will save more children’s lives on an annual basis than every vaccination program put together, in fact, it would save more children’s lives than seatbelt laws and child safety seats. Banning public school, or at least barring public school attendance after sixth grade, would reduce the third leading cause of youth death by 25 percent. And let’s face it, it’s not as if they’re even learning how to read or do math there anyhow.

Econ doesn’t stick

This may explain why today’s economists are so hapless; they simply don’t know the relevant core principles:

Unfortunately, however, most students seem to emerge from introductory economics courses without having learned even the most important basic principles. According to one recent study, their ability to answer simple economic questions several months after leaving the course is not measurably different from that of people who never took a principles course.

What explains such abysmal performance? One problem is the encyclopedic range typical of introductory courses. As the Nobel laureate George J. Stigler wrote more than 40 years ago, “The brief exposure to each of a vast array of techniques and problems leaves the student no basic economic logic with which to analyze the economic questions he will face as a citizen.”

Another problem is that the introductory course is increasingly tailored not for the majority of students for whom it will be their only economics course, but for the negligible fraction who will go on to become professional economists. Such courses focus on the mathematical models that have become the cornerstone of modern economic theory. These models prove daunting for many students and leave them little time and energy to focus on how basic economic principles help explain everyday behavior.

But there is an even more troubling explanation for students’ failure to learn fundamental economic concepts. It is that many of their professors may have only a tenuous grasp of these concepts, since they, too, took encyclopedic introductory courses, followed by advanced courses that were even more technical.

It may sound cool, at least to dorks, to be a quant or a wonk. But all the technical expertise in the world doesn’t do you any good if you don’t get the core concepts right. That’s why, in RGD, I attempted to begin at the beginning and leave as much jargon and econometrics out of it as was reasonably possible. I was fortunate, as about half my econ professors had a fairly sound grasp of the core concepts. But given the more common nature of those who didn’t, it doesn’t surprise me to learn that their sort are in the majority. As I’ve mentioned before, I once met a nominal econ major from a big state school who had never heard of Keynes or the General Theory.

In defense of college

This Cracked commenter’s explanation of why college is worthwhile is more than a little amusing:

College sucked for the first two years for me (as in I was one phone call away from talking to an Army recruiter) but then I ended up studying abroad for a semester, meeting some really cool people and professors and took classes in my major (Rhetoric) which were really eye opening and awesome. I started out as a judgmental hyper-conservative p***k and four years later, here I am graduating in three weeks as a well rounded, tolerant atheist. I don’t mean to toot my own horn (although if I could, I would, heh heh) but I’m certainly much better off, mentally, than I was before college. To me that’s what makes my mountain of debt worth it.

So, there’s some good news and some bad news, Mom and Dad. On the one hand, your son is broke, unemployable, and hugely in debt. On the other, he’s now an atheist. It’s a pity college recruiters and high school guidance councilors are not similarly forthright about the statistically probable outcomes.

The other thing that is always rather funny about the comments following post-bubble articles about the value of college is the way most of the people attempting to defend it are still in college. Which is to say that they are presently enjoying the short-term benefits without taking the long-term costs into account.

Academia and the myth of matriarchy

Apparently if you believe in the perfectly logical and long-held philosophical concept that the universe did not simply appear ex nihilo for no reason, you are academically unfit, but it’s perfectly fine for academics to subscribe to the totally ahistorical notion that Man was once ruled by female committee:

There is no real evidence that humanity every passed through a stage in which society was matriarchal, and abundant evidence to the contrary. Goddesses, of course, appear frequently in the world’s religions and myths, but the notion of a great prehistoric cult of the Goddess in Europe connected to matriarchal rule has no foundation.

Why bring this up now? Because higher education’s relaxed attitude about appointing faculty members who not only believe but who actually teach this moonshine demonstrates the hypocrisy of those who say that faculty members are acting out of the need to protect the university from anti-scientific nonsense when they discriminate against conservative Christian candidates for academic appointment. The possibility that a candidate for a position in biology, anthropology, or, say, English literature might secretly harbor the idea that God created the universe or that the Bible is true, is a danger not to be brooked. But apparently, the possibility that a candidate believes that human society was “matriarchal” until about 5,000 years ago is perfectly within the range of respectable opinion appropriate for campus life….

I take it as one of the great intellectual scandals of our age that this nonsense has gained academic legitimacy. Hardly a soul who vehemently defends the university’s need to protect itself from the dangerous presence of Biblical literalists and the like sees anything amiss in having a whole tide of anti-scientific, ahistorical ideological fantasy claim the status of an academic discipline. Could there be a version of women’s studies sans the myth of matriarchal prehistory? Surely there could be, as there are substantial numbers of feminist scholars who reject that myth. But the field as a whole has not done so. If it is necessary that a candidate for an academic appointment in biology demonstrate competence in evolutionary biology, it ought surely be necessary that a candidate for appointment in women’s studies demonstrate show the ability to distinguish historical fantasy from fact.

I don’t expect that to happen anytime soon, but it is a useful thought experiment. Why won’t higher education hold women’s studies to ordinary standards of historical accuracy? Because contemporary American higher education cares far more about protecting its favored group of political ideologies than it does its standards of rational inquiry and scrupulous use of evidence. The standards are cited most conspicuously when they lend themselves to fencing off members of disfavored groups.

I’ve always found Sam Harris’s assertion that being a Christian somehow renders scientific work impossible to be an interesting one, considering that it is an intrinsically ahistoric and anti-scientific philosophical argument. And PZ Myers’s insistence that academics must subscribe to TEpNS dogma has always amused me, considering that he still subscribes to economic arguments that have been disproven for decades, and in some cases, centuries. If the standard that biologists wish to apply to other academics were applied to biologists on subjects such as economics or history, nearly every biology department in the USA would find itself empty.

A nation of cam whores

Lest you wonder what the teachers unions would do if they were given control over school curriculums:

The U.N. just concluded a two-week feminist jamboree — the Commission on the Status of Women, which is an intergovernmental body that negotiates documents later approved by the General Assembly. The CSW attracts scores of radical feminists — including this time a woman named Diane Schneider, representing the National Education Association. At a CSW panel discussion, Schneider said that “oral sex, masturbation, and orgasms need to be taught in education.” She also said students should not be able to “opt out” of such classes, meaning they should be forced to learn about orgasms against their parents’ wishes.

It’s an interesting situation, to be sure. On the one hand, if the NEA program worked according to plan, the USA would benefit from millions of young women who wouldn’t be educated to go into debt in order to obtain university degrees that would permit them to spend their fertile years making Powerpoint slides, but would be well-equipped to perform on the Internet instead. Which, I have to admit, would be an improvement, if not much of one. On the other hand, given the success with which the public school teachers are presently teaching most students how to read, write, and do math, one has to assume that at least half the female graduates would end up performing inadvertent clitoridectomies before graduation, the rest would end up frigid, and the boys would require Viagra just to get through a Playboy.

Never trust the experts

Zero Hedge underlines one of my personal maxims:

Confirming, yet again, that MIT Ph.D.’s (such as the FRBNY’s Brian Sack) are among the most dangerous around, a paper made the rounds yesterday by one Josef Oehmen titled: “Why I am not worried about Japan’s nuclear reactors.” In the ensuing 48 hours, anyone who listened to Josef’s advice (who incidentally is not a scientist) and was also “not worried about the reactors” has paid an exorbitant price, possibly up to and including their lives. We demand that MIT School of Nuclear Science and Engineering clarify their position on the matter, and make sure that incidents such as this, where Oehmen’s paper received top billing due to its perceived “endorsement” by MIT and has since been completely discredited, never recur.

Full paper as was originally posted:

I repeat, there was and will *not* be any significant release of radioactivity from the damaged Japanese reactors.

An expert is someone who is always correct when it doesn’t matter and usually wrong when it counts. This is one of the reasons why I never, ever, put any faith in credentials. Credentials are completely worthless, they’re not worth the paper on which they are printed. Experience is somewhat more useful, but when the experienced individual cannot provide clear and sensible answers to straightforward and logically sound questions, your BS radar should be sounding like a radiation alarm at a Fukushima nuclear plant.

How did that M.I.T. PhD-backed prediction hold up? “Dangerous levels of radiation leaking from a crippled nuclear plant forced Japan to order 140,000 people to seal themselves indoors Tuesday after an explosion and a fire dramatically escalated the crisis spawned by a deadly tsunami. In a nationally televised statement, Prime Minister Naoto Kan said radiation had spread from the four stricken reactors of the Fukushima Dai-ichi nuclear plant along Japan’s northeastern coast.”

And now we know what an assurance from an M.I.T. PhD is worth. How much less, then, is a PhD from a lesser school or in a less rigorous discipline to be trusted? What must always be kept in mind is that the expert’s primary motivation is not what most people assume it to be. Their main motivation is to sound credible rather than make an accurate judgment so they will always play the probabilities and state the obvious because this a) allows them to be correct most of the time, and b) only be wrong when everyone else is wrong.

Krugman is correct!

Will wonders never cease! Of course, I note that what he gets right is an observation on education and technology that has absolutely nothing to do with economics. It would appear his track record of uniform failure on that subject remains spotless:

It is a truth universally acknowledged that education is the key to economic success. Everyone knows that the jobs of the future will require ever higher levels of skill. That’s why, in an appearance Friday with former Florida Gov. Jeb Bush, President Obama declared that “If we want more good news on the jobs front then we’ve got to make more investments in education.”

But what everyone knows is wrong.

The day after the Obama-Bush event, The Times published an article about the growing use of software to perform legal research. Computers, it turns out, can quickly analyze millions of documents, cheaply performing a task that used to require armies of lawyers and paralegals. In this case, then, technological progress is actually reducing the demand for highly educated workers. And legal research isn’t an isolated example. As the article points out, software has also been replacing engineers in such tasks as chip design. More broadly, the idea that modern technology eliminates only menial jobs, that well-educated workers are clear winners, may dominate popular discussion, but it’s actually decades out of date.

It is actually not a question. Everyone is wrong to the extent that they believe education has anything to do with macroeconomic success, and this is easily observable even if one omits the technology factor. In Tunisia, for example, 57 percent of those entering the labor market have college degrees. The comparable figure in the United States is 30 percent. But the Tunisian unemployment rate among those college graduates is 45 percent, three times higher than the national rate. That’s why so many of them who participated in the recent revolt a) spoke English, and b) had the time to participate.

What those who make a fetish of education simply fail to understand is that knowledge – particularly knowledge of the sort that is sufficiently codified to be included in a college textbook – is not intrinsically valuable to anyone. It makes no difference to me if you happen to know the date of Agincourt, the periodic table of the elements, or the correct way to utilize Pascal parameters. Your knowledge of those things isn’t going to produce any value to me, since profit is only created through human action.

The fallacious idea underlying the link between education and economic growth is that expanding an individual’s knowledge base will enable him to engage in more economically productive action. But this completely depends upon a) what that knowledge is, b) the ability and willingness of workers to translate knowledge into action, and c) the utility of those actions in producing goods and services that customers want or need. In most cases, the education that is being provided fails on all three points.

Producing more lawyers, social workers, and Womyn’s Studies majors is not going to generate any productive economic activity, indeed, it is guaranteed to generate activity that will increase economic contraction by inhibiting the free flow of goods and services. Combine that with the development of technologies that will significantly reduce the need for human service providers such as lawyers, paralegals, engineers, and teachers, and there is a perfect storm of mass white-collar unemployment on the horizon, not only in the United States, but all around the world.

It’s because you collectively suck

Teachers are in shock at the contempt in which they are held:

The jabs Erin Parker has heard about her job have stunned her. Oh you pathetic teachers, read the online comments and placards of counterdemonstrators. You are glorified baby sitters who leave work at 3 p.m. You deserve minimum wage.

“You feel punched in the stomach,” said Ms. Parker, a high school science teacher in Madison, Wis., where public employees’ two-week occupation of the State Capitol has stalled but not deterred the governor’s plan to try to strip them of bargaining rights…. Around the country, many teachers see demands to cut their income, benefits and say in how schools are run through collective bargaining as attacks not just on their livelihoods, but on their value to society.

Even in a country that is of two minds about teachers — Americans glowingly recall the ones who changed their lives, but think the job with its summers off is cushy — education experts say teachers have rarely been the targets of such scorn from politicians and voters.

Perhaps the reason for this scorn might have something to do with little facts such as these:

About three-quarters of the 17,500 freshmen at the community colleges this year have needed remedial instruction in reading, writing or math, and nearly a quarter of the freshmen have required such instruction in all three subjects. In the past five years, a subset of students deemed “triple low remedial” — with the most severe deficits in all three subjects — has doubled, to 1,000. The reasons are familiar but were reinforced last month by startling statistics from state education officials: fewer than half of all New York State students who graduated from high school in 2009 were prepared for college or careers, as measured by state Regents tests in English and math. In New York City, the proportion was 23 percent.

I would argue that most public school teachers don’t even deserve minimum wage, for the obvious reason that they can’t do their jobs. Fire them all, tear down the system, and replace it with a technological spin on homeschooling for those parents who can’t homeschool. I guarantee the results would not merely be superior, but vastly superior.