We should be way more willing to straight up kill multi-billion dollar industries. Without that willingness, most modern problems are impossible for governments to solve, and such industries and even their potential competitors are incentivised mostly to exacerbate the problem. I love a good market as much as anyone but there really are problems
markets will never solve
But…the whole point is that it is NOT a market. If student debt is dischargeable and the government guarantee is removed or dramatically reduced, pretty much all problems are “solved”.
Universities will have to start focusing on ROI. Universities that provide a poor ROI will shut down. Universities will need to reduce costs for traditional coursework, cut courses with poor returns, add courses with higher returns.
The inflation in higher education that has run rampant due to subsidized demand being removed.
> Universities will have to start focusing on ROI.
In Europe, they have a simpler system. Education is paid for from taxes. If a student does well, they pay for it via taxes. If they don't, then they aren't crippled by debt.
The problem with the ROI approach is it still places too much burden on the student, and, well, life happens. Say you major in comp sci (or some other high-paying field) but shortly after graduation something happens which prevents you from working in the field. Sucks to be you.
And likewise it sets up universities to, as you say, "cut courses with poor returns." Like for example "teaching", because school teacher pay is crap, so it has a poor ROI.
I would imagine in Europe they select more carefully the students whom will go to College. Here in the US we've told students that everyone must go to College. We now have too many people in College and many of them aren't going to be successful once they are in. It's not sustainable. In many of our public universities, the graduation rate is well below 50%
> I would imagine in Europe they select more carefully the students whom will go to College. Here in the US we've told students that everyone must go to College
You imagine wrong. Pretty much everyone goes to university in most and European countries. Even in wildly tourist dependent places, a degree in tourism is a normal thing for a young person to pursue before going to work at hotels/restaurants.
If those students/graduates move to other European countries (which they mostly do), they'll be counted in their destination country, evening things out.
Where did you get the idea most Europeans get a degree?
> If those students/graduates move to other European countries (which they mostly do), they'll be counted in their destination country, evening things out
If they move to the Netherlands, the NL will only count what % of its citizens have degrees, not everyone else (because many may go back or move elsewhere after finishing their studies, you can't count them easily alongside the rest of your population; students are usually counted as some sort of temporary resident, if counted at all). And then there's also the UK which is a top study destination for Eastern Europeans.
> Where did you get the idea most Europeans get a degree
I come from one EU country, live in another, have friends from all over the EU, have visited as a student and now working adult. Most young people pursue degrees, even in forestry or tourism or whatever topic. Of course some will fail getting them, but 30% of under 30s is absurdly low for stats to be reliable.
It‘s a pretty efficient (and quite unique) system. People learn to do their job at a normal company and attend school for usually two days a week. And they can still switch to the university track later without starting from the beginning.
> Say you major in comp sci (or some other high-paying field) but shortly after graduation something happens which prevents you from working in the field. Sucks to be you.
That's why the article's saying you should be able to declare bankruptcy.
> And likewise it sets up universities to, as you say, "cut courses with poor returns." Like for example "teaching", because school teacher pay is crap, so it has a poor ROI.
Teaching is relatively well paid and there are huge numbers of jobs. It's highly likely that a teacher could repay loans. There are plenty of degrees far less capable of providing employment than teaching.
I think most people would agree with me in saying the European model sounds pretty swell compared to forcing people into declaring bankruptcy because of economic/personal factors potentially out of their control, while also inserting an incredible amount of volatility into the entire university system that would make long term institutional planning much less possible.
Be careful what you wish for. The majority of my fellow engineering graduates would not have gotten an engineering degree in Germany.
They would have flunked the first year - a weed out year - and then been forced into a technical diploma program and not be allowed to call themselves engineers.
My friend who went to the German school said they have a target of flunking half the students that first year. Funds are limited and shape how many can graduate.
And in the US, bankruptcy doesn't help with the student debt, so if the majority of your debt is student loans, there's really nothing that can be done other than die to get rid of them. And I'm 100% certain that if the student loan - industrial complex could saddle relatives and kids with that debt after death, they'd sure go after that too.
Many will agree, but that's part of the reason why the US has a 50% higher GDP with 30% lower population. Focusing on well-beeing, fun and experience comes at a price.
The U.S. GDP per capita is behind Norway, Ireland, Switzerland, and these countries are known for low cost and excellent education.
What do you mean about 30% lower population? How is that relevant? You’re quoting a per-capita stat, the population was already factored out. And you’re comparing a single country to 27 countries. Makes zero sense.
Not to be argumentative (really ), but that's borderline nonsensical; you're comparing a profession to a broad category of educational attainment. Teachers typically have a degree in the humanities. What other profession is so commonly viewed as underpaid?
Sure -- though that's almost just two ways of describing the same thing. If teachers were paid $500k, few would describe them as overworked, and if they only had to work 4-hour days (with current salaries and benefits), they might be fairly compensated.
In the USA, the government also pays for education. That’s part of the problem, in fact. Since the loan to the college is always paid for by the government, the college is effectively handed a blank check. Said check, now filled in with an arbitrarily high amount, is handed to the student as a bill to pay back to the government. The same is done in your system, in fact, except that the entire country suffers that burden, regardless of if that degree actually amounts to any meaningful contribution.
>In Europe, they have a simpler system. Education is paid for from taxes. If a student does well, they pay for it via taxes. If they don't, then they aren't crippled by debt.
That's all well and good for the student, but what about for taxpayers/governments who's funding that education?
>And likewise it sets up universities to, as you say, "cut courses with poor returns." Like for example "teaching", because school teacher pay is crap, so it has a poor ROI.
Sounds like the solution is to raise teacher pay, which would also have the added benefit of retaining teachers after they graduate. Giving teachers cheap training but paying them poorly seems worse than the status quo because you end up shoveling money into training teachers that'd end up dropping out anyways.
> That's all well and good for the student, but what about for taxpayers/governments who's funding that education?
We can say the same thing about K-12 education -- it's just something we choose to fund collectively, because that's the kind of society we want to be.
But also, progressive taxation means that the rich fund it more than the poor. So the general idea is that if law school and medical school are expensive to provide but result in vastly higher salaries, then it gets paid for in the end out of those lawyers' and doctors' taxes. Not the taxes from average Americans.
>We can say the same thing about K-12 education -- it's just something we choose to fund collectively, because that's the kind of society we want to be.
But in K-12 education, the taxpayer/state has strong control over what's taught. In the last few years there's some latitude by the students, but nothing close the panoply of programs offered by universities. If education is state funded, but only for programs with proven ROI (eg. STEM), I'd be fine with that.
When the state pays, what matters is the ROI to the state. There is a need for teachers, social workers, and people familiar with various cultures, but the market will never pay them well.
Public funding models often have incentives for delivering the degrees the state wants. For example, there could be field-specific quotas for degrees. The university gets paid for each degree up to the quota, but not for exceeding the quota. That can have interesting effects in fields that are popular but in low demand. For example, the acceptance rate to psychology can be as low as 2-3%.
Progressive taxation isn’t even necessary. If someone makes $10,000 and is taxed 10%, they give up $1,000. And if someone makes $10,000,000 then they give up $1,000,000.
It isn’t necessary, no, and in fact a flat super simple tax code would probably result in more tax revenue. However, since politicians like the power of the tax code, and because the wealthy like a complex tax code for all the loopholes, and since ordinary people like the idea of those wealthier than them paying more tax as a percentage of their income, then we’re never going to get a simple tax code.
And absolutely the same logic can and should apply for universities - there can be private exclusive institutions, but the majority should be affordable and mostly paid for by taxes.
This already is the case. 75% of student debt is private universities and colleges.
If you get into Stanford but can't afford it, a loan seems like a good idea, but in reality the loan eligibility should consider the degree and future earning potential (along the same lines of how banks qualify other types of loans).
If we simply cancel student debt or remove private colleges' ability to charge a market rate the result will be no more private colleges (similar to other countries with fully publicly funded education). In these countries you typically have a national exam that determines where you go, or you have to lottery in to a school if it isn't in your district.
A country's which population is educated, usually bodes well, unless it's an authoritative govt one, in which case dumbing down the population is the way (from the govt POV, at least)
Say you major in comp sci (or some other high-paying field) but shortly after graduation something happens which prevents you from working in the field. Sucks to be you.
And if you’re a nurse or a police officer or a teacher or a lawyer and you lose your license under specious circumstances, it really sucks to be you.
Simpler isn’t always preferable: note that the key feature from the consumer perspective in that system is
> you pay no matter what
Meaning if it’s assumed “despite learning little, you still will be able to pay for it”, there’s no longer any motive force towards quality, as your payment is assured. Incentives on taxpayers thereafter who want to minimize their tax burden would therefore be optimizing primarily toward cheapness of the educational process, rather than efficacy and quality of the education which outbound students received.
A vigorous market for education, would suggest you would likely get a variety of nodes along a “costliness to quality” options frontier.
> there’s no longer any motive force towards quality, as your payment is assured
There are many excellent European universities, including ones which have been around for centuries, telling me there are ways to handle your concerns.
> A vigorous market for education
How's that Corinthian Colleges degree working out? Costly and no quality. And exactly the life-crippling outcome we should expect in a 'vigorous market'.
This is non-responsive to my point. Pointing out that paid universities like Corinthian in a grossly distorted market predictably are not very competitive offerings, or that good offerings can nevertheless still exist in heavily distorted markets, both fail to address that
> Current educational incentives caused by how payment is handled in these all-pay systems mean there is very little or no pressure exerted towards promoting an educational arms race towards quality, rather than minimizing cost to service that education.
In a more competitive market, yes, I believe you'd both likely see better European offerings, as well as substantially more compelling American paid offerings than the current batch of cash grab for-profit universities. They exist in their current form almost exclusively because financial lenders in the US have no incentive not to issue loans to students - even if the program is bogus, they are guaranteed re-payment.
This is a commonality shared between both current European offerings (via taxation guaranteeing repayment), and American alternatives (via guaranteed load repayment).
'In a more competitive market' sounds like an article of faith, akin to the No True Scotsman, where there's no definition of what is competitive enough until it meets the proponents' sniff test.
What would a sufficiently competitive market entail? Has it ever existed?
Would it look like modern US K-12 systems where commercial schools prioritize the most profitable students and leave the others to the public schools? Where good marketing beats good education?
How would it not be "heavily distorted" by impositions like Title 9 and other civil rights requirements? By government requirements on the school in order to receive state and federal money? By accreditation requirements?
This question being written as singular suggests to me you’re conflating some combination of education as a concept, education in America, and education in Europe. I see this as muddled thinking, they each have their own issues and their own timetables over which issues can and do exist.
Education history in Europe is actually decently hyperlocal and pretty path dependent for each country during the 19th and 20th century. Talking about it as a monolith is challenging, but there’s a pretty consistent pattern in societies with all-pay taxation-paid schooling that it has clear incentive structures that a school, having been “paid up front“, is not incentivized to put in the work to provide a high quality education, and as the financier of that education is the taxpayer, the pressure is primarily to keep costs low.
As for America, you don’t need much faith to believe that in the US instituting dischargeability would dramatically improve competition and quality in these spaces and the market for education - so yes, this market used to be substantially more competitive and used to exist. Since the 1970s when these laws were passed, student debt and tuition costs have skyrocketed, low quality for-profit university creation skyrocketed, and people have been hobbled with debt for degrees many are never going to pay back. Dischargeability reduces this greatly - it causes financiers to create motive pressure on education to not be a fiscal vampire preying on its students and equip them with meaningful trades and socially useful knowledge.
As for standards and regulations on schools, assuming the public sees fit to fund higher education through government spending, having requirements for a school to receive that government funding seems reasonable, so long as they reflect the desires of the local populace.
Ultimately, all this is a discussion of tradeoffs - I think someone can happily prefer
> everyone gets a free tertiary education paid for by their taxes
I think that it being free and paid-by-all means it’ll have low motive pressure towards quality and therefore be comparably mediocre to free elementary and secondary compulsory education, which even based on your own reckoning seems to be a two-tier system where the public institutions get short shrift - but you seem to care about it being free or less focused on fiscal student outcomes as its own value. It’s a tradeoff.
I care about having actual definitions of what "more competitive market" and "vigorous market for education" means, and gave examples of markets with significant market failures.
Is it even possible to have a vigorous market without strong government oversight?
> define more competitive markets - Is it even possible?
Yes it is, and I am using it in the traditional sense of "Sellers vying to make their offerings more compelling so consumers prefer them to alternatives". A more competitive market has more of the above fighting happening, which can be incentivized in several ways.
Specifically for the US, I already gave a massive truck-sized example of how you can make offerings more competitive: repeal recent 1970s policy changes that make college debt work different than essentially all other debt in being non-dischargeable, and lenders will put pressure by refusing to lend for failschools. This will slash their demand, and survivors will be expected to provide more compelling “when examined actuarially” lifetime student economic outcomes: from the lender’s perspective, the education needs to be expected to at least pay for itself. Schools in a world with dischargeability will therefore make efforts to compete on being able to compellingly show “we are imparting an effective education which equips you to repay what you spent”, and in general will be less able to get away with “we have a strong brand and you’re young and naïve, come study here!”. You can fool an 18 year old, you won’t fool the underwriter.
Specifically for the EU, there’s three approaches I’d like to see considered, the first and last more experimental than the others. It’s a widely agreed upon problem that faculty aren’t incentivized or often even that good at actually teaching, and to a lesser extent they’re also bad at training graduate students, because professorial incentives are to be good at research and grant writing, the thing for which universities pay their salary.
Historically, many universities used a different mode where they kept permanent salaried faculty positions very limited, and rather than charge a tuition, most schools and professors were expected to charge a fee or honorarium they would collect from their individual pupils as the bulk or totality of a professor’s compensation.
We moved away from this because historically teacher compensation was abysmal and we wanted to better support educators in studying - the pendulum swung way too far the other way though, and professors are essentially totally insulated from needing to seriously engage with their student body - they make a salary no matter what and it shows when they teach like it. Returning to a market where teachers’ financial outcomes are at least partially linked to their students explicitly choosing and paying professors chosen fees rather than a tuition which everyone in society pays stochastically, professors are incentivized to competitively vie for being better at training and teaching, because their prosperity and success would be linked to it.
Second, as much criticism as the US model gets for its prices, much of that appears to be driven by administrative bloat and nondischargeability, payment itself is actually really great when dischargeable because it seems prices stay low and this bloat doesn’t happen when it is. It also means a significant fraction of students do try to get into the best school they can and the schools have some incentive to fight to be seen as better - they make their money when students go. The results speak for themselves: something like half to two-thirds of the world’s top 100 universities are all in America.
Last, I’d like to see both European and US models collaborate harder on job and work placement as part of ensuring student success. Colleges being a source of a liberal education without concern for fiscal outcomes can be great, but the pendulum swung too far and these students are essentially thrown out into the world without any expectation of success, because the school no longer has any investment in them. I’d like to see some portion of the fee of education be moved to explicitly garnished wages from placed-into-their-trained field employees - you succeeding would therefore be the university’s success.
I’d therefore like to see taxes slashed on education with moves to paid models comparable to how they existed in the US prior to the 70s, reductions in permanent salaried academic positions with in-kind movements of price of tuition from the school at large to being in baked into professorial fees instead, and moving the funding of education from societal fees to a fixed percentage of post-graduation salaries for some fixed time, to incentivize effective job placement.
The common bailiwick that needs to die is that Europeans don’t pay for college - they do, it’s just compulsory, lifelong, and in a way that is not incentivized to produce quality.
I agree that non-dischargeable debt for education was a horrible change, given the predatory response of the colleges and collusion between the increasing power of the administrative class over the university and the capitalists providing debt funding.
US schools are increasingly extractive because if higher education is indeed necessary then it is economically beneficial for someone to go to college - so long as the result is more profitable than not going to college. If the college charges less than that (or rather, the college + debt industry), then they leave money on the table.
There is little interest in providing quality low-cost education because it is capital intensive, and capitalists want to maximize their profits. As the recent news about rent collusion shows, capital owners will collude to extract more profits.
> the pendulum swung too far
This has been a trope since the 1960s when the right started their culture war against college education as the post-GI bill era meant college was no longer a place primarily for the children of the privileged classes.
That is, be specific - when was the pendulum enough in the other direction that you wouldn't have complained thusly? It seems you like the 1960s, when the right complained about ivory tower academics filling student brains with anti-American nonsense.
> reductions in permanent salaried academic positions
We have that. These are called adjunct professors. "Editorial: U.S. colleges are overusing — and underpaying — adjunct professors" / "The American Assn. of University Professors reports that 70% of faculty are adjunct, most of them without benefits, job security or union representation; they teach more than half of all college courses in the U.S."
They are also poorly paid, exactly as you would expect from an extractive industry.
How low should it be? 20% 10%? But in the 1960s in the era you praise, those numbers were much higher, back when academic positions included significant administrative responsibilities.
If you really want to remove "administrative bloat", remove administrators.
> garnished wages from placed-into-their-trained field employees
Ahh, so you follow the meat widget model of college education. Got a degree in physics but decide to open a chocolate boutique? Sorry, you'll need to pay back your education first.
It costs a lot to go to med school, so those who go often end up in debt, which means they need to get jobs which pay enough to pay back that debt, which means they can't afford to provide medical care to poor communities.
It costs a lot to become a lawyer, which is one of the factors for public defenders are 1) needed, and 2) so overworked.
Besides, we've had similar policies for a long time. I had teachers back in the 1980s whose agreed to debt relief for their teacher education which contingent on being a teacher for enough years.
I've also heard stories about the consequent problems in such a bureaucratized system.
> see both European and US models collaborate harder on job and work placement as part of ensuring student success
In Germany: "After passing through any of the above schools, pupils can start a career with an apprenticeship in a Berufsschule ( vocational school). Berufsschule is normally attended twice a week during a two, three, or three-and-a-half-year apprenticeship; the other days are spent working at a company. This is intended to provide a knowledge of theory and practice. The company is obliged to accept the apprentice on its apprenticeship scheme." - https://en.wikipedia.org/wiki/Education_in_Germany
How is that not exactly what you are asking about?
> The common bailiwick that needs to die is that Europeans don’t pay for college
I'm really tired of people doing the "I'm so clever" comment that "you know that 'free health care' isn't free, right"? That extends to people pointing out that "free college education", and "free K-12 education" and "free school lunches" and "free tampons" and "free condoms" aren't actually free.
Like, duh. It's just name-calling implying I'm ignorant, and therefore you don't need to take me seriously.
Did you know that freeways aren't actually free, but depend on tax funding?
They already focus on ROI, the problem is it's ROI for them not the student. In most states the biggest or second biggest company is a university because they run for profit sports programs with no pay to players, make money off commercial research grants and classes using pHd students making 34k/year, use the students as both low wage workers for campus jobs in high value retail space leased to franchises and as a captive populace to price gouge with required meal plans using the student loans, capitalize again off the real estate that is often land granted to them by the state by offering overpriced student housing that is often mandatory for freshmen. You basically have to accept getting scammed to get a degree.
Trade schools should definitely focus on ROI, and a lot more people should attend them. The idea of the public university is to bring a traditionally aristocratic practice - the devotion of several years of one’s young life to not-necessarily-practical intellectual pursuits - to the middle class. I think our civilization would lose something worthwhile by returning this practice to the exclusive domain of rich families. Much the same as if we sold off all our public parks for development.
The issue is that we have democratized not only the class background part but also the “intellectual pursuits” part. College should be a lot more selective and a lot more rigorous; only a small minority of students have any business attending. The rest can get their credentialing and coming-of-age ceremony in an ROI focused trade school.
See also the excellent book "Shop Class as Soulcraft" for a thorough examination of skilled trades as an under-appreciated and vital aspect of our economy and culture.
> The idea of the public university is to bring a traditionally aristocratic practice - the devotion of several years of one’s young life to not-necessarily-practical intellectual pursuits - to the middle class
The entire idea that spending 4 years learning useless knowledge is somehow valuable is completely mistaken bullshit.
Aristocrats could get away with it because they were rich but there is 0 evidence this practice brought fundamental value to them or society other than serving as an expensive status signal.
which would make lenders more cautious which would make it harder to get a loan which would make less money available so tuitions would be competing for less and prices would come down this is how it's supposed to work yes
Yes, but this is also the preferred solution of the people who caused the current crisis with university cost inflation.
Universities used to be expensive schools for rich people's failsons to "find themselves". That's why there's a lot of focus on "well-rounded" educations even today. Then western governments started offering taxpayer-funded tuition, which resulted in a new wave of educated kids who refused to believe government narratives regarding wars and refused to comply with conscription and drafts. This came to a head during the Vietnam War, where the US found that it's usual ability to start wars against labor in other countries had been stymied by them educating the enemy (their own workers).
While the draft has been relegated to a vestigial function in the US today, the people in power were able to shut the people down. Saudi Arabia, a theocratic dictatorship that belongs in the 10th century, not the 20th, did the American ruling class a solid by embargoing the US and shutting down our economy for a decade. This gave cover for the complete overturning of Progressive Era policies. Most importantly for this subject, public state universities were stripped of their government funding. Instead, they would charge ever-increasing tuition which students would pay for with loans. This ensured that the poor could not access education and that the educated middle class would be in permanent debt slavery.
Public universities went along with this because they were promised more money than they could get from public funding. This is why you see massive amounts of money being wasted by universities on bullshit. The ruling class gave universities a seat at the table of lavish excess in exchange for, y'know, letting the cops shoot their students with rubber bullets any time they get antsy. Your student debt is a bribe from the military-industrial complex to the university system that you pay for.
However, this gambit did not fully succeed. For one, students are still protesting, despite the debt noose around their necks, and university officials' best efforts to rubber-bullet their students into compliance. So there's a lot of politicians who want to get rid of university education altogether and replace it with trade schools. I may have harshed the concept of a "well-rounded" education before, but it does mean universities still have to teach things like history and economics, which is the sort of thing that makes the lower classes resist their social programming.
So a lot of people in power want to get rid of universities and replace them with trade schools. Now, I actually don't have a problem with trade schools; a lot of good paying jobs are going undone because they don't confer the kinds of status middle-class families want. But there's a lot of right-wingers who want kids in trade schools solely because trade schools generally do not teach all the problematic subjects and forbidden knowledge (aka "traditional coursework") that makes tools of society start asking questions.
If you want an actual way to fix universities (without just turning them into trade schools):
- Have a ONE TIME student debt forgiveness event, contingent on shutting down the student loan system, so this shit doesn't happen twice.
- Restore public university funding sufficient to allow tuition-free education for all poor and middle class students.
- Purge the university administrative class, they've grown overbloated and turned universities into their own personal hedge funds.
Once this is done, then we can start talking about what classes and degrees actually have good ROI on the public money the universities will be getting again. The thing is, though, the existing "low ROI" degrees mainly existed so the university administrative class could pump up admissions numbers. Remember, that was part of the deal they made with the devil. Taking away the student loan system means there's less incentive to admit students to prop up numbers, but if that becomes an issue again, we can further require minimum standards for students or courses through the university funding mechanism.
> Universities used to be expensive schools for rich people's failsons to "find themselves". That's why there's a lot of focus on "well-rounded" educations even today. Then western governments started offering taxpayer-funded tuition
Replace western by "US" for "well-rounded". AFAIK, all European university degrees are focused on a single topic, and its requirement (so, lots of math if you're studying physics). No literature classes required (or even available in some cases) if you're, e.g., getting a computer science degree.
> If student debt is dischargeable and the government guarantee is removed or dramatically reduced, pretty much all problems are “solved”.
Chesterton's fence definitely applies here.
If you don't understand what that law attempted to prevent in the first place, you're just going to get your pocket picked by a different group of people.
Yep, exactly. Current situation is clearly bad, but most of the solutions seem to focus around the idea that dismissing trillions of dollars in debt through bankruptcy is a great idea (it isn't)
1. Provide a counterbalance to private industries by having the government player to be a significant player in that market. That means a free or near-free high-quality state higher education system like the California system used to be until it was made an explicit political goal to avoid an "educated proletariat" [1]. It also goes for housing, hospitals, banks, ISPs and so on;
2. Nationalize failing industries rather than providing them loans for no reason. Banks fail in 2008? Well, you belong to the state now. Just like the FDIC does with failing banks.
3. Federal dollars for pharma research should come with an equity stake in the private corporations that monetize it. Most drugs are developed with Federal grants.
> I love a good market as much as anyone
Just curious: where do you see markets actually working?
> 2. Nationalize failing industries rather than providing them loans for no reason. Banks fail in 2008? Well, you belong to the state now. Just like the FDIC does with failing banks.
I kind of agree with this, but as a taxpayer, I don't necessarily want the government to have an equity stake in a failing or horribly-run business.
We need the government to grow a backbone and allow large businesses and even entire sectors of the economy to FAIL when they suck. I hate the narrative "We have to keep ShittyCo alive because it provides 10,000 jobs!!" as if those jobs would just disappear if ShittyCo got flushed down the toilet like it should be.
Taxpayers should not bail out GM and Chrysler and AIG and US Airways and these shit companies. We should have let them fail, let their careless shareholders eat it, and created a regulatory environment that allowed better-run competitors to spring up.
Multi-billion dollar industries represent jobs, stocks, and campaign contributions. The US government is not designed to beat those forces. It's the same reason we'll never see universal healthcare unfortunately.
You seem to imply that a general willingness is what would allow this to happen when the article spells it out pretty clearly: it's powerful organizations clinging to power. Your sentiment amounts to nothing more than wishful thinking.
It's tempting to just agree with your sentiment, but I think that day dreaming about an unrealistic solution sucks energy away from more effective actions. The main challenge of solving a difficult puzzle is to avoid dead ends and red herrings.
A more promising plan involves explicitly strategizing against the agents who have the opposite agenda.
Can you imagine if we could kill MLMs, pay day loan sharks, bail-bondsmen (My state fully banned this lunacy), Psudoscientific medicine (chiropractors), Scientology and other useless trash from society?
God going after just one is liable to get you a fate worse than Daphne Caruana Galizia
> I love a good market as much as anyone but there really are problems markets will never solve
The problem with student loans is that they are not driven by markets. If they were, absolutely nobody would give a loan to an 18 yo to spend 4 years and $160k to study psychology.
We shouldn't see the government as solution to too many problems. If we overdo on it, we get socialism. And we know how it always ends.
Let the market forces decide. Eventually people will realise college doesn't work and will stop going there. Seriously problem is that too many people think they are smart and can benefit from a degree, when most can't. If 10% top graders go to college from school as it was in the boomers' era, ROI of higher education will be enormous (as there won't be an oversupply of useless graduates), and costs will be low (as low demand always reduces prices).
We shouldn't punish people who take the money because people are willing to pay it. Who's fault it is that they are dumb? Do we see much say, annoying advertisement to the tune of "go study X with us, you'll be rich and women will love you"? No. People are doing it because they are dumb. If we try to build a system that prevents smart people from taking money put on the table by dumb people, we will make the whole system dumber by incentivising dumbness.
In this case, government intervention is what caused the problem, and removing that intervention is what would disrupt the multi-million dollar industry.
Specifically, the government made it so college loans can't be discharged in bankruptcy, and backs many student loans.
The solution is to remove the exception for student debt in bankruptcy, and either have the government stop backing student loans, or make stricter requirements for colleges to quailify for its students qualifying for federal loans. Like say, require that a certain percentage of students graduate, and get jobs within a year of graduating, having reasonable tuition, etc.
Agree, but the result will be that far fewer kids get to go to college, or get to go to the best college that they can get into.
Loans will only be granted to students who have a track record of high achievement, parents willing to co-sign, and going into majors that make economic sense.
Enrollment will drop, universities will stop offering passion majors, mass layoffs in library science, academia, and college administrations (likely to the tune of 1M+ people).
In the end, students will be told by federal examination which school and major they get to pursue, or whether they get to go to college at all.
That's assuming the government is both effective and efficient in this process.
This is essentially how most consumer economics work.
But isn't it the goal? To make sure only the kids who have the brains and the right class to make value out of a degree (or don't care about value because their parents have cash), will go to study, not "just about everyone" as now. Working class kids without outstanding abilities should go to trade schools/apprenticeships and do blue collar labor. It pays decent bucks, and brings value to society too.
I think therec would also need to be a cultural shift to make trade schools and apprenticeships more acceptable, and make financial assistance for them more accessible.
And for that matter, I think it could make since to have trade schools for white colllar jobs too. In some sense that is what coding camps are, although I'd like to see them be a little more rigorous and include things like security, software design, algorithms, etc.
As for passion subjects and arts, maybe have more, and higher quality community classes available that people can go to when they already have a decent job and can pay for them outright instead of accruing massive debt.
> If we overdo on it, we get socialism. And we know how it always ends.
First, no, we have some high-visibility examples of dictators claiming to be socialists, several of whom had purges of other internal opponents who said socialism was a different thing to what they were doing.
We don't point to the "Democratic People's Republic of Korea"* or "The Democratic Republic of Congo" then say of Democracy (or of republics) "And we know how it always ends".
Second, there's a huge gap between what the USA considers "dangerously lefty" and what is seen in northern Europe today, let alone states today which are or were explicitly socialist such as the USSR.
There have been a lot of socialist countries that were proper and strong democracies, notably India. The result? Hundreds of millions in abject poverty in India until socialism was given up in the 90s, and is slowly recovering.
Funny you say that, Karnataka is an outlier beating its peers in all quality of life metrics and has been run by communist for decades.
Also, modern day India has a very strong government intervention bias, especially regarding lifting people out of poverty. Be it investments in infrastructure (such as running water), or downright giving food to people. Good luck explaining how that isn't "socialism" to an American.
> Funny you say that, Karnataka is an outlier beating its peers in all quality of life metrics and has been run by communist for decades.
You mean Kerala, not Karnataka.
And conversely, West Bengal was ruled by the Communists since the 1970s to the early 2010s, yet it's developmental indicators have regressed to those comparable to some of the poorest states of India.
Conversely, right leaning and nativist Himachal Pradesh (if you ain't Pahadi or Pahadi-adjacent we will give you the cold shoulder, and both the state chapters of the HP INC and BJP trace their origins to the RSS and Arya Samaj) has developmental indicators that can match Kerala and other traditionally richer states in India.
At the end of the day, all that matters is administrative capacity, not ideology.
If local government is held accountable, it will work hard to deliver.
No, i mean EU socialist countries. To the tune of Sweden, Netherlands, etc. That are little but sleepy retirement community with no ways to make money. Why would anyone with any ambition want to live there? So they don't. They go to America in spite of all it's horrors and sins. Live there once they made they money? Also no, because taxes, they go to the likes of Cyprus or Malta, or since recently, Spain [1]. These countries are good only if you are a taker, or a tourist.
I moved from the UK to Germany, I actively decided against the USA. Why? Consider what was going on politically in the US right after the UK voted for Brexit.
Σκεφτόμουν την Κύπρο, αλλά οι Άγγλοι λένε όταν κάτι είναι δύσκολο να διαβαστεί: "It's all greek to me"
European social democracies may not be the best if you want to get rich, but for average Joe they offer superior quality of life compared to the US. IMO too much capitalism and socialism both suck, and certain EU countries have the best balance between them.
What is the total cap of those startups? How does it compare with what IPOs in the Valley in a single year? We are probably talking about same "startups" as in Spain that people only open to get startup visas. There are multiple business plans mills there who specialise in writing plausible "sitcom startup" BPs for that purpose.
That, probably can and should be fixed. Set a minimum age for someone to take a college loan to say 21. Otherwise, a parent takes it and it's subtracted from a parents' social security check before it does from kid's. Then people will think twice. Maybe that's fair.
Good idea. I think kids in high school should also be shown some real stats about monetary outcomes from different degrees. Not BS marketing material from educational institutions, but actual statistics. The whole society would benefit if number of students in different fields would roughly match labor market demand.
how many people do you think even understand “actual statistics”? i was reading a study done by actuaries working at one of the largest reinsurers in the world, and they made conclusions based on confidence level values overlapping, which is a nontrivial mistake i identified within seconds. and these are actuaries, people who by and large, so understand statistics. how do you expect the average person to interpret any of it when they struggle to understand what a rate of change (inflation) is?
Yep, and kids also smoke, vape, do drugs, gamble, assault people, play too many video games, etc.
The answers lie in educating them to make good decisions, and be there to help when good decisions happen to turn out poorly. The current dilemma is largely due to provably bad decisions (by students, banks, universities, government).
Are student loans the most pressing "bad decision" we have as a society? Definitely not. Is it a very electable topic? Yep
I question utility of that reduction. When you reduce complex situations to simple words like 'socialism' you lose nuance and predictive power. It's not binary. It's more or less. Canada is more socialist than USA. Norway is more socialist than Canada.
Reducing to "is" or "isn't" doesn't help understand the problem or come up with viable solutions.
If we go along the route of "asking the government to ban every line of business where people waste money getting no value for it or even getting harmed, being driven by systematic delusion", as it is with the higher education - we will shoot ourselves in the foot in a massive massive way as this will kill almost all web startups as this is what they are - use manipulative tactics, knowingly false expectation and social effects to force people to spend money on... well nothing really. And the lower your chance of getting something in return, the more you pay (classic example are dating apps). I go to startup events frequently. Took me a few years to accept the truth that speaking about any industry (their slang for it is "vertical") - well, any except porn - like dating, pharma, so-called "nutra", etc. they actually mean "scam in the field of X", and the main idea of every successful one is "a genius way to obscure it is a scam".
For God's sake, it will even kill custom software development which most people sitting here, do for a living - because it is the same exact thing - vast majority of clients never get what they want and even if they did they won't be able to make the money on the useless "products" they invented, because this is nothing but a systematic delusion that's moving them. Almost all of them see themselves as genius inventors of the next world-changing thing but they are in fact random nobodies who raised cash from other random nobodies, to waste it on something that makes their contractors laugh so badly they even refrain from doing video calls. It's even worse than higher education. I seen multiple software dev companies throwing lavish parties on the April Fool's day as "professional holiday of our clients".
Should we first look at ourselves in the mirror before blaming the college cabal for doing the same as we do ourselves, just more successfully?
I said is I don't see the utility in reducing the concept from a continuum to a binary "is/isn't"
You seem to have doubled down on the is/isn't perspective and demonstrated what I was referring to. The more you reduce the less useful your reasoning becomes.
No, with high student loans, you are not supporting high talents; you are supporting the rich only. You are obstructing a lot of potential that poor students might have realized if they could have afforded it. It's not about banning universities; it's about broadening accessibility. Schools are state-funded for the same reason.
Socialism is a term too broad to mean anything. When we say socialism, do we include states that provide healthcare systems as infrastructure, as is common across the world? Do we include the vast amounts of market interference represented by decisions about what crimes can be hidden behind a corporate veil, what companies win lucrative government contracts to have decades of non-competitive profits?
The attitude that the government shouldn't intervene against companies on the behalf of human rights has been tried for fifty years, and it is an unprecedented failure even in financial terms for at least roughly 80% of the population of one of the largest and wealthiest countries in the world in terms of real purchasing power. Even for many of us in higher income brackets, the resulting crumbling infrastructure and drastic wealth disparities leave much to be desired as a society to live in. Many of these problems have solutions, and calling them "socialism" is meaningless as an argument against them
That's too disruptive, and there's too high a chance of unintended consequences. Instead of that what you'll see is a 'we'll kill this multi-billion dollar industry over the course of the next 30 years'
With all due respect, fuck that. We do disruptive stuff with unintended consequences for millions of people as a matter of policy all the time, and the idea that it'll disrupt some finance goons' ponzi scheme does not bother me
This is the problem with a ton of policy thinking. The idea that we can solve a problem of this magnitude with disruption, and somehow prevent market forces from reacting, is incredibly short sighted.
It's incredibly expensive to run a university, and many people feel entitled to attend any university they can get into (not a bad thing, btw), but you can't suddenly erase the bill without drastically cutting costs, changing supply/demand, or otherwise altering the economics first.
The college level education system in the US employs almost 3.8 million people. Decisions here absolutely affect their employment, tax rates, employment rates, bank loans, financial industry solvency, etc.
This problem is incredibly far away from the space of YOLO tactics.
If you mean banks, there’s the problem that “let it die” often translates to “shift the obligation”, which typically gets shifted to the tax payers, either in plain sight after a bailout, or under the table by devaluing the currency (basically taxation without having to say it).
They stopped the one child policy nine years ago; they had it in the first place because demographic projections had them severely overpopulated if they didn't.
During the period in which it was active, their GDP increased by a factor of about 62. Not percentage, multiple.
They reversed the policy too late. Their rapid growth was them seizing the low hanging fruit upgrading from a country of almost entirely peasants to slightly fewer peasants, all funded by Western greed. Those gains will never happen again.
Entrenched and connected types tend to exit industries before the gavel hits, and enforcement from the CCDI isn't impartial, with plenty of bribery to remain off their radar.
Truly Schumpterian creative destruction is good in a vacuum, but reality isn't a vacuum.
