The Higher Education Bubble Is Going To Burst

The title of this post is the title of a book written by Glenn Harlan Reynolds  who introduces the book as follows:


"The buyers think that what they're buying will appreciate in value, making them rich in the future. The product grows more and more elaborate and more and more expensive, but the expense is offset by cheap credit provided by sellers who are eager to encourage buyers to buy. Buyers see that everyone else is taking on mounds of debt, and they're more comfortable when they do so themselves. Besides, for a generation, the value of what they buy has gone up steadily. What could go wrong?

"Everything continues smoothly until, at some point, it doesn't anymore. Yes, this sounds like the housing bubble, but I'm afraid it's also sounding a lot like the still inflating higher education bubble. College is getting more expensive, a lot more expensive. At an annual growth rate of 7.4 percent a year, tuition has vastly outstripped the consumer price index of 3.8 percent. It's skyrocketed past spiraling health care increases of 5.8 percent. Even the housing bubble at its runaway peak pales in comparison.

"Now, consumers would balk except that, as with the housing bubble, cheap and readily available credit has let people borrow huge amounts of money to finance education. And both students and parents continue to believe that, whatever the cost, a college education is a necessary ticket to future prosperity. But is it?

"Well, meet Cortney Munna, a 26-year-old graduate of New York University recently reported by The New York Times to have nearly $100,000 in student loan debt, debt that her degree in religious and women's studies did not equip her with the actual job skills to repay. Payments on Cortney's debt are about $700 per month, equivalent to a respectable house payment and a major bite on her monthly income of $2,300 as a photographer's assistant earning an hourly wage. And unlike a bad mortgage on an underwater house, Cortney can't simply walk away from her student loans, which cannot be expunged in bankruptcy. She's stuck in a financial trap, and she's not alone.

"Even students who major in programs shown to increase earnings, like engineering, face limits on how much debt that can sanely amass. And with costs approaching $60,000 a year for many private schools and $30,000 for state schools, six-figure student loan debt is fast becoming the norm.

"Now, for many, the debt is enough to quash marriage plans. Who wants to marry someone with huge amounts of unpayable debt? It's enough to prevent home ownership and generally wreak havoc on the debtors' lives. In fact, total student loan debt in America has passed the trillion-dollar mark -- more than total credit card debt and more than total auto loan debt. But as prices have been going up, learning seems to have been going down. A recent book, "Academically Adrift" by Richard Arum and Josipa Roksa, found that 45 percent of students did not demonstrate any significant improvement in learning during the first two years of college, and 36 percent of students did not demonstrate any significant improvement in learning over four years of college.

The primary reason, according to the study, is that courses aren't very rigorous. In fact, a recent survey of more than 700 schools by the American Council of Trustees and Alumni found that many have virtually no requirements. Perhaps that's why students are studying 50 percent less than they were a couple of decades ago. And all of this is happening even as millions of people with college educations can't find jobs. Today, many graduates are already jumping the tracks to become skilled manual laborers -- plumbers, electricians and the like. The Bureau of Labor Statistics predicts that seven of the 10 fastest growing jobs in the next decade will be based on on-the-job training rather than higher education. And they'll be hands-on jobs that are hard to outsource to foreigners. If you want your toilet fixed, it can't be done by somebody in Bangalore. People pursuing these careers will have greater job security in today's economy and will be free from the crushing debt amassed by their more educated peers.

"Bubbles form when too many people expect values to go up forever. Simply put, the cost of higher education has far outpaced its actual value. The bubble is going to burst."

Affordable Care Act

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As predicted here ( see Is the Affordable Care Act Constitutional?  from April 20) the SC did not let semantics stand it its way and OKd the ACA.  I got  Kennedy wrong, but Roberts right (sort of).

The leftist columnists have been ranting for weeks that we were going to get a blatantly partisan ruling by the reactionary right that represents the tea party wing of the Republican Party.  Paul Begala intended it to be hyperbole, but the reality of their partisanship comes through in his piece about being left in the lurch by the decision.  From damn you John Roberts : " I'd already drafted a bitter, bilious, bombastic broadside against the right-wing hacks on the Republican Court. (Oops, my side won, so they're the highly esteemed and completely independent Supreme Court.)"


They were stunned into a moment of silence, but it did not last long.

I believe the most important part of this law is the requirement that businesses which do not provide health care will be required to pay a fine which is much less than the cost of health care.
This will motivate them to withdraw from employer provided health care.
This will lead to an increase in support for national health insurance.
That will lead, eventually, to national health insurance.

(revised from yesterday's version)
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he shall take Care that the Laws be faithfully executed 2

"Without the approval of Congress, the Obama administration announced Friday that it will stop deporting and start giving work permits to younger illegal immigrants who came to the U.S. as children. The extraordinary decision, enacted by executive order and announced Friday by Homeland Security Secretary Janet Napolitano, affects as many as 800,000 undocumented immigrants. It partially fulfills the goals of the DREAM Act, and will undoubtedly be viewed favorably by many Latino voters and immigrant rights groups who have been disappointed previously by Obama's record on immigration. Illegal immigrants will be immune from deportation if they came to the U.S. before age 16 and are currently under 30, if they are in school or graduated from school or served in the military, if they have been in the country for at least five years continuously, and if they have no criminal history. Those who qualify would not be granted citizenship but would be spared deportation and could work legally."

I noted here on June 18th that the President probably has the right to grant a reprieve that accomplishes the above.  Foolish me I assumed that he had done so.  That is apparently not the case.  There was no reprieve. Just an announcement that the group defined above would no longer be prosecuted.

The President unilaterally ceased enforcing part of the law.

Why not grant a reprieve?  Presumably it would upset some people because reprieve sounds like temporary amnesty which would make people unhappy.  

So the President just announces that he will stop enforcing that law against some people!

Apparently, I owe Charles Krauthammer an apology. 

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The Left, the Right, and the Constitution

This article by Yuval Levin is very interesting.

Combo # 1

At my local theater that would be a large popcorn and a large soda.  With the stated goal of furthering the health of NY citizens Mayor Bloomberg has recommended a ban on the sale of large non diet sodas and large portion popcorn in theaters.  The Cambridge city council is considering a similar restriction on sales of large non diet soda.

We already accept the premise that government has the right/authority to regulate “things” that have a deleterious impact on health (alcohol, drugs, tobacco).  But, with the extension of bans to large soda and popcorn one gets the feeling that this “ban” wagon will soon include large candy bars, happy hour, all you can eat buffets, large fries, and pitchers of margaritas?

How you characterize the issue makes all the difference.  A government attempt to assist you in being healthy sounds OK, but government regulation of food portion size sounds like “big brother”.

Here is my take on this:

 1.) Three years ago portion size and your health was none of the government’s business.

 2.) With the passage of the Health Care (ACA) it is the government’s business.

Why Conservatives Love Rachel Maddow

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She is very good at what she does, which is be an articulate liberal on her show on MSNBC.
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he shall take Care that the Laws be faithfully executed

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The title of this post is from Section 3 of Article II of the constitution which lists the presidents powers and responsibilities.


From a story in the Washington Post whose title is:   U.S. will stop deporting some illegal immigrants who came here as children
... 
On Friday, Obama seemed to find a middle ground, granting a two-year reprieve from deportation for certain eligible immigrants but not granting them legal status.
“These are young people who study in our schools, they play in our neighborhoods, they’re friends with our kids, they pledge allegiance to our flag,” Obama said during an afternoon Rose Garden appearance. “They are Americans in their heart, in their minds, in every single way but one: on paper.”
...
You will probably hear a lot about this from folks like Charles Krauthammer (who calls it rampant lawlessness) and those who wonder:  Since when does the president have the discretion to enforce or not enforce laws?

I have several thoughts about this that may appear confusing.  Confusion is frequently the centrist's lot.

1.  The "every way but on paper" is a pretty sad statement coming from a lawyer.
The "rules" written down on paper is what the law is all about.  That goes back to the 12 tablets on which the law of early Rome was written on so that the people would know what the law was and would not be abused.
2.  It seems like a pretty cynical maneuver in search of votes.  (As someone said: search, release, vote.)


But, on the other hand, if you back up into Article II Section 2 you will also find that the president:
3.  "shall have Power to Grant Reprieves and Pardons for Offenses against the United States"


Now I don't know if that is dispositive in this case, but it sure seems like it is enough to say that Krauthammer ought to dial it back a notch or two.
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LeBron James

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I am not a basketball fan.  I am not a LeBron James fan.

But I happened to see a bit of (I think) their 7th game against the Celtics last week.

It is amazingly beautiful what the man can do.
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Glass Steagall support

A conversion to support for the "forced separation between investment banking and commercial banking."

A centrist is ...

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I want to say what I think it means to be a centrist in the America of 2012.

First, I should say that I am an optimist.  I see American history (and more generally the history of Western Civilization) to be roughly on an upward trajectory*.  There are occasional declines (even some rather large ones in Western Civ.) but the trend is upward. 

Second, I see the political community as being spread out over a spectrum from left to right.   (One could be more precise with two dimensions, but one will do for now.)  For this discussion I will ignore the extremes by which I mean those beyond the types who are in Congress (at this time).  That is our BP( =body politic)  will run from, say, Dennis Kucinich to Ron Paul.

Third, the political community is not static.  Like the earth itself, it moves.  The people within it also move.  Sometimes they move with it and sometimes it moves around them.  For example, I remember in my youth hearing George Wallace say that he hadn’t left the Democratic Party, rather the party had left him.  He was right.  George was fixed in his positions (until much later in life) and the Democratic Party (and the whole BP) moved to the left.  The most notable movement is the familiar trajectory of becoming more conservative with age. Therefore, the center, and where the centrist is located, also moves.

Fourth, in order to say what a centrist is first I have say what I think a liberal is and what a conservative is and how they relate to the body politic.  In each case I want to say what I think they are when they are at their best, when each gives to the other the presumption of good faith.  To try to do for them what they would do for each other if they were trying to understand each other rather than win debate points.  The sad thing is that we mostly tend to think about politics in the terms that are used by the babblers on TV and in the blogs and many of those babblers would not give each other a drink of water in the desert.  Many others seem to me to be just playing a role and are not even trying to be people of substance. 

In my view a liberal is impatient because his country is not more perfect and his basic approach to the political situation is that “improvement is always an alternative”.  A conservative is concerned that some changes will make his country less perfect and his basic approach to the political situation is that “the burden of proof is on the advocate of change.” Notice that there is not necessarily a conflict in those two and that many if not most individuals support both perspectives and the category that I would put them into would be based on which of the two perspectives was dominant in them.  If it is balanced in them then I would consider them to be in the center.

Frequently the positions on the spectrum move from liberal to conservative. That is, positions that are liberal are frequently viewed later as being centrist and centrist positions are frequently viewed later as being conservative or off the charts.

I think that the BP (body politic) generally moves in the liberal “direction”.  I think the BP can be viewed as an arrow.  The liberals play the role of arrowhead which has a cutting edge to move the BP “forward.”  The conservatives serve the role of the fletching which stabilizes the arrow’s flight.  The centrists form the shaft that holds the other two parts together and keeps the missile from coming apart.

Finally, I would say that a centrist is a person who recognizes the legitimacy of both the liberal and conservative perspectives described above and who does not allow either of those perspectives to dominant their thinking.  The closer the person comes to giving equal weight to those perspectives the nearer the person is to the center.

*[For those who will not understand "upward trajectory" absent “a slavish subservience to the shibboleth of numerical interpretation at any cost” I would say that if you give me a quantification for “quality of life” , then I will call Q(t) the median quality of life of the individuals under consideration at time t.  If you then put t on the horizontal axis and Q on the vertical, I think that the general trend of that graph would be increasing over time.  That is, P{t: if t < r, then the P{r: Q(t) < Q(r)} > ½}> ½ .]

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Wisconsin

The results are in and there will be a lot of weeping and wailing and gnashing of teeth.
The public employees unions have lost this one and I think that that bodes well for the prospects of fiscal responsibility in the states.

There will be two lines of argument about this from the left:
1.  They bought the election and this means the end of democracy is at hand.
2.  There will be an attempt to conflate private company unions with public employee unions and claim that it is an effort to destroy all unions.

I believe that Walker's benefit program was that he wanted the state employees to pay 5.8% of their salaries toward their pensions (they paid almost nothing then) and he wanted them to cover 12.6% of their health care premiums (their share would go up from $79 a month to about $200; the average private-sector person pays about $330).

But they say he is also destroying the union.  The union cannot now force public employees to automatically deduct from their pay large union dues.  They have a choice (I thought liberals were prochoice.) and large numbers of them have exercised that choice and bailed out of the unions.

How do those numbers in red happen?  The problem is having the negotiating table rigged.  The PEU (public employee union) chooses their representatives for one side of the table.  If they can use the power of  the union to elect sympathetic people (read unenlightened liberals) to represent the government then they have their people on both sides.  Which is why they paid peanuts into their pension plan while you paid plenty into yours.

I would remind the reader that no less of a liberal than FDR was explicitly and unequivocally opposed to  PEUs:  "The process of collective bargaining, as usually understood, cannot be transplanted into the public service," Roosevelt wrote in 1937 to the National Federation of Federal Employees.  The National Labor Relations Act (Wagner Act) of 1935 specifically excluded PEUs.   But then the numbers of public employees got so large that the temptation to the Democratic Party was too great and they abandoned FDR's advice and set us on the course to pension and healthcare promises that , as they so politely say, "are unsustainable."  A better word would be irresponsible.

My Tenure Biennium

A review of My Tenure Biennium  from May 30, 2012 can be found in the Murray Ledger and Times.

What Walker's win would portend

It has been suggested that the Walker recall would discourage reforms such as those he has brought to Wisconsin.  For an alternate view of what a Walker win would mean check this National Review article.

How Can the Center Be Found—and Will it Hold?

            Yellowarmadillos is dedicated to the proposition that a political center can be found and that such a center can bring great social and economic benefits (not the least of which is that we can avoid disaster) to our society, nation, and perhaps even, by implication, to the rest of the world. 

            This note is an attempt to test that proposition. A famous Roman thinker (probably Cicero) once said that virtus stat in medio (“virtue is found in the middle”)--with the dead armadillos I presume.  Is this true?  Many of us, and not just me and the founder of this blog, would like it to be.  It seems so sensible that virtue should not be found on the extreme ends of any spectrum, philosophical or political.  Further, shouldn’t virtue be more or less equivalent with truth or even Truth of the ultimate sort that religions and religious seekers pursue? I may be stepping on a host of philosophic toes by equating these two, but I will beg your indulgence to continue in this existential vein. Besides, unless we are followers of Machiavelli, we wouldn’t want to equate virtue with dishonesty or untruth, would we?

            Yet history might give us reason to wonder about the possibility and value of being a centrist—and some of the statements made recently on this blog also muddy the waters surrounding political centrism. Perhaps we need to ask some questions. Is my center the same as yours?  Is there an essential place to stand in the center or does it the center shift with time, issues, and personalities?  Most Americans, for example, would agree that Martin Luther King pursued justice and truth? Was he a centrist?  What would a centrist do in Nazi Germany, especially after 1938?  Are there some situations where truth is not to be found in the middle?

            To say this—to question the value of centrism—is to locate ourselves in the mainstream of Western thought.  It was Aristotle who said that a thing cannot both be and not be at the same time.  His thinking was, generally speaking, of the “either-or” variety and this is has remained the primary way of approaching problems in Western history. Indeed, it helps explain the Scientific Revolution of the 16^th and 17^th centuries, the 18^th century Enlightenment (which stressed rationality over emotion and “superstition”), and the Industrial Revolution.  Eastern thinking in India and Chinese are more given to “both-and” ways of coming at truth, a path that has earned them much credit for their spiritual insights, but left them at the mercy of Europe and the United States in science and technology—until recently at least.

            Perhaps it is because of the limitations we now see in Western thinking and ways of living, in the damage our lifestyles have done to the planet, our arrogant assumptions that we deserve far more than our share of planetary resources, that makes some of us see the value of a return to the center, both in a political and socio-economic as well as in a spiritual sense?

            When I was young, we had a teeter-totter and quickly learned that it was impossible to keep the board horizontal unless we had equal weights on each end. Maybe we can learn something about the political center from this device.  Can we find the center without having some weight on each side, that is, some folks on each side who want there to be a center?  Do we have that today in this country?  If not, what should we do? It is almost as if, instead of the pendulum (to now mix metaphors) that travels from one side to the other and then back, we have two pendulums, each coming from a different direction and destined to clash in the middle. Surely that wouldn’t be a good thing, or would it? After the destruction, we might go back to a single swinging pendulum?

However, we are not living in a mechanical world in which teeter-totters can be built to balance, but in an unbalanced human one in which neither virtue nor truth can always be found in the middle.  It might be there on occasion, but only if there are forces that seek balance. And at times, that balance, that truth, may be found somewhere else—on one side or the other, even (and likely) in the midst of error. As a friend once said: “You can find the best things in the strangest places.”