Friday, June 29, 2012

The Next Bubble

Its been so long since last we... okay, I'll stop.  But seriously, as our three readers know, its been awhile since I've taken the time to put together something substantive for the blog.  Thank goodness for Conflict Revolution's new writers, or Stephen and I might owe more in child support to this whole enterprise than a certain former elected official does to his love child. 

Guess again!
Which brings me to the point about welcoming the new writers I mentioned.  We are happy to benefit from the outstanding contributions of Elaine Chen, who will be helping us with morning updates and assorted other posts, and Nadia Sheikh, who has kindly offered to cross post some content from her excellent blog Nadia in Pakistan.  Thanks Nadia and Elaine, and welcome!

Yet even as Conflict Revolution's platform widens and the blog expands, we can't forget where we came from.  Steve and I have most recently been working on a couple of (mostly) friendly exchanges on topics ranging from inheritance taxes to regulatory burdens, Republican obstruction, and tacky campaign fundraising gimmicks.  Sexy!  But if you're craving some email debate and you just can't wait, see our most recent discussion on plastic bags and global warming.  It's... great.

Now, that promised substantive post. 

Stephen passed along a lighthearted cartoon via everyone's favorite micro-blogging website earlier today.  You can take a look here:

https://twitter.com/StephenSiena/status/218159772506132481/photo/1

In case you're too lazy to click on the link I've just provided you, or you think we're operating a variation of the Stuxnet virus over here, the cartoon depicts a good-natured man who seems to have lost control over his own delusions of idealistic grandeur.  A thought bubble first depicts the man, appearing to be a politician of sorts, imagining that "everyone should own a home..."  This thought bubble takes off and drifts upward, away and out of control before finally coming crashing back to earth with what appears to be a dramatic POP!  In case the ideological persuasions of the drawing's artist were not quite clear in the first place, as one reads to the right, the cartoon ends with the same man, apparently having learned nothing, thinking wistfully that "everyone should go to college..."

And it comes full circle.

Whenever anything goes wrong, you can always expect conservatives to blame the government.  This becomes even more true when it's clear that greed, not government, is the true culprit.  The very term financial crisis implies that responsibility for our economic woes lies largely with a certain overly influential sector of our economy, and the reckless behavior of those bad actors who dwell in it.  That's not to say all who work in finance behave badly, and it's not to fully excuse those who bought homes they couldn't afford, or the tax policies and poor regulation that allowed the whole situation to feed off itself.  But it's amazing, really, the narrative that conservatives have constructed for themselves, post-crisis: the market failed, so it must be the government's fault for trying to help poor people.

Sadly this thinking will probably never go away, because people hang on to their own versions of history that fit nicely within their overall worldview.  Steve and I will probably never stop arguing about what caused our economy to sputter.  But what troubled me about such a silly drawing was not the constant re-litigating of who or what was responsible for the Great Recession, but it's application of the same flawed thinking to another issue that is in dire need of less over-simplicity and more careful analysis.

The student loan issue is scary.  Years of people piling up debt to obtain an asset that promises more economic prosperity, only to find that the asset isn't worth as much as they thought it would be, only to find themselves in a position of not being able to pay back their debt, only to default on that debt, only for those who bet on that debt to let out a collective "oh f-ck," only for the entire financial system to come crashing down.

Okay, so maybe those last three parts haven't happened quite yet, but if this scenario sounds familiar, it's because it is.  Witness the rush of people like my worthy partner in internet debating to get out in front of this and blame it all on flawed, over-sized thinking by a flawed, over-sized government.

But this sort of analysis does nothing to reconcile the fact that in a workforce where 63% of jobs will require some form of post-secondary education by 2018 [1], only 28% of Associate's Degree candidates will receive their diploma within three years in America, and only 55% who start their Bachelor's will finish it in six [2].  It's perfectly valid to question whether everyone in the United States should attend a four-year liberal arts college and major in philosophy (or history...), but when people criticize the idea that placing an emphasis on more education for our country's young people is wrongheaded, or foolhardy, they are really just building a giant straw man.  It has never been, and will never be, about sending more 18 year-olds off to the Ivory Tower.  It's about the fact that if America is to remain competitive, we need a more competitive workforce, and that with 8 plus percent unemployment, there were still 3 million jobs in America last June that employers wanted to fill but for which they could not find qualified enough candidates [3].  Most of these are mid-skill jobs that don't require the expensive Ivy League degree, but do require some form of post-high school training. 

Conservatives think it's the very idea that everyone should go to college that is making unqualified people take out more debt than they can afford, while at the same time learning information they don't really need, all to work in jobs that won't even require the information they spent four (or six) years learning.  The bills pile up, the job doesn't pay for them, and poof - every Wall Streeter who thought student loans were the next gold mine is sitting around scratching their heads.  But this mistakes the forest for the trees.  The idea that more people should obtain some post-secondary education doesn't mean we're churning out more English majors to work in trendy coffee shops and get deferments on their loans.  It simply means more people need to be better qualified.  The student loan bubble isn't inflating solely because more people are choosing to go to school.  It's inflating because the technical education students are receiving is poorly aligned with the specific skills employers will need when they get out, and because students in more generalized programs are poorly connected with the resources that can help them find jobs.  It's not a failure of idealism; it's a failure of practicality. 

The fact is that we need a top-to-bottom rethinking of our education system - what its goals are, what it will prepare students to do, and how it will nurture the unique interests and skills of every young person.  On a more mundane level, we need to identify what students should be able to accomplish on a basic level (K-12), and then how we expect them to obtain the additional skills they will need after that.  We are still operating off an industrial dichotomy in education - blue collar vs. white collar, academic skills vs. factory ones, when in reality, the needs of the modern economy are a lot more complex.  Many of today's manufacturing jobs require now require a fairly advanced mathematical background.  At the same time, "blue collar" and "white collar" work alike increasingly requires a creative streak that isn't nurtured by the rote model of basic standardized testing that dominates our idea of educational accountability.   It used to be that you made it as far as you could through school, and got the job you allegedly deserved as a result.  We're entering a much different period, where the nature of work itself is becoming much more customized toward what people are actually good at, but our education system is still steering people down traditional tracks in both the white collar and blue collar sectors that are growing ever narrower.   

So when conservatives lambaste the idea that it's dumb for the government to send everyone to learn the classics, and liberals respond in kind by protesting that everyone still deserves a shot at college, both sides make their points largely out of a misguided sense of what it means in the 21st century, on an institutional level, to be educated in the first place.  When someone like Rick Santorum calls Barack Obama a snob for wanting everyone to receive some kind of post-secondary degree, there's a particular amount of irony, because while Santorum is mainly trying to defend the idea that you can have a manufacturing job and still live a good life, his comments completely ignore the fact that in order to even have that manufacturing job today, you need that very same post-secondary training he just called the president a snob for wanting to encourage. 

We need to figure out how we keep more kids engaged in school from a young age, and allow those kids to discover the economic niches that match their unique interests... then help those same young people obtain the skills that will allow them to run with those interests.  Along the way we need to figure out how to test our students appropriately, implement better workforce recruitment and training programs, incentivize better career-matching services at two and four-year colleges, and then pay for it all.  If this all sounds difficult, it's because it will be. 

Now that this post has strayed significantly enough from its lead-in of love children and the welcoming of new writers, it's probably time to wrap it up.  Before I do that though, I'll bring it all the way back around, and point out that it was one of our two new contributors' first posts at the beginning of the week about her adventures in the workforce after Georgetown that really got the wheels turning for us over here on this whole topic.  It's one that we will continue to address, because it's one that is relevant to every young 20-something trying to navigate an employment landscape that our expensive degrees were supposed to prepare us for and didn't. 

But it does no good to sit around pointing fingers.  Blaming the government isn't going to make our education system any less antiquated, or our institutes of higher education any more adept at improving their job placement rates.  A task as monumental as rethinking what we're supposed to get out of school will require the creativeness, collaboration, and constructive contribution of all sides.  The problem isn't the idea that everyone should go to college; it's our idea of what college is even supposed to accomplish. 

6 comments:

  1. Matt, your post is mainly a defensive reaction to idiotic things conservatives say. I understand the liberal paranoia of, "Well, so long as they're allowed to say such things, naive people will believe them, so we need to work hard to set the record straight!" But I think it's a waste of time, and effort, to gripe about some comment Rick Santorum made.

    You bring up a good point about high-tech manufacturing jobs requiring highly skilled, and educated laborers. I don't see higher education as the solution for shortage, at least as higher education stands today. We would need a way to directly influence students to pursue technical or science/math degrees. This simply isn't happening. From an objective economic and competitive standpoint, an English major who cannot pay back loans is pure dead weight.

    Furthermore, I'm not convinced that even a four year technical degree, complete with suffocating debt, is the best conduit for these skills and jobs. I think public/private partnerships, apprenticeships and on-the-job training programs are the best way to address these nuanced skills. You can get a four year engineering degree (but let's be honest, a small fragment of Americans pursuing higher education have the intellectual fortitude to be engineers - I don't!), get a broad smattering of knowledge and still have to learn a bunch of nuanced, job-specific tasks.

    I know you're not going for an all-out explanation here, but you can't ignore the elephant in the room. College costs have risen faster than inflation and even faster than oft-reported healthcare costs. A big part of this has to do with state budgets being in crisis. But it also has a lot to do with sheer supply and demand. College degrees are "essential", so there's ballooning demand, but the supply remains relatively fixed.

    Also, the people who run private colleges are assholes.

    It is impossible to divorce this issue from the history. In less than a century college went from being an option only for would-be professionals (law or medicine) to being essential for just about any white collar or highly skilled blue collar job (as you point out). There was a time when you could pay your way to a four-year degree with very modest loans and a part-time job. The GI Bill gave unprecedented access to higher education as well. But this all took place when the US was booming and it was still a "developing" country. I'm talking literal development of infrastructure and industry. The US today is essentially tapped. Yes, development continues but it isn't the driving force it once was. Part of this is the tepid recovery, but really it's a lack of competitive advantage. Yes, I've read the stats about how many high-skill manufacturing jobs are vacant because they can't find qualified applicants. But at the same time Americans are over-educated from a global competition standpoint. A liberal arts degree is supposed to "teach us how to think" (gag!), to prepare us to be intelligent, innovative managers. Well there is a limit to just how many jobs fit this need.

    I would go even further than "not everyone should go to college" and say that "many people should DEFINITELY not go to college". While we're at it, many people should not own a home and many people should not spend outside their means (you know how ill-prepared for retirement Americans are? And not just baby boomers).

    Our current college-industrial complex (yep I made that up) is part and parcel with America's continued illusion of grandeur. In my opinion this is the most dangerous bubble of them all.

    P.S. don't call them "Wallstreeters". At least refer to "investors" or "finance professionals". Yeah, "Wallstreeters" held the derivatives that helped to bring down the financial system, but the loan originators were all over the U.S. The worst were in the sunbelt - the southwest, Nevada, California and Florida.

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  2. One of my favorite bloggers, James Altucher, has laid out many alternatives to college. His biggest issue is the crippling effects of debt.

    http://www.jamesaltucher.com/2011/01/8-alternatives-to-college/

    He also got called out directly by Georgetown. Pretty funny post here:

    http://www.jamesaltucher.com/2012/03/why-did-georgetown-university-call-me-out/

    I don't agree with everything he says, but he's a smart dude. Just some food for thought.

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  3. If it seemed as though I was griping about Rick Santorum, that was not the intention at all. I was actually giving him credit for making a good point that got overlooked by the idiocy with which he made it: that college, in the way we traditionally conceive of it, isn't and shouldn't be the only path to a good life.

    I think you and I are essentially arguing the same thing here. You're absolutely right - not everyone should go to "college," as it exists in our imagination. But that's part of the problem. Our very idea of college is defined by a split between "professionals" and blue collar workers that is outdated. The white collar and blue collar split stems from the idea that there are jobs where you go to college and jobs where you only need a high school degree. It's the absence of jobs in the latter category that drove more people to think college was necessary; now, with a degree being worth less than it used to be, the entire system has been turned upside down.

    We think of "higher education" as being synonymous with the four-year liberal arts degree, when in reality it should mean any education beyond what one receives at the K-12 level. All of these apprenticeships you refer to? That's all post-secondary training. Similarly, those on-the-job training programs and public-private partnerships you mentioned exist largely out of collaborations between businesses and community COLLEGES.

    So the problem isn't "over-education," per se; it's the wrong kind of education, which stems from the misguided way in which we think about education in the first place. We have traditionally seen education as piling more years and pieces of paper on top of your resume, in the hopes that that will make you more successful. It's not like this anymore. A college degree is no longer a guarantee of success, just like those old-school blue collar manufacturing jobs requiring only basic skills are no longer there to support those who drop out of school.

    This is why I brought up K-12. We have volumes of research to show that the human brain has many forms of intelligence. So why are we still thinking in binaries - smart and dumb, "book smart" and "street smart," creative and not creative? And why is creative thinking still seen as ancillary to the "basic skills" that schools test students on? We still have a factory model of education in a country that started sending all of its old-school factory jobs overseas thirty years ago.

    The truth is that everyone should "learn how to think" (hiring managers for those high-skill manufacturing jobs also place an emphasis on problem-solving skills). Our entire education system needs to do a better job of developing well-informed and creative citizens, but that comes from being more responsive to the needs, interests, and unique abilities of all students. Instead we still put kids in a box from a young age, in preparation for an economy that doesn't really work that way anymore. People who go to four-year schools but don't really want to and aren't really prepared for it do so because they see few other options. But this is largely because there is a startling lack of awareness of the other opportunities that are out there (many centered around career and technical ed). At the end of the day, the failure rests mainly with our overall education system's inability to encourage kids to discover and pursue the unique things they are skilled at.

    America's illusions of grandeur are only at risk if we don't adapt our institutions and ways of thinking about such basic things as education to reflect the realities of the new century. That doesn't mean we should abandon all vestiges of tradition, but it does mean that the student loan problem is one more example of a 21st century issue that we're approaching with a 20th century mindset.

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  4. Take 3, finally got it. Saw James Altucher's blog. Interesting piece reacting to Georgetown, but I think he's writing, at least, with the same kind of either/or mentality I think we need to discourage.

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  5. So we all agree we need to reduce outstanding student loan debt, don't necessarily agree on whether that means fewer people should go to college. The other way to mitigate the problem is to decrease the cost of college. Some ideas -

    1. Make college shorter, 3 years instead of 4. This is actually the norm in a large part of the world. Maybe it wouldn't work for BS degrees, but I really don't think you need to work on a BA for 4 years. Financing 150k is better then financing 200k.

    2. Reduce non-academic expenses. There needs to be a serious discussion about why the cost of college is rising so fast, and what percentage of that is tied to expenses that are non-academic. Administrative overhead, Athletic programs and facilities, nice dorms and buildings. Technology should help to cut down overhead even more - online classes. Anything you were going to learn in an intro-level huge lecture hall style class where the Professor just blows through a PPT, you can learn from an online class.

    3. Enforce more accountability. Colleges get away with a lot of ridiculous marketing and need to be forced to be honest in publishing the amount of students that graduate with debt, the amount of debt, how long it takes to get repaid, employment figures and salaries of graduates. For law school especially, this is a huge problem. This was actually the first year where Law schools really got exposed for the number of graduates who are actually working as lawyers - before they would just report employment statistics, and claimed 90%+ of graduates were employed. Turns out on average, just over 50% are actually working as lawyers. I'd say that schools should not only be forced to disclose this information, but that these metrics should directly impact USWNR rankings.

    4. Having more students go to other forms of post-secondary education rather than 4 year institutions. Totally agree with what Tommy and Matt commented on - we definitely need to focus on increasing community colleges/post-high school vocational training. I also think more kids should see community college as a stepping stone to university rather than just jumping in. High schools should encourage kids to do 2 years of community college first, and then decide if they want to finance 2 more years, instead of deciding at the age of 17 if they want to finance 4 years. High school guidance counselors need to be more honest and upfront with kids who, at no fault of their own, often aren't very financially literate at the age of 17/18 and can't properly conceptualize what it really means to take out huge amounts of debt.

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  6. 5. Universities need to be more math/science focused. That means increasing the overall general education requirements for math and science, accepting more kids with a propensity to study math and science, and making a concentrated effort to have a higher percentage of students graduate with math and science degrees.

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