The Cynical Economist

College Education! huh-yeah

What is it good for?

Absolutely nothing

Uh-huh

First lets start with Paul Krugman’s post at NYT April 29th  2012 - “Wasting Our Minds” .

In it he attacks Mitt Romney calling him a silver spoon born elitist, who doesn’t care about the struggles of the young people seeking higher education and just encourages them to borrow and risk money to get ahead…

Let’s start with some advice Mitt Romney gave to college students during an appearance last week. After denouncing President Obama’s “divisiveness,” the candidate told his audience, “Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.”

The first thing you notice here is, of course, the Romney touch — the distinctive lack of empathy for those who weren’t born into affluent families, who can’t rely on the Bank of Mom and Dad to finance their ambitions. But the rest of the remark is just as bad in its own way.

I mean, “get the education”? And pay for it how? Tuition at public colleges and universities has soared, in part thanks to sharp reductions in state aid. Mr. Romney isn’t proposing anything that would fix that; he is, however, a strong supporter of the Ryan budget plan, which would drastically cut federal student aid, causing roughly a million students to lose their Pell grants.

But Krugman fail to point who’s fault is that the college education cost more and more every year.

It is the colleges and universities that are raising the prices and it is because of the government willing to give almost everyone easy money to go to college.

If students has to be mad at someone for the ever rising tuitions, they should be  mad at their college/university administrations

Then you have the democrats accusing the republicans of not willing to vote to keep the interest rates on the education loans low. Well guess what - It Is Not The Interest Rates…It Is The Sticker Price

First of all, the current legislation that is sucking all of the air out of the room is just not very impressive, because it is not the interest rates that are compelling citizens to take up residence in public spaces across the country- it is the sticker price on colleges, and the predatory foundations of the lending system that stand behind them.

Secondly, the legislation in question only affects a small portion of loans, namely, undergraduate, subsidized Stafford loans.  Moreover, the current interest rate is 3.4%, and keeping this fixed as opposed to allowing it to double to 6.8% really does not impact the borrower’s bottom line very much. Most importantly, this legislation does absolutely nothing to control the (nearly) hyperinflation that has gripped academia for years and decades.  This is not to say this is unneeded legislation.  It is needed.  But if President Obama thinks that he can phone this one in, and be done with the student loan issue for a while, he had better think again.

The way to affect college pricing meaningfully is to freeze, or even lower the federal lending limits on federal student loans.  This will not happen until the Federal government has skin in the game on the side of students, instead of against them, due to the absence of bankruptcy protections.

And I really do not understand why everyone has to get a college education. We must promote a educational system that make people think rather than make drones knowing everything in the world but who do not have an opinion for anything. Consider the following reading - Creating Innovators: Why America’s Education System Is Obsolete 

“Today knowledge is ubiquitous, constantly changing, growing exponentially… Today knowledge is free. It’s like air, it’s like water. It’s become a commodity… There’s no competitive advantage today in knowing more than the person next to you. The world doesn’t care what you know. What the world cares about is what you can do with what you know.”

America was great not because everyone was entitled to college education, but because everyone was free to express their ideas and realize them even without going to college. A lot of America’s great companies were started by people who are college drop outs. Again - The world doesn’t care what you know. What the world cares about is what you can do with what you know.

And here is another good article that confirms the above - Get Over It: The Truth About College Grad ‘Underemployment’

It’s just plain arrogant for anyone to consider their job underemployment. We have two concerns about this idea of “underemployment”:

• First, when people get a job, there is nothing stopping them from making their own luck.
• Second, reinforcing this idea of “underemployment” contributes to a culture of “entitlement”.

Let’s talk about making your own luck:

• One woman we know was a graduate of one of the finest universities in the U.S. with a very high GPA. When she graduated, she wanted to live in Los Angeles. And the only way she could live there was to get a job. It was hard to get a job, so she took a clerical position. And over the next few years, she watched, listened and got a bunch of accreditations.  Eventually, she evolved in her career and is today one of the top people in her field and very comfortable.
• A young man we know got a joint dance and business degree. What, exactly, do you do with that? No worries. He got a job selling ladies shoes on a commission-only basis; today, he is the top sales person for a leading retail chain and well on the way to success.
• Another woman we know had a baby during her senior year at a prestigious research institution. She knew she had to get a job immediately upon graduation and that the job market was tough; her degree in Animal Science guaranteed her nothing. So she created a position supporting a research lab. Nonetheless, she distinguished herself as a go-getter with unique ideas. She became highly sought-after in her original field and, ultimately, created several new opportunities and grew them. She now makes more money and more important decisions than most people she knows with twice as much education.
• And then there’s the man who graduated from an engineering school in his home country. But when he came to this country, the only job he could get was serving food in one of the ethnic restaurants of his upbringing. Over time, he leveraged this and became the president of a company that consults to small businesses and restaurants. Clearly, he has done quite well.

We all know stories like these. They are not just the occasional “Horatio Alger” tale. They are all around us.

Now let’s look at this issue of reinforcing the idea of entitlement.

We are all surrounded by mass media about the rare few who live glamorous lives and, seemingly, have anything they want.  This, along with other things, have led to an increasing sense that anyone is entitled to that life, without working for it.

But if a person with a 4-year degree can only get a job at Starbucks, McDonalds or a relatively low-level clerical job, they should take it. Where on a college diploma does it provide a guarantee of a certain caliber job? University is not trade school. Although for anyone who believes they are underemployed upon graduation, perhaps trade school would have been a better choice.  Should any of the people described above have passed on their opportunities because they were entitled to more?

Yep, here is a flash news for you – the college education does not guarantee that  you will be successful in life…

Anyway…if you are graduating you may be as well read the 10 Things Your Commencement Speaker Won’t Tell You 

Class of 2012,

I became sick of commencement speeches at about your age. My first job out of college was writing speeches for the governor of Maine. Every spring, I would offer extraordinary tidbits of wisdom to 22-year-olds—which was quite a feat given that I was 23 at the time. In the decades since, I’ve spent most of my career teaching economics and public policy. In particular, I’ve studied happiness and well-being, about which we now know a great deal. And I’ve found that the saccharine and over-optimistic words of the typical commencement address hold few of the lessons young people really need to hear about what lies ahead. Here, then, is what I wish someone had told the Class of 1988:

1. Your time in fraternity basements was well spent…..

From WSJ
By Robert Frank

One of the most controversial issues surrounding inequality is work effort.  Some on the right argue that  top earners are successful in part because they work harder than others. Many on the left argue that the middle class and poor work just as hard – maybe even harder, with multiple jobs — but that the economic deck is stacked against them.

A new study offers evidence  that higher-educated (and therefore higher-earning)  Americans do indeed spend more time working and less time on leisure than poorer income groups. In fact, while income inequality may be growing, “leisure inequality” – time spent on enjoyment – is growing as a mirror image, with the low earners gaining leisure and the high earners losing.

The paper, by Orazio Attanasio, Erik Hurst and Luigi Pistaferri, finds that both income inequality and consumption inequality (the stuff that people buy) have increased over the past 20 years.

The more surprising discovery, however, is a corresponding leisure gap has opened up between the highly-educated and less-educated.  Low-educated men saw their leisure hours grow to 39.1 hours in 2003-2007, from 36.6 hours in 1985. Highly-educated men saw their leisure hours shrink to 33.2 hours from 34.4 hours.  (Mr. Hurst says that education levels are a “proxy” for incomes, since they tend to correspond).

read the rest here

From Carpe Diem

From Jeff Jacoby in today’s Boston Globe:  

“For decades, American politicians have waxed passionate on the need to put college within every family’s reach. To ensure that anyone who wants to go to college will be able to foot the bill, Washington has showered hundreds of billions of dollars into student aid of all kinds — grants and loans, subsidized work-study jobs, tax credits and deductions. Today, that shower has become a monsoon.

The College Board, which tracks each type of financial assistance in a comprehensive annual report, shows total federal aid soaring by more than $100 billion in the space of a single decade — from $64 billion in 2000 to $169 billion in 2010. And what have we gotten for this vast investment in college affordability? Colleges that are more unaffordable than ever. Year in, year out, Washington bestows tuition aid on students and their families.

Year in, year out, the cost of tuition surges, galloping well ahead of inflation (see chart above). And year in, year out, politicians vie to outdo each other in promising still more public subsidies that will keep higher education within reach of all. Does it never occur to them that there might be a cause-and-effect relationship between the skyrocketing aid and the skyrocketing price of a college education? That all those grants and loans and tax credits aren’t containing the fire, but fanning it?

Directly or indirectly, government loans and grants have led to massive tuition inflation (see chart). That has been a boon for colleges and universities, where budgets, payrolls, and amenities have grown amazingly lavish. And it has been a boon for politicians, Republicans and Democrats alike, who are happy to exploit anxiety over tuition to win votes.

But for students and their families, let alone for taxpayers who don’t go to college, it has been a disaster. The more government has done to make higher education affordable, the more unaffordable it has become.”

MP: The chart above shows that the rising costs of a college education (7.5% per year) have far outpaced rising medical costs (5.7%)  and housing prices (4.2%), and have risen annually at twice the average inflation rate (3.8%).  The graph also illustrates that the rising costs of college and the resulting college tuition bubble make rising U.S. home prices and the resulting housing bubble look relatively inconsequential by comparison.

From NRO
By Patrick Brennan

Their excesssive demands squeeze local governments.

Terry List, a teacher in Saginaw Township, Mich., has a depressing lesson for her students: “I would not recommend to my pupils to become a teacher in Michigan.”

What’s discouraging her? A proposed pension-reform bill in Michigan would derail her plans to retire — at age 47.

After these rapacious reforms, List would have to work another 16 years, to age 63, in order to earn her retiree health-care benefits. “I understand we have to tighten our belts,” she laments, “but we don’t have to use a tourniquet and cut off the blood supply entirely.” Under the reforms, such a tourniquet means she could still retire now and have a guaranteed income for the rest of her life, but she’d have to pay for her own health care until age 65 — like, you know, most Americans.

………………………………………

Until recently, employees of the Massachusetts Bay Transportation Authority enjoyed “23 and out” pensions. No matter when they began their careers, they could collect nearly full pensions after 23 years on the job. (That has been raised to the a punishing figure of 25 years, and now with a minimum age of 55 before they can collect.) Perhaps the most famous member of the organization that negotiated these benefits, the Boston Carmen’s Union, is Patrick Bulger, son of longtime Massachusetts state-senate president Billy Bulger. The younger Bulger retired from the Carmen’s Union at 43 and began collecting an annual pension of $41,000. Plus cost-of-living adjustments. For the rest of his life.

It’s hard to justify such benefits when the rest of America relies on 401(k)s, Social Security, and Medicare, making their effective retirement age, on average,  63 — and soon to rise. Public employees retire still very much in their working years. Even though they’re guaranteed financial security for life, some of them in “retirement” go on to lucrative jobs in the private sector — or, more disturbingly, back in the public sector. Take retired MBTA manager Michael Mulhern, age 48, who now enjoys a $130,000-a-year pension — and earns $225,000 a year as executive director of the MBTA’s retirement fund.  

………………………………………

As a 2007 GAO report explains, rising health-care costs make these promises extremely difficult, almost impossible, to account for — when state and local governments even bother. They usually don’t. Few still rely on pay-as-you-go budgeting for pensions, though it remains common for health care.  

By almost every measure, public-sector unions have managed to extract excessive levels of retirement benefits from governments, whose obligations have been vastly increased by the early ages at which the benefits can be claimed. That the benefits enjoyed by public employees already are more generous than anything the average American knows, and that they can enjoy them at an age when the average American is still working, isn’t just adding insult to injury. It’s adding kerosene to tinder.

read the rest here

 Welcome to our brave new world, where we will live in  a repressive and controlled state, where the authority will be monitoring our every move, where nowhere is going to be safe from the big brother’s eye, where the thought police can treat us as a criminals…

 FBI warns of threat from anti-government extremists - 

 Anti-government extremists opposed to taxes and regulations pose a growing threat to local law enforcement officers in the United States, the FBI warned on Monday.

These extremists, sometimes known as “sovereign citizens,” believe they can live outside any type of government authority, FBI agents said at a news conference.

The extremists may refuse to pay taxes, defy government environmental regulations and believe the United States went bankrupt by going off the gold standard.

Never Let A Crisis Go To Waste: Holder Uses Fast And Furious To Push Congress For Stricter Gun Control Laws… - 

Attorney General Eric Holder attributed the difficulty preventing gun-trafficking into Mexico to weak gun controls laws, when he blamed on the U.S. House, with particular reference to the House investigators asking him about Operation Fast and Furious.

Drones over U.S. get OK by Congress - 

Look! Up in the sky! Is it a bird? Is it a plane? It’s … a drone, and it’s watching you. That’s what privacy advocates fear from a bill Congresspassed this week to make it easier for the government to fly unmanned spy planes in U.S. airspace.

“There are serious policy questions on the horizon about privacy and surveillance, by both government agencies and commercial entities,” said Steven Aftergood, who heads the Project on Government Secrecy at the Federation of American Scientists.

The Electronic Frontier Foundation also is “concerned about the implications for surveillance by government agencies,” said attorneyJennifer Lynch.

The provision in the legislation is the fruit of “a huge push by lawmakers and the defense sector to expand the use of drones” in American airspace, she added.

According to some estimates, the commercial drone market in the United States could be worth hundreds of millions of dollars once the FAA clears their use.

The agency projects that 30,000 drones could be in the nation’s skies by 2020.

LONDON MAN OBSERVED BY CCTV & WARNED BY LOUDSPEAKER

Spying on Europe’s farms with satellites and drones - 

Farmers who claim more EU subsidies than they should, or who break Common Agricultural Policy rules, are now more likely to be caught out by a camera in the sky than an inspector calling with a clipboard. How do they feel about being watched from above?

Imagine a perfect walk in the country, a few years from now – tranquillity, clean air, birdsong in the trees and hedgerows, growing crops swaying in the breeze.

Suddenly a model plane swoops overhead.

But there is no-one around manipulating radio controls. This is not a toy, but a drone on a photographic mission.

Meanwhile, hundreds of kilometres up in space, the same patch of land is being photographed by a satellite, which clearly pinpoints individual trees and animals.

What is there to spy on here? No secret military installations, just farmland.

Dependency Index Surges 23% Under President Obama - Soon the government will own us…

The American public’s dependence on the federal government shot up 23% in just two years under President Obama, with 67 million now relying on some federal program, according to a newly released study by the Heritage Foundation.

The conservative think tank’s annual Index of Dependence on Government tracks money spent on housing, health, welfare, education subsidies and other federal programs that were “traditionally provided to needy people by local organizations and families.”

The two-year increase under Obama is the biggest two-year jump since Jimmy Carter was president, the data show.

The rise was driven mainly by increases in housing subsidies, an expansion in Medicaid and changes to the welfare system, along with a sharp rise in food stamps, the study found.

Apple and Foxconn: Who made your iPhone? -  In China the Government already owns the citizens

1984 George Orwell Movie Trailer - “A nation at war, where terrorism is exploited by the state, where media is controlled, a total surveillance society and every citizen is a property of the state…”

Equilibrium – Citizen:”You can”t do this, you can not do this”….

Government Agent(cleric): “There is nothing, that we can not do”

Demolition Man - Citizen Edgar  Friendly: “I am the enemy, cause I like to think, I like to read, I am in for freedom of speech and for freedom of choice…”

Iron maiden - Brave new world - 

Dying swans twisted wings, beauty not needed here
Lost my love, lost my life, in this garden of fear
I have seen many things, in a lifetime alone
Mother love is no more, bring this savage back home

Wilderness house of pain, makes no sense of it all
Close this mind dull this brain, Messiah before his fall
What you see is not real, those who know will not tell
All is lost sold your souls to this brave new world

A brave new world, in a brave new world
A brave new world, in a brave new world
In a brave new world, a brave new world
In a brave new world, a brave new world

Dragon kings dying queens, where is salvation now
Lost my life lost my dreams, rip the bones from my flesh
Silent screams laughing here, dying to tell you the truth
You are planned and you are damned in this brave new world

Motörhead - Brave New World - 

So this a new beginning, as the new century dawns
The world’s a better place for you and me
Shouldn’t smoke or drink or watch that evil filthy porn.
Be Christian and God will set you free.
But being poor is worse than having AIDS,
The homeless live in boxes at our feet
Living in a constant state of dull frustrated rage,
The innocent shot daily in the street

Brave new world, brave new world, brave new world

The government has always been your pal, as you well know
Absolute corrupted power play,
If we all wipe each other out, it only goes to show
While the bureaucrats get richer by the day,
Smoking dope will get you more than murder one,
And even worse than statutory rape,
Don’t understand your children, so you send them all to jail,
Believe me, you will never make a worse mistake.

The government is coming and it wants to be your friend,
It wants to show you how to be a snitch
Inform upon your children, the inevitable end,
Is everyone’s a victim but the filthy fucking rich,
And religion, like the monster that it is
Keeps telling you to turn the other cheek
God is on your side, but I don’t think that you’re on his,
If Jesus showed up now he’d be in jail by next week.

LOL…

Cop chases himself after being mistaken for burglar by CCTV operator

AN undercover cop “chased himself round the streets” for 20 minutes in a town in southern England after a surveillance camera operator wrongly identified him as a suspect.

I Got 15 Kids & 3 Babydaddys-SOMEONE’S GONNA PAY FOR ME & MY KIDS!!! - Let others pay for my mistakes mentality…

Will “Generation Gimme” Ever Work For The American Dream? - Jaw dropping!

Obama Is Going To Pay For My Gas And Mortgage!!! - That was in 2008. Is she better now than 3 years ago? I bet she is in worst position now, but she probably blaming other people for that.

And what the top Elite thinks about the future….

Is it bright and rosy?

For them it is, but not for the rest of us

Barack Obama: My Kids Will Succeed… Even if USA Doesn’t - At the very end of his campaign speech in New York…

Our kids are going to be fine.  And I always tell Malia and Sasha, look, you guys, I don’t worry about you — I mean, I worry the way parents worry — but they’re on a path that is going to be successful, even if the country as a whole is not successful. But that’s not our vision of America.  I don’t want an America where my kids are living behind walls and gates, and can’t feel a part of a country that is giving everybody a shot.

And that’s what we’re fighting for.  That’s what 2012 is going to be all about.  And I’m going to need your help to do it. (Applause.)

So, thank you, very much.  (Applause.)

That speech was given at fundraiser with a price tag of $35 000 a head

Now my question is why Obama is not campaigning at the Occupy Wall Street camp, since he loves them and they love him back?

May be that he is afraid they will ask him to give them something, instead of him asking them to give him something…

Oh, here is another one: What would Occupyers think of the prospects of their future compared to Obama’s daughters future?

Just saying…