If earning a college degree is such a great investment, why does government need to back student loans?
Update: If it is such a great investment, it also strikes me as odd that parents feel they need to save to pay for their kids’ college educations.
Our society places a great deal of priority on preserving precious childhoods as long as possible. I wrote about some of its effects in Too much education? and Your Mom was right: It pays to practice.
Others have written about it, too. Like, Is 25 the new 15? (HT: Instapundit). I believe so. Which means 15 is the new 5, or maybe 8. When my nephew turned 13, I told him that he was just two years younger than his grandpa was when he decided to move 8 hours away from home to a bigger city to get a job and be on his own for the rest of his life. This was a bit of a shock. It would have been to me at 13, as well. Or 15 and 18.
Instapundit, himself thought so back in 2002.
As Thomas Sowell said about the spending elected officials might choose to cut when forced to (even though they themselves were the ones that forced it as a result of an earlier political ploy that backfired):
Back in my teaching days, many years ago, one of the things I liked to ask the class to consider was this: Imagine a government agency with only two tasks: (1) building statues of Benedict Arnold and (2) providing life-saving medications to children. If this agency’s budget were cut, what would it do? The answer, of course, is that it would cut back on the medications for children. Why? Because that would be what was most likely to get the budget cuts restored. If they cut back on building statues of Benedict Arnold, people might ask why they were building statues of Benedict Arnold in the first place.
Today, The Wall Street Journal Opinion comments on the Administration’s all to transparent and silly usage of the tactic Sowell described (emphasis mine):
Remember when the sequester’s spending cuts were going to incite mass uprisings for higher taxes? Instead, Senate Democrats and the White House blinked, not least because the FAA’s transparent political strategy was to use incompetent government as a bludgeon on behalf of bigger government. The American public waiting in departure lounges figured this out, which is presumably why the political capitulation is so total.
They also agree that we should get government out of air traffic controlling and point to several other countries that have already taken the grubby politician’s fingers off these pawns:
To wit, Congress ought to abolish the FAA and privatize the air navigation system the way that Canada and other developed countries have. A nonprofit corporation funded by user fees would make better cost-benefit decisions, tap capital markets, replace old-fashioned technology in a timely way and discipline high labor costs.
In addition to NavCanada, Germany, France, Australia and more than 50 others have made the transition to commercial airspaces. No less than Al Gore tried do this when he was Vice President, only to be routed by the unions. Republicans should try again as a plank of a platform to reform and modernize a government that serves itself before it serves America.
Finally, let’s play the ‘imagine if it were a Republican administration’ game. How do you think the media would have covered the air traffic controller furloughs if it were Republicans deciding to delay flights as a political ploy? It’d probably look a lot like this (thanks to Reason Magazine for the pointer):
Question: Why isn’t air traffic control function of the FAA fully funded by air travelers and, instead, partially funded by Federal taxes?
Answer: So the air traffic controllers can be used as political budget pawns.
Advocates of government spending are enjoying the recent news that errors were discovered in an often quoted 2010 analysis by economists Reinhart and Rogoff that showed countries with debt at levels (resulting from high spending) greater than 90% of GDP had an average GDP growth rate of -0.2%, which was statistically lower than countries with lower debt levels.
Recent corrections show that these countries actually had averaged 2.2% growth, not -0.2%, which is not statistically different from countries with lower debt levels.
Critics have accused R&R’s analysis of spurring irresponsible austerity in government spending and may have prevented more beneficial government stimulus spending around the world.
But, wait. The corrected analysis shows that countries with lower debt had higher GDP growth rates ranging from 3.1% to 4.2%. Yep. In this data set, apparently 2.2% is not statistically different from 4.2%.
That doesn’t mean that the data shows that government spending helps (or hurts) GDP. It also doesn’t mean that ‘austerity’ hurts or helps.
To be clear…it means nothing. Government spending advocates are not wise to use the the corrected stats bolster their case.
Not statistically different means that from the size and sample of this set of data, it cannot be concluded with high confidence that the differences in GDP growth rates are caused by the differences in debt levels. But, it doesn’t rule it out either.
If anything, the analysis still provides directional support that debt may hurt, rather than help.
Personally, I’m not a fan of GDP. I explain why here, here and here. Basically, it’s because GDP treats an expense like an income.
Alex Tabbarok of Marginal Revolution thinks apprenticeships deserve more respect, as he links to and quotes from a Financial Times article about German apprenticeships. I agree.
According to the article, more than 40% of Germans become apprentices compared with 0.3% of Americans.
I think many Americans go through informal apprenticeships. It’s better known as on-the-job training. It’s just that we usually start these much later life than we need to. We should and could start at around 16 or 17 years old, but we generally delay it into the 20s occupying the ensuing 5 or 6 years with a heavy dose of marginally productive liberal arts programming sold on the notion it produces well-rounded individuals.
However, I’ve met plenty of well-rounded individuals who skipped the formal programming. They became well-rounded by pursuing their interests and fulfilling their curiosities, rather than checking off a list produced by unproductive do-gooders.
I love cheap and simple solutions.
For $2.99 the Zip-It drain cleaner is worth it. It’s it’s a long zip tie with serrated hooks to pull debris from drains. Stick it down your shower drain and beware what you’ll hook on to. It’s a bit like if the devil had a bad twin.
Mark Perry links to and quotes from this Investors Business Daily editorial. I’ll also quote it:
Of the estimated 1 billion people who will observe Earth Day worldwide this year, few will know about the progress that has been made. Fewer still will know how it was made. The media, uninterested in looking at the real story, will simply credit the environmental movement for the improvements.
We won’t discount the movement’s contribution. Four decades ago, it helped show the world the value of global stewardship. But that movement is no longer interested in a cleaner world.
Filled with extremists and anti-capitalist crusaders, its primary goals have changed. Topping the agenda of today’s environmentalist groups is the pulling down of market economies, the raising up of central planning for egalitarian goals, forced lifestyle changes and the vilification — in hopes of the elimination — of signs of wealth.
None of these advance the planet’s environmental health. But capitalism has. Through wealth generated by the free market, we have enough resources to move beyond the subsistence economies that damage the environment, enough disposable income to fund clean-up programs, enough wealth to scrub and polish industry.
Only in advanced economies can the technology needed to recycle hazardous waste or to replace dirty coal-fired power plants with cleaner gas or nuclear plants be developed. That technology cannot be produced in centrally planned economies where the profit motive is squelched and lives are marshalled by the state.
There’s nothing wrong with setting aside a day to honor the Earth. In fairness, though, it should be complemented by Capitalism Day. It’s important that the world be reminded of what has driven the environmental improvements since Earth Day began in 1970.
It amazes how so few people recognize where their bounties come from.
One unintended benefit of having cameras on so many devices and a way to share those with everybody instantaneously was that speed at which the Boston Marathon bombing suspects were ID’d. That’s one benefit of crowd sourcing.
On the back-end, police took the crowd out of the game by locking everyone down. I can certainly understand the safety concerns, but the trade-off, perhaps, was a longer time to apprehension as the owner of the boat where the “white cap suspect” was hiding said he may have discovered that sooner if he had not followed the lock down orders.
In the Wall Street Journal, columnist Holman Jenkins writes about Ron Johnson’s term as JC Penney chief:
Every human effort is flawed. Failure is not proof of incompetence. So don’t buy the narrative that Mr. Johnson was done in by his hubris and cluelessness about retail. At Sears starting in 1989, a new leader introduced a new strategy of dramatically reduced promotions and manipulative “discounts.” Instead, Sears would feature “everyday low prices,” in-store boutiques and jazzier merchandise. Yes, the same formula. And Mike Bozic lasted the same 17 months that Mr. Johnson did.
I agree that failure is not proof of incompetence. But failure isn’t the reason Johnson has been charged with hubris. It’s not clear to me from Jenkins’ column why we shouldn’t buy the hubris narrative.
Johnson’s hubris was that he made network-wide changes to the business without evidence those changes would help. He never considered that he could be wrong. Some folks like it when someone swings for the fences, but shareholders should be leery when someone comes in with a shoot from the hip attitude. It’s the rare occasion that ends well.
If Johnson’s strategy would have worked across the entire network, it would have worked on a smaller scale, first. He could have made the changes in a market, at much less cost and risk to business. Not testing his ideas first, when he has the ability to do that, is hubris…or stupidity, or a little of both.
Our Dinner Table 