THE SCARCITY ECONOMY

Lots of talk this week about higher education, specifically student loan debt forgiveness. Any plan that forgives student debt would have to be paired with some sort of plan for free public school, or else it would simply degenerate into spiraling tuition costs ("Who cares, just borrow it and never pay it back, kids!") and an indirect subsidy of higher education through the worst possible means.

There is a lot of resistance to free higher education in any of the forms that left-leaning candidates have proposed it, most of which fall into the predictable "Yeah well who's gonna PAY for it huh?" trough that American political discourse uses whenever something that doesn't directly and obviously benefit the wealthy is proposed. But I think there are two other important things going on with the resistance to free or at least heavily subsidized college.

One is that the "Education is the silver bullet" mantra on the center-left would be undermined. Right now we can keep convincing people that their economic struggles are their own fault; if only you had the right skills you'd be doing so much better! We are already seeing a generation that has discovered the flaws with that argument. It turns out, of course, that many of the problems with the job markets and the economy are structural and not at all within the control of the individual. Sure, go get yourself all the fancy skills you can. When the jobs are being shipped overseas or turned into gig economy, no-benefits type work, those skills aren't going to feel very valuable. And the constant emphasis on the "right" skills is a canard; what skills are in high demand changes constantly, and encouraging students to flock toward whatever the hot skill of the moment might be has long term consequences that will appear in 20 years when that skill is decidedly no longer hot.

The second issue is that, to be crass, credentials are only valuable if there is some scarcity. Education is always valuable in the abstract, improving what the individual knows and can do. But when high school graduation rates neared 90%, what happened to a high school diploma? It became nearly worthless except as a basic entree into employment. The same thing has started to happen to the Bachelor's Degree. With more than 1/3 of adults holding one in the U.S., it's often not worth much on the job market (mileage varying based on field and brand name). If the theoretical everyone has one, no one is going to benefit from having one.

So to some extent – and sadly this is quite logical – a lot of the opposition to truly throwing open the doors to higher education comes from people with higher ed credentials who don't want to see the inevitable watering-down of the things they've used to establish professional success. We're looking at a pool of politically important, professionally successful people who are thinking, I paid out the ass for my kid to go to ____ and now people are just gonna get a BA for free? It's not the most attractive logic (and not enough of a reason on its own not to make a public policy that benefits society as a whole) but I certainly understand it. I have an advanced degree, and if everyone in America suddenly had an advanced degree it would be worth significantly less (if that's possible). So, I get it.

That said, only people who completely ignore the numbers and the inequity of what this generation has been subjected to in order to get the college degrees we tell them they absolutely MUST have can argue that we don't need to do something aggressive about student debt. Look at what has happened to college tuition since 2000 and stop pretending like your experiences going to college in the 70s and 80s is in any way meaningful to the current conversation. This really is a debt "crisis" and it's impacting every area of the economy down the line. People aren't buying houses, cars, investments, vacations, and all that other crap we tell people they should do (for their own long-term economic good, but moreso because our economy depends on people doing those things) because they can't afford it.

I understand the resistance, but this isn't a problem that can be ignored. And it's better to start with the most aggressive possible idea – free college period, debt forgiveness period – since you know whatever "solution" eventually gets out of Congress is going to be watered down a million times anyway. Don't do the watering-down up front. I thought we learned that lesson in 2009.

23 thoughts on “THE SCARCITY ECONOMY”

  • "I thought we learned that lesson in 2009."
    Far too many spineless, pre-compromised "Democrats" did not learn this lesson.

  • Safety Man! says:

    Interestingly, the problem also extends to blue collar workers and Trade Unions. I work with students that apply for Union membership, and only a small percentage are granted. The reason, of course, is that if everyone was allowed into the Union it would dilute their bargaining power. I find this particular relevant since the standard answer these days is that the kids would be fine if they would just swing a hammer like their grandpappy.

  • But when high school graduation rates neared 90%, what happened to a high school diploma? It became nearly worthless except as a basic entree into employment. The same thing has started to happen to the Bachelor's Degree.

    In my experience, all but a few of the jobs that demand that applicants have a bachelor's degree just to apply do so as a way to discriminate without falling afoul of the law. When you see an employer listing a bachelor's degree as a prerequisite for a job operating video conferencing equipment, something that any middle school av club member could do, you know something is up.

  • There is a way to fix the supply and demand problem of higher education. In huge part, there are too many of the wrong degrees for this economy. So, debt given with the "wrong" degree is unmanageable with the incomes earned by graduates with those degrees. Yet, their education wasn't a bad investment. Their education, not their skills, is valuable. Yet, the economics of higher education are very broken. I think we can fix this. But that's "we" not "us" and "them." We could make college free and forgive student loan debt. But, it's way more complicated than that. I look forward to the serious folks on all sides working together….wait…back to reality. There isn't a middle ground proposal that has a chance…yet.

  • land_planarian says:

    I'm a little peeved that so many people are slipping out of admitting they don't want their credentials watered down by concern trolling parts of the proposal that were solved before they even knew about it.

    The Sanders/Omar/Jayapal/Ocasio-Cortez bills propose fully funding both free public college and debt relief with a small tax on stock trades. That'd have the side benefit of discouraging the volatility that comes with millisecond-by-millisecond speculation, and pretty much means that you could spend the revenue on country club memberships for the children of dentists and still be distributing wealth downwards.

    Yet we're still treated to the Third Way suddenly fretting about regressive taxation, and pretending billionaires would ever be caught dead sending their kids to a public college. It's wildly disingenuous.

  • I am divorced and my ex does not have a large income. My son just finished his first year and has $10k in debt.

    I have plenty in the 529 plan and was going to pay off the $5k that was not interest deferred. At this point I may wait until I see if any of these debt cancellation plans are real.

  • It's worth remembering what Ed wrote four years ago, in Can This 900 Pound Gorilla Pay Tuition?.

    Unless we find a way to reverse the trends that have made college way more expensive than it needs to be, shoveling even more students and cash into its gaping maw can only become even more unsustainable. Of course, it matters, at an individual level, who pays for higher education… but at a macro level, we're paying far too much, regardless of who pays it, into a bloated system that isn't even particularly good at what it is supposed to be doing (unless you consider that to be generating profits).

    All of which is sadly reminiscent of health care.

  • Thank you for finally saying what I've been screeching about for more than a decade, Ed. If supply and demand works anywhere, it works in labor markets. Going to college was only "the answer" when a BA was rare rather than common. Now employers use it as a base line filter to reduce the stack of job applications to a manageable amount.

    Despite what many are touting this isn't a skill mismatch, either. We are awash with STEM grads who can't find decent work because all fields have a structural upper limit. Bjarne Stroustrup stated in an interview that part of his motivation for creating C++ was companies like AT&T had drowned the world in C programmers and tanked their salaries.

    So yes, as a simple matter of fairness, we have to do both. Then we have to limit the number of openings at those public colleges. If not, we get exactly the same situation as we now have with a HS diploma – everybody has one so they have zero market value.

  • While looking for something else, I ran into an article about a situation that never really went away, but that Betsy DeVos is trying to bring back.

    New York Times, May 31, 1945

    Fake Colleges Wait to Mulct
    GI Student, Educators Warn

    by Benjamin Fine

    "A number of fly-by-night schools and "colleges" designed to exploit the returning veteran who wants to continue his education and is eligible to receive $500 in tuition fees from the Government under the GI Bill of Rights, have been established in various parts of the country…"

    …"Exhorbitant fees are charged for special "refresher courses"…

    "'I have heard that some institutions have been established to catch the returning veterans,' Dr. Guy E. Snavely … commented … "These schools are not interested in the veteran–they just want his $500."

  • The Liberal says:

    Let the elders of the DNC decide who is eligible for college. Need and dollar amount should be based solely upon by how much historically you've donated to the Democratic Party. Only those of the professional-class need apply.

  • We have 'free' high school for everyone, plus private schools. Why not have 'free' public universities? plus private schools…

  • Thanks to "The Liberal" (snork) for clearly stating the real policy positions of the Democratic Party candidates.

    On the other hand:

    Demo: Bashing the Democratic Party may not solve anything, but it sure feels good.

  • America is such a crazy place. Universities used to be free in America up until the very recent past and now that it isn't free the idea of making it free is abhorrent. Weird.

  • Debt overall is too high IMO, and the traditional way to bring its value down in real terms is inflation. To my understanding anyway. Make dollars easier to get and mortgages and car loans and student debt get easier to repay, and their underlying value is less likely to be underwater. Easing bankruptcy would help too, although it seems there should be some mechanism to allow loans for students for whom it would be rational to just graduate and try to get the debt dispelled. Providing a free or cheap public education in fields the economy seems to be demanding isn't a terrible idea, but it shouldn't just be a blank check to existing institutions.

  • Creigh Gordon says:

    There needs to be a dignified place in our society for people who don't have an extensive formal education. There is no shortage of useful things that could be done for ourselves and the planet. The problem lies in an economic system that fails to recognize those things as worthy of support.

  • There is nothing undignified about the work of Deltas, or Epsilon semi-morons with a vacuum cleaner or a shovel. Automation is the enemy.

  • Troll, as usual, has nothing to offer but a pointless comment criticizing something he knows FUCK ALL about.

    Get used to seeing this word salad of yours:

    "I'm not here to argue when viability occurs, not even that it it a feasible or necessary test. Over my pay grade. My point was and remains that Blackmun and his successors intimated there is or should be a point at which Constitutional rights of personhood inhere in a fetus. Exponential advances in science and technology are thus quite germane in this connection, which leftists here and elsewhere elide by dismissive reference to religion and by dishonestly ignoring either viability in Roe or another test." (6/13/2019–1:40PM)"

    every time I come across one of your "for shitstirring purposes, only" diatribes here.

    Enjoy it with a nice bucket of warm piss (which is what your comment is worth) courtesy of Cactus Jack. Asshole.

  • Demo: One can only imagine what Troll says about those who are not Creators of Wealth and Masters of the Universe on the Dark Web forums he participates in when he does not deign to drop in here with his smell brown words of wizardry.

  • What lesson? The watering down of remedies for working America in 2009 was a feature, not a bug.

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