Is University Worth It? Part 2349

https://grantcoulson.files.wordpress.com/2014/04/incentiveseverywherepicturecorrect1.jpg?w=444&h=288

        Do not think about, write about or deal with  human behavior without determining the effects of incentives. It’s not their money, of course they’ll waste it.

    The crime rate in Baltimore is up significantly. Charging police for doing routine police work will have that effect.  The more paralyzed the police, the higher the crime rate.

    Wherein we see the results of sending everyone to university.

Don’t Go!
John Stossel

It’s graduation time! Have we learned much? No.

College has become a scam.

Some students benefit: those with full scholarships and/or rich parents so they don’t go deep into debt, those who love learning for its own sake and land jobs in academia and those who get jobs that require a college credential.

But that’s not most students.

Half today’s recent grads work in jobs that don’t require degrees. Eighty thousand of America’s bartenders have bachelor’s degrees.

<insert>

     Masters of mixology.

Politicians such as Hillary Clinton promote college by claiming that over a lifetime, college graduates "earn $1 million more." That statistic is true but utterly misleading. People who go to college are different. They’re more likely to have been raised by two parents. They did better in high school. They’d make more money even if they never went go to college.

Economist Bryan Caplan argues that there isn’t much evidence that college grads are paid more because they learned anything at college that is valuable to their jobs.

Getting into elite universities and graduating from them is mostly a "signaling" device, he says. It tells employers you’re a smart person, so employers can begin teaching you things you really need to know. Employers, not the colleges, turn out to be the ones making students valuable contributors.

<insert>

    And a very expensive signalling device it is.

This suggests college is more like a hurdle than an investment. It would be better if companies found cheaper ways to screen for talent than four years of college.

<insert>

    Such tests are illegal in most jurisdictions because they discriminate against minorities. They don’t fail the tests, the tests fail them.

Most of America’s prestigious universities started out as training centers for the priesthood and ways of confirming your status as part of the upper crust. In many cases, that’s still true today. Taxpayers shouldn’t be forced to subsidize that. But we are.

Now President Obama proposes spending more of your money on "free community college." Senator and presidential candidate Bernie Sanders goes further, proposing "free tuition" at four-year public colleges.

Of course, "free" just means taxpayers are forced to pay.

This is nuts. When government subsidizes services, people supplying those services get wasteful. Colleges now spend millions on manicured lawns and fancy gyms.

<insert>

     Government subsidies always means subsidizing waste.

A University of Missouri admissions officer bragged to my TV show crew about the university’s "day spa" and said when it comes to recruiting students, "more important than reading, writing and arithmetic" is giving "our Tigers spring break every time they step into the student recreation complex."

I’m happy that Missouri’s students like their luxurious gym, but I don’t want to help pay for it. If the school thinks its "day spa" is crucial for recruiting, let them sucker their own alumni into making voluntary contributions for it. Leave taxpayers alone.

Government subsidies encourage students who don’t belong in college to go anyway. Many don’t graduate, feel bad about themselves and end up deep in debt. The subsidies also invite schools to increase the cost of tuition.

Democrats complained we need Obamacare because health care costs "were skyrocketing." But while the cost of health care rose 296 percent over the past 30 years, college tuition rose 553 percent. College is now a grotesque spending bubble, funded by government, that’s about to burst.

Law professor Glenn Reynolds, author of "The Education Apocalypse," writes, "The rapid increase in college tuition began just about exactly the time the federal government started helping to subsidize college … (Y)ou don’t want to engage in subsidies that make universities more bloated and more inefficient."

But that’s what Obama and Sanders propose to do.

A more compassionate move would be to warn people that college is not as valuable as colleges advertise themselves to be.

PayPal co-founder Peter Thiel encourages students to escape the college trap by paying them $100,000 not to go to college and instead to found their own capitalist ventures.

If we really want to build a better future and not just keep going through the same old motions, experiments like that are a much smarter idea than throwing more money at the college bubble.

<end>

    Another quote from Thiel:

You know, we’ve looked at the math on this, and I estimate that 70 to 80 percent of the colleges in the U.S. are not generating a positive return on investment. Even at the top universities, it may be positive in some sense — but the counterfactual question is, how well would their students have done had they not gone to college? Are they really just selecting for talented people who would have done well anyway? Or are you actually educating them? That’s the kind of question that isn’t analyzed very carefully. My suspicion is that they’re just good at identifying talented people rather than adding value. So there are a lot of things about it that are very strange.

     This has all been said before, but no one listened. The college bubble is the inevitable result of decades of irrational reverence for education, any education.

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Days of Songs and Mirrors: A Jacobite in the ‘45.”
Cui Bono–Cherchez les Contingencies

 

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