Not From The Onion

by on November 5, 2011 at 7:05 am in Current Affairs, Economics, Education | Permalink

Here’s an astounding illustration of my argument that “American students are not studying the fields with the greatest economic potential.”

The Nation: A few years ago, Joe Therrien, a graduate of the NYC Teaching Fellows program, was working as a full-time drama teacher at a public elementary school in New York City. Frustrated by huge class sizes, sparse resources and a disorganized bureaucracy, he set off to the University of Connecticut to get an MFA in his passion—puppetry. Three years and $35,000 in student loans later, he emerged with degree in hand, and because puppeteers aren’t exactly in high demand…he’s working at his old school as a full-time “substitute”…[earning less than he did before].

…Like a lot of the young protesters who have flocked to Occupy Wall Street, Joe had thought that hard work and education would bring, if not class mobility, at least a measure of security…But the past decade of stagnant wages for the 99 percent and million-dollar bonuses for the 1 percent has awakened the kids of the middle class to a national nightmare: the dream that coaxed their parents to meet the demands of work, school, mortgage payments and tuition bills is shattered.

What astounds me is not that someone could amass $35,000 in student loans pursuing a dream of puppetry, everyone has their dreams and I do not fault Joe for his. What astounds me is that Richard Kim, the executive editor of The Nation and the author of this article, thinks that the failure of a puppeteer to find a job he loves is a good way to illustrate the “national nightmare” of the job market. Even in a wealthy society it’s a privilege to have the kind of job that Kim thinks are the entitlement of the middle class. And, as Tyler says, we are not as wealthy as we thought we were.

In considering the plight of the puppeteer lets also remember that millions of the unemployed would be grateful to have a job that they don’t like.

By the way, should you be so inclined, Therrien has a Kickstarter project where you can voluntarily donate to create “a nationwide flowering of spectacle puppet theater joyously spreading a new public consciousness!” You may also wish to know that according to Mike Riggs at Reason:

The pro-puppet American Recovery and Reinvestment Act doled out $50,000 to the Center for Puppetry Arts in Atlanta; $25,000 to the Sandglass Center for Puppetry and Theater Research in Vermont; and $25,000 to the Spiral Q Puppet Theater in Philadelphia.

Mike Huben November 5, 2011 at 7:55 am

Here is an illustration that an anecdote does not constitute data.

But rather than point out this obvious observation, Tabarrok attempts to draw a different moral conclusion based on equally specious pseudo-reasoning.

Rahul November 5, 2011 at 8:47 am

What’s your implied point? Which conclusion are you objecting to?

rjs November 5, 2011 at 10:46 am

it is an anecdote, & he does draw a moral conclusion…it’s fair enough; one man’s trash is anothers treasure…

Tim November 6, 2011 at 11:16 am

He also searches out the Puppetry major rather than find the thousands of unemployed MBAs.

Michael November 7, 2011 at 11:53 pm

No, The Nation picked out the puppetry major and propped him up as a fair example.

Cliff November 5, 2011 at 10:43 am

It’s an illustration, not a study.

jk November 5, 2011 at 10:52 am

I guess you are one of the 99%? So where does Michael Moore, George Soros, Johnny Depp, Bono, etc fit in?

I wonder if Puppetry arts have movements/fads such as post-modernism. I can’t imagine how ridiculous it is to see late 20 to 30-something hipster grad students practicing for their midterm project with a Kermit toy in their local non-Starbucks coffee shop.

Austin November 5, 2011 at 1:22 pm

The basic point of Alex’s whole post is: some guy at the Nation has a misconception of what kind of work deserves to be highly paid. It’s a complete red herring, and it’s a shame that Alex isn’t confronting the real injustices that are ever-so obvious with the same gusto he does in this post. Lame.

Silas Barta November 5, 2011 at 4:06 pm

right, as long as you ignore the fact that the writer of the story was looking for the most sympathetic figure they could find, accomplishing the work that it would normally take a broader sample to achieve.

David Coplin November 6, 2011 at 1:17 am

While I agree with the disgust at the inequitable distribution of resources in our
current culture, I’m afraid that requiring the wealthy to upgrade their attitudes
will do little to correct the problem. What will correct the problem is spelled out
in the ebook referenced below.

Please review the economic principles proposed in the following ebook
http://www.smashwords.com/profile/view/povertyandthefoundationofeconomics
and comment on any errors that you find. If you do not have the time to do
this, I would appreciate your assigning the task to your friends as an exercise.

As long as we continue to use the western credit system as the primary driver of
economic production the wealthy will continue to control the means of economic
production and poverty will be a guaranteed result. The link above describes an
alternative economic system that will eliminate poverty and maximize economic
production.

Thank you for your time and attention in this matter.

Kevin Barnes November 8, 2011 at 11:04 am

I tried to read through it (the 15% you can preview) OMG, it’s awful. The author may or may not have something interesting to say, but it is a rambling screed and finding the point in the noise is a needle-in-a-haystack problem. Recommend a better book.

Hein November 6, 2011 at 9:09 am

The data was in the previous post. Click on “my argument.” Then read. I know you can do it.

Rich Berger November 5, 2011 at 7:59 am

Struck a nerve, didn’t it Mike?

Itchy November 5, 2011 at 8:08 am

The rest of the article is full of more Onion worthy quotes:

“Each day, the race to reproduce life itself at Liberty begins, and each day it is largely met, in theory at least, without the use of two things—the money-form and hierarchy.”

“… the Occupation is creating within the quadrants of Liberty Park the society it wants to see in the outside world … ‘We’re creating alternative models of the world we want to live in while also using those new institutions as a staging ground to fight for that world—that’s what’s radical and cool about occupations.’”

“For Katie, who comes from an anti-capitalist background, the appeal of OWS is “beyond political”: it is “spiritual and philosophical.” Her day-to-day work life is defined by the principles of horizontalism, autonomy and collectivism.”

It’s too bad that winter will come along and disperse them before the 53% of OWS start to resent the 47%. OWS is a great social experiment in which this Utopian idea is put to the test. Their economic model is that of a 3rd world country, in which all food and living supplies come from aid donations and not productivity.

Their collapse has the potential to be spectacular … Schadenfreude

Rahul November 5, 2011 at 8:43 am

WTF is horizentalism? Is that like a couch potato?

Juan November 5, 2011 at 9:13 am

Horizontalism is how the reproduction of life itself begins

zbicyclist November 5, 2011 at 9:51 am

Horizontalism: Sex
Autonomy: Resenting the older generation
Collectivism: But still willing to collect $ from the older generation.

Jan November 5, 2011 at 10:21 am

Moore, Basil (1988). Horizontalists and Verticalists: The Macroeconomics of Credit Money, Cambridge University Press. ISBN 0521350794

Itchy November 5, 2011 at 11:36 am

I think she actually means this: http://en.wikipedia.org/wiki/Horizontalidad

Jan November 5, 2011 at 3:27 pm

Not so much. Read the original.

Sean November 5, 2011 at 1:30 pm

It’s a pretty common business term too, which is at least semi-related. Horizontal organizations are ones in which the pyramid is flat. There are few levels of middle management, people have wide autonomy and, everyone has access to those above them. The alternative is the vertical or hierarchical organization.

This is one of those concepts that second rate business profs love to dwell on and students love to see come up on tests. If the question describes a positive scenario, pick “horizontal”. :)

Hyena November 5, 2011 at 2:37 pm

So… are you saying that horizontal structures don’t work well? They seem to work amazingly well, actually, if only because chains of command are shorter.

Noah Yetter November 6, 2011 at 9:18 am

Until you try to scale them. You cannot have a horizontally-organized company with 1000 employees. Even 100 is a stretch.

Bill November 5, 2011 at 8:20 am

What I think is very interesting about this post is that the author is DENYING the existence of a market when he says: “American students are not studying the fields with the greatest economic potential.”

Wait a second.

You are saying that buyers of educational services are massively uninformed, and the employer purchasers could not signal that there will be both a job AND money at the end of the road to correct this information gap???

I had the same reaction yesterday when I read the posts by STEM graduates saying how hard the course of study was. OK, so if it was hard, you would expect that there would be fewer STEM graduates and HIGHER STEM wages and employment opportunities.

Whenever I see an economist say an economic actor is not pursuing the course of its “greatest economic potential” I have to step back and ask some more questions. Why? If it is hard, then the market would pay a higher price, but obviously the price it offers for students employing “hard” courses of study is not high enough.

Unless you want to argue massive market failure, which is not what this site is known for.

TallDave November 5, 2011 at 9:31 am

There’s an easy solution: allowing student loans to be discharged in bankruptcy and removing federal guarantees — give lenders an incentive to tell students “Hey, what you’re studying is unlikely to pay back what you’re borrowing.” When you remove these kinds of pricing signals, you get market failures like the above.

Bill November 5, 2011 at 9:36 am

TallDave, You throw out the baby with the bathwater with that proposal.

However, you could shift the incentives to the educational institution to be truthful in disclosing job opportunities, job hires from their programs, etc. by forcing the educational institution to disclose accurately this information and letting students sue if they do not.

Currently there are lawsuits against some law schools for misrepresenting job results and opportunities.

Of course, if schools say nothing, they don’t misrepresent. So, a better approach is up front disclosure to students before they take the loan of graduation rates, job placement, job opportunities, etc. Since student loans are not dischargeable in bankruptcy, that may be a word to the wise.

TallDave November 5, 2011 at 9:58 am

That would be a little better, but again you’re misaligning incentives. The school does not want to discourage students. A lender with its money on the line would.

You can’t have it both ways. Much like the health insurance cost insulation problem, if you destroy the incentives for rational cost-benefit behavior you’re going to get behavior that isn’t cost-benefit rational.

Gwyan November 5, 2011 at 12:09 pm

TallDave, the other problem here is that relying on past performance brings the country to a technological halt. Private industry wouldn’t fund a degree in genomics in 1990 because there is no track record for the field. Then ten years later all genome research will have moved to Europe and Asia because there is no skilled labor here.
My personal example is even stronger. I started an MFA in 1995 in Interactive Sculpture. You know, wacky installations with lights and machines that respond to viewers, ethereal computer voices coming from abstract paper mache forms. Sounds just as useless as puppetry, right? No private source would fund it based on future prospects. So I finish the degree in 1997, and start looking for a job. What are my skills? Strong competency in design software (think Adobe stuff), can program microcontrollers, can locate, hack and combine various bits of computer software and hardware to do things they were never meant to do. Where do I end up? As one of the early professors teaching Web Design and Web Programming. It was a field that hadn’t existed a few years before.
If you depend on private funders who look to the past, you will end up with a awful lot of steam engineers, and no petrochemical engineers. And, to be honest, in the current world, if you depend on private funders who look to the future, they won’t invest in *any* future American STEM, they will just fund Chinese and Indian STEM instead. The whole point of innovation is that it is new. And predicting which industries will be booming in 20 years is tough. This country has a good track record with venture capital and startups, but you are not going to get VCs interviewing every undergraduate. We need a public system and it needs to be looser in its standards than private companies with short term interests will allow.

ricketson November 5, 2011 at 1:33 pm

response no Gwyan:

In 1990, there was no such thing as a degree in Genomics. In fact, I doubt that there is such a thing today. The degrees are called “biology” and “molecular biology”. Those degree programs have track records regarding the employment of their graduates. It is understood by everyone that a “biology” degree includes the study of cutting edge biology… at least at good schools, so there is no need to worry about what to call these cutting-edge studies (i.e. they are just science).

We only establish the specialist programs (such as “genomics”) once that field has generated substantial buzz, and the job market would consider it as “biology, but better”.

Gwyan November 5, 2011 at 2:00 pm

Of course, if you just go by the general focus on biology, you still get no private investment, because data show (http://www.payscale.com/best-colleges/degrees.asp) that Biology majors earn less than Literature or Philosophy majors.

Bill November 5, 2011 at 2:02 pm

TallDave,

I do not understand your response.

The only misalignment of incentives I see is that a school does not disclose prospects, misrepresents graduation rates or does not disclose the same. I’m the one who said this was a misaligned incentive, not you or your comment.

As to the lender “on the line”, you would ultimately have the government step in here too, as it either is a lender or a guarantor of a lender. Now, if you are saying the government should be neither, then I say you are throwing the baby out with the bathwater, along with students who would otherwise earn a better income but cannot because their parents are not wealthy enough to loan them the money for college or guarantee it.

I am for meritocracy, not education funded by aristocratic parents of the leisure class.

If you are going to say the government should not lend or guarantee student loans, with students taking on non-dischargeable debt, then you should say so.

TallDave November 5, 2011 at 4:14 pm

Bill: The schools’ incentive is to get as much money and student interest in going there as possible. You’re asking them to act against their interest by telling students “Hey, this cool-sounding degree you’re borrowing gigantic sums for may actually be a horribly costly mistake that you’ll be paying for until you’re 50.” If you get the gov’t out of the equation, or at least make their role less central, the market will function.

Gwyan: Biology isn’t that great as a 4-year degree but can lay the foundation for a more lucrative grad degree (and notice molecular bio is quite a bit higher). Your personal story is interesting, but it really sounds like your arts education wasn’t as relevant as an ability to code you gained for peripheral or unrelated reasons. The guy with the puppetry degree isn’t going to found a robotics company unless he has some STEM to go with it.

Bill November 5, 2011 at 4:27 pm

TallDave, I have never claimed that any college will not try to get every nickel out of you, but so what. You are right that I am saying that TV commercials, brochures, etc. from colleges that brag about the success of their colleges, graduation rates and placement rates have to be accurate and should be disclosed. And you are right, I am acting them to operate against their interest. So what. I mean, its better than having Alex tell them what fields to go. If you believe in well informed consumer choice, you shouldn’t be opposed to that.

TallDave November 5, 2011 at 4:57 pm

Bill: Again, I don’t think your disclosure plan will hurt, but I also don’t think it will help nearly as much as allowing markets to function.

We don’t need bureaucrats to tell us what a degree is worth, we need a competitive marketplace in which lenders vie with one another to best measure the value of a given degree.

It makes much more sense from an incentives standpoint to make the lenders responsible for their loans. You would see a pretty rapid educational realignment around value that would probably be great for society. In fact, I’m hard-pressed to think of anything that would do more to reverse TGS.

Bill November 5, 2011 at 6:24 pm

TallDave,

I don’t think the markets will function if you use a private banking model as opposed to a non-dischargeable loan or guarantee model.

1. Banks, believe it or not, are risk averse, and rather than do a labor study, will ask for a guarantee from the student’s parent. That’s fine for the middle class (maybe), but for even middle and certainly lower classes, the parents will not be able to offer the guarantee. Most probably the effect of denial will be earlier though: parents who know they will not be able to offer a bank guarantee will not encourage their children to pursue college prep classes in high school.

I am for meritocracy. Not dependent on my parents or your parents wealth. The way you can think about this if you want to be selfish is that the guarantee obligation has been taken off your shoulder as a parent and shared with others. God, I may even be guaranteeing your kids loan.

2. This is not speculation, but history, as to what happened earlier when banks demanded guarantees from parents. Go look at what happened before student loans and see how college was financed, and that is why student loan programs developed over time.

3. No modern state that we compete with needlessly impedes educational attainment or conditions it on parents wealth. In fact, many states subsidize, not with loans, but with free education. And, if you want to take an historical perspective, you can find that the US did go down that path too: GI Bill, National Defense Student Loans (by the way, how do you like the government deciding that they will loan money for languages under NDSL but not some other things–do you like government picking and choosing???).

TallDave November 5, 2011 at 6:53 pm

1. Lenders will be fine with making reasonable education loans. They may balk at $50K/year for Gender Studies, but that’s kind of the point. And there are ways to encourage educational lending which don’t eliminate their risk and incentives. If you want a meritocracy, you need to reduce the punishments for success and the subsidization of failure.

2. The current alternative has made college even less affordable.

3. And their workers are already less productive than ours. Our competitive advantage will become even larger as U.S. education is steered toward value by markets while theirs is not.

It’s funny, virtually everyone accepts markets work better for setting prices in nearly every other context, but somehow education is supposed to be immune to the laws of economics.

Bill November 5, 2011 at 7:22 pm

TallDave,

1. Regarding the student applying for a gender studies loan, let me quote an authority you cannot disagree with, yourself, in a post which follows this one: “Non-dischargeability deters borrowers, not lenders.” She, in your own words, will be deterred if she has the information about her career choice. If she choose poorly, she pays.

2. Regarding markets, you are confusing markets for allocating bank loans and markets for allocating the most talented students to educational institutions. Banks will take care of themselves, but that’s not the point. What we want–and we all benefit from this–is having the most intelligent and most productive and most hard working students getting into college, IRRESPECTIVE of their parents ability to pay or guarantee their student loan payments. I submit that if qualified students have to rely on parental guarantees in leiu of governmental guarantees students will not be allocated to college based on their intelligence, ability, skill etc, but on the basis of their parents assets and willingness to cosign.

TW November 5, 2011 at 7:48 pm

ricketson, in 1989, when I entered a high-prestige STEM university, I was assured that a bachelor’s degree in a pure science such as biology (as opposed to an engineering discipline) was all but economically useless in and of itself, and that’s its entire purpose in the world was to be part of the crap shoot of getting into a PhD program. That is, by getting a degree in biology, you were gambling the cost of your undergrad tuition on your being part of the subset who were admitted to graduate school, and being part of the further subset who both graduated with a PhD and got one of the few professional positions available for biology PhDs.

I find it fascinating the beliefs outsiders have about the various STEM fields and their economic realities. They often do not square at all to what people within those fields believe, and tell one another. As to who is right, I cannot say, but I doubt it is the outsiders with no direct experience of the labor market in question who have the advantage.

TallDave November 5, 2011 at 10:32 pm

1. Yes, but you forget I also said lenders are normally the ones who make the lending decisions. Again, borrowers (esp. very young ones) have lots of stupid ideas for other people’s money but normally have a lot more trouble getting access to it because those people are afraid of losing it.

2. The most productive and hardworking students are an excellent bet for lenders. Lenders will want to make money on those people. Also, such students will tend to be recruited by colleges, whose real stock-in-trade is exclusivity.

These are not the credit markets of 1965. Yes, a co-signer is generally welcome in most debt situations as it decreases the lender’s risk, no that isn’t going to close off the lending market to anyone who doesn’t have rich parents.

Bill November 5, 2011 at 10:40 pm

TallDave, Some points are being repeated here, so anyone other than yourself can look above, but I do not think that banks are any better judges of future academic performance than admission directors. Knowing who is a prospective good risk for a car loan is not the same as knowing who will do well in school.

Besides, the average loan officer barely went to school and was probably an econ major who didn’t understand that was a low paying profession with a bachelors degree. And, if you get a Ph.D, all you can do is lick the boots of the Fed to get a desk job or write blogs.

TallDave November 5, 2011 at 10:55 pm

Shrug. People have transcripts, don’t they? Isn’t a little bizarre to give someone hundreds of thousands of dollars of your money to spend on education, without first looking at their transcripts? At any rate colleges themselves help perform that function with the admissions process.

Lenders will figure out how to make money by evaluating risk better. That’s what capitalism is.

At any rate, as others have pointed out loans aren’t even all that necessary. If you’re willing to work hard you can pay your way through a decent school. I finished a bachelors’s and a master’s with no debt.

Bill November 6, 2011 at 9:09 am

TallDave,

I finished a bachelors degree, and a law degree with no debt too while working through college for an econ professor doing research, programming and statistics.

That probably dates both of us, as in those days college was cheaper, and if you went to a good state college, much cheaper.

But, that’s not today.

TallDave November 6, 2011 at 10:22 am

I finished mine about ten years ago. Also, you seem to be forgetting that the over-availability of such loans is a large part what’s driving those prices higher. Reduce the subsidy and prices fall.

ricketson November 7, 2011 at 2:52 am

Gwyan: the only prediction I made was that a newfangled specialty within biology might have some premium. It turns out that molecular biology and biotechnology have higher starting salaries. I do not see how this thread of the conversation (“wouldn’t fund a degree in genomics in 1990 because there is no track record for the field. “) had anything to do with the humanities (the bulk of which got lower wages than biology, BTW).

Anyway, I don’t trust those statistics. They don’t even say when the data was collected. And their implied survey method (which they don’t really describe) is well known to be immensely biased.

TW: I don’t know why you jumped to conclusions about where I’m getting my information. I don’t even know how this comment made you think that I thought that studying biology was the path to riches. However, I do have much direct experience with the biology job market, and I’ve seen plenty of people make a decent living following this path. Aside from that, job prospects with a biology degree probably changed a lot between 1990 and 2000 (when a lot of schools started to think it was worthwhile to establish bioengineering programs), and job prospects probably differ a lot between different schools.

Furthermore, if you are at a STEM university, then biology will be the least lucrative choice (relative to Engineering and the other sciences)

Josh S November 7, 2011 at 6:49 pm

Government subsidies are the bathwater. A college loan is a capital investment, and if politicians are the only people willing to loan someone money for a certain degree, you can be pretty sure it’s a bad investment.

JonF November 5, 2011 at 11:49 am

In other words, let’s have bankers police students instead of the government. Thouhh I fail to see anything freedom-enhancing about that. It’s just putting the means of social control in different hands– Big Banking rather than Big Government.

ricketson November 5, 2011 at 1:34 pm

The point is that we know what the bankers are after — money. The government could be after anything, so as a matter of course we tie its hands.

TallDave November 5, 2011 at 4:24 pm

The government doesn’t function well as an investor (I don’t think I need to cite examples on that one). If you have the government act as an investor, you will tend to get investments that don’t really make sense but benefit certain special interests. And that’s where education is today.

Joe November 7, 2011 at 7:31 pm

I think you are confusing freedom wih free rides. Not one and the same.

NAME REDACTED November 7, 2011 at 3:56 am

+1

MD November 5, 2011 at 9:42 am

Do you really think that, without the relevant incentives, actors in the market alone would be willing to allocate $35,000 (?) in scarce capital for an individual to study puppetry? It’s an absurdity that can only exist because it’s rigged to be so. Your overall point that information is not perfect and that lenders/borrowers make errors is absolutely correct. But do recognize there’s a distortion here!

Bill November 5, 2011 at 9:49 am

MD, The student who took out a loan for puppetry training did not have that loan forced on him, nor was it a grant to him. He made a market decision that, with the non-dischargeable loan, he would acquire a skill set that would make him more employable.

People make bad decisions all the time. Making a loan available to him, for him to decide, does not change that, and so long as the loan is non-dischargeable, the market corrects. The only other way would be for some bureaucrat to allocate grants to the professions Tyler believes are “the fields of greatest economic potential.”

TallDave November 5, 2011 at 10:03 am

Yes, people make bad decisions, but normally teenagers aren’t given hundreds of thousands of dollars to make bad decisions with.

Again, if any other industry was doing this there would be talk of jail time.

ram November 5, 2011 at 11:03 am

I am not worthy enough to comment at this site, but I’d like to say that this comments section is one of the great free educational resources.
I loved the angle from which Bill approached Alex’s post but am ultimately most convinced by TallDave’s points. It has been a nice lesson for me.

JonF November 5, 2011 at 11:51 am

Teenagers maybe not. But would-be entrepreneurs make bad decisions with 100K or more in loans all the time– and unlike students they do not have those loans hung around their neck like a ead-weghted albatross for a lifetime.

Foo Fighter November 5, 2011 at 12:11 pm

Jail time?

Sincerely curious to understand what you mean. Why do people often feel like you can be jailed for making bad decisions? It’s the same phenomenon that occurs when OWS people demand to send bankers to jail. It just doesn’t compute.

Anyway, re points above, putting decisions in the hands of bankers instead of government isn’t always a good thing or a bad thing. There is definitely an oversupply of useless degrees (thanks gov’t), but can’t anyone else see a situation similar to the housing bubble?

e.g. Every private actor thinks that a degree in Futurology is a good investment, bolstered by gov’t claims that, indeed, futurology is very important if we ever want the future to come. Then, after millions of people who are useless in futurology graduate with a futurology degree, we find that the future will come regardless of futurologists, and millions of futurologists find their degrees underwater…

TallDave November 5, 2011 at 4:22 pm

FF: The colleges aren’t making bad decisions themselves, they’re encouraging kids to make bad decisions for which those kids will spend decades paying, but which benefit the colleges. It’s sort of crazy that states make charging $20 in interest on a paycheck loan illegal while simultaneously helping kids rack up $100K in student debt for a degree that may not be worth a tenth of that. It’s the sort of practice that in other industries draws the eye of a DA.

MD November 5, 2011 at 11:21 am

You’re looking at it from the wrong side–though my previous point clearly highlights the lender’s incentive here. Of course he can make the foolish decision *to seek out* a huge loan to finance his puppetry (maybe I can request a loan to invest in my potential as a professional thumbwrestler), but why on earth would a financial institution *grant* the loan in the absence of the current programs giving them the incentive to do so? Or in the absence of the credit being artificially poured into the market like confetti, as opposed to coming out of actual savings, which would actually require shepherding? Anyway, the waters are too muddied to draw the conclusion that this is an example of all actors involved following purely “market” signals.

Newman November 5, 2011 at 6:35 pm

“The student who took out a loan for puppetry training did not have that loan forced on him, nor was it a grant to him”

No, but the loan made with impunity by the lending institution because they are going to get their money regardless of how ill advised the educational pursuit may be. Somewhere someone has to be be forced to evaluate the viability of the loan. As long as we are relying on the government to play that role we will see massive market distortions born of political influence not free markets.

ladderff November 5, 2011 at 1:01 pm

Crush the market, blame the market, crush a different market. This is your answer for everything, Bill, and it always comes with a side of disdain for us freedom-minded simpletons. You’re right that Alex, Bryan, and anyone else who isn’t shilling for the state full time aren’t likely to argue massive market failure in a market as heavily subsidized and regulated as education. Because that would be stupid.

Bill November 5, 2011 at 1:55 pm

I am not blaming the market. Tyler is. He is saying that the market is not sending the signals that he sees. I am saying if STEM is hard, there is less STEM, and therefore there should be higher wages. How can Tyler’s market perfectionism come to a bad result. (I pointed out how it could.)

I also believe that prior endowments, or lack thereof, such as what your parents earn, should not limit you in your aspirations–meaning specifically, you should have the opportunity to take out a loan for higher education without Tyler or someone else saying you did the wrong thing, so long as the loan is not dischargeable and so long as the sellers are forced to disclose job prospects.

That’s some blaming the market.

Sean W. Malone November 8, 2011 at 12:02 am

Bill, you seem to be missing the point that the reason the education “market” isn’t sending adequate signals via prices is because the government’s subsidy of student loans has completely distorted the market for higher education beyond all recognition.

As TallDave has said numerous times upthread, these subsidies provide perverse incentives for everyone involved.

1. Banks, who are subsidized and guaranteed against any risk they might have on student loan financing, have the incentive to loan to as many people as they can as much as they can, because it’s a virtually guaranteed pay-back mostly at the tax-payers’ expense, regardless of the ultimate success of the student being funded.
2. Colleges, knowing that banks have a heavily subsidized and virtually guaranteed source of financing funds through the subsidies, have every incentive to jack up tuition prices and to offer any and every random course imaginable in order to attract students and keep them there for at least 4-6 years for an undergraduate program. The school, thanks to the subsidies, will definitely get paid… And…
3. Thanks to the fact that the banks no longer care what kind of students they’re funding, and students have no real incentive to care about repaying the loan – at least not for years and years down the road – and because colleges are trying to get as many warm bodies as possible, students also have significantly reduced incentives to pick a major based on real market signals.

So, I mean… The market isn’t “working”, because the market is distorted, and the source of those distortions should just be obvious, shouldn’t it?

It’s no surprise based on the system as it is that the market is signaling a lot of the wrong things. There’s no connection between the supply & demand of labor and access to loans for college, and there really should be. Likewise, there’s no reason to believe that only people with rich parents would be able to get loans in a more free market arrangement.

First, because overall prices come down dramatically without the subsidy, thus making the loans smaller to any single individual. And secondly, because what the banks would want to care about at the end of the day is getting their loans repaid, and the way that happens is not by only loaning to people with rich parents, but loaning to anyone who is a likely good investment (i.e. high performing students, accepted into good schools, who have chosen majors with high earning potentials).

Like anything else, the market for investments in student loans would ebb and flow with the supply of money vs. demand for loans, in relation to the potential returns generated by the job market. Fewer loans would be given out at times like we have now, but that’d be a good thing, since we have so many “educated” people unemployed already that need to clear the labor market.

Mark_H November 5, 2011 at 1:22 pm

Here’s the argument, as I see it:
Education is subsidized because it carries positive externalities.
The positive externalities associated with some majors (STEMs) are greater than those with other majors (arts, psychology, etc.).
The less useful majors are subsidized at the same rate as the more useful majors.
Therefore: there are inefficiently too many arts & psych majors compared to STEM majors, as a result of bad incentives put into place by whoever is doing the subsidizing, whether it’s private scholarship providers or subsidies from the government. Whether or not you agree with this argument, the claim is that it’s a failure of incentives, not a failure of the market.

Rahul November 5, 2011 at 1:50 pm

That’s the most succinct description of the underlying issues. Nice!

ricketson November 5, 2011 at 1:50 pm

Mark_H, I think that argument fails on many levels.

Even if we assume that subsidies are driven by interest in positive externalities, that does not mean that subsidies should be directed towards STEM. In fact, I think it suggests the opposite, since STEM majors find it much easier to profit from their degrees (i.e. they seem to internalize the benefits of STEM education). The arts are the place where subsidies are needed to provide incentives, and they are also where we should expect positive externalities; the arts create intangible benefits such as a shared culture, which almost by definition influence the entire society. I think it is much easier for a person working in a STEM field to do work that benefits a very narrow portion of the population.

Aside from that, psych can be a very practical degree. Pyschology training can be applied to all types of well paid fields (industrial psych, marketing). Most noticeable, psych therapists make a good living. Furthermore, assuming that therapists are effective, they provide immense positive externalities (such as helping an addict stay sober or preventing an paranoid person from committing murder).

Finally, I think that externalities are only part of the motivation for education subsidies. Concerns with social mobility are also key, as is the potential that a lack of access to capital would cause a young person to fail to make a high-return investment. It’s on these points that our current system of subsidies are failing.

James C November 5, 2011 at 2:09 pm

wouldnt those seeking to be therapists get medical degrees and become psychiatrists?

TW November 5, 2011 at 7:26 pm

No, they wouldn’t. The path to being a psychiatrist does not lead through the training of becoming a psychotherapist. For someone who has gone through the professional training to become a psychotherapist, going back to school to become a psychiatrist would pretty much entail going back to square one. It’s a complete change of field. Psychiatrists, being medical doctors, typically take pre-med or bio undergrad degrees, not psych. Psych majors don’t have the prerequisites for med school.

Also, speaking as a psychotherapist, I have absolutely no desire to become a psychiatrist. They are well compensated, but I became a psychotherapist to do psychotherapy, and while psychiatrists are trained to do that as well, they can’t generally afford to with their student loans, so wind up chained to the pill pushing oar: http://www.nytimes.com/2011/03/06/health/policy/06doctors.html?pagewanted=all

Frank November 5, 2011 at 3:26 pm

The argument of positive externalities is getting pretty stale. Nowadays, the arts and humanities, and at least sociology among the social sciences, are certifiably producing negative externalities. These activities should be taxed, not subsidized!

Newman November 5, 2011 at 6:44 pm

“In fact, I think it suggests the opposite, since STEM majors find it much easier to profit from their degrees”

Then how do you account for the explosion of liberal arts majors relative to STEM majors?

TW November 5, 2011 at 7:31 pm

For more than 20 years at least, students entering college have been being told that it’s more important to have a degree, any degree, than to have a specific degree. That may now be false, but I think for most of the 1990s, it was true: you could get a nice white-collar entry level job and work up into middle management with a degree in absolutely anything. Then, if you wanted to progress further, you got an MBA.

And if people are being told that it doesn’t matter what their degree is in, they will of course get the least demanding degree possible. That is why there has been such an explosion in liberal arts majors.

TW November 5, 2011 at 7:20 pm

Most noticeable, psych therapists make a good living.

No, we don’t.

I’ve been keeping out of discussion here because, perhaps uniquely, I have professional backgrounds and academic study in both STEM (undergraduate) and psychology (graduate), and, man, there’s been a lot of nonsense posted here lately.

Psych is one of those fields where vast numbers of people start and a very, very few make it into the field and succeed financially. The attrition is appalling, and some of it is the direct result of some mind-boggling government distortion of the market about which outsiders don’t know. The combination of de facto government control of payment rates for psychotherapists plus the requirements of licensure regulations in my state result in a situation in which if you wish to become a psychotherapist, you’d better be prepared to live on minimum wage for a couple of years or more. The pragmatics of the situation are that some unknown but apparently large percentage of people who graduate with a psych degree leave the field because they can’t afford to service their grad school debt working in the field. Most of my colleagues making it through either have a spouse to support them through this stage of their career, or have a part-time better-paying job in another field, or are independently wealthy.

(I? I worked my way through grad school as a computer programmer, paying cash as I went. I have no debt, and i have savings to tide me through until I can make better money.)

Count me among those who feel it’s almost criminal that professional-preparation educational institutions are not required to publish their graduation, placement, and licensure attainment rates. The consumer should be informed what they’re buying before they put their money — or the bank’s money — down.

endorendil November 6, 2011 at 1:56 am

The point is that the education market serves many irrational customers – people that spend huge amounts of money and time on things they want to do. With irrational actors, the market does not work well in economic terms. It isn’t market failure per se, it is just how markets work in reality: since we’re not very good at determining what is economica

What is q

endorendil November 6, 2011 at 1:03 am

ugh. accidental posting …
As I was saying, we’re not good at determining what is economically best for us, and we don’t actually take the most important decisions based on economic reasons, markets can’t yield economically optimal solutions.

This is a reason to regulate available products and to actively push people to make more sensible solutions. This is unfortunately pretty invasive.

PrometheeFeu November 8, 2011 at 4:08 pm

I don’t know stats on the topic, but in my personal college experience, everyone I spent time with had a pretty good idea of the worth of their major on the job market. The general agreement was that outside of a few specialized fields, your major was unlikely to be of much help.

Jody November 5, 2011 at 8:36 am

Bill – Market Failure != imperfections in outcomes. (or you’re really arguing against the strong EMH without realizing it rather than markets).

In this case, Joe’s getting a very strong signal from the market that he made a bad choice, so the market’s working properly. The only possibility (in this story) of the critical mechanisms for a functioning market is if Joe is successful in using the political process to circumvent the signal that going back to school for a degree in puppetry is a bad idea.

Bill November 5, 2011 at 9:22 am

Jody,

Market failure arises from poor information markets. Tyler is arguing that “American students are not studying the fields with the greatest economic potential.” If it is evident to Tyler, it should be evident to students, their teachers, and their future employers. Future employers would have every incentive to correct for this market information failure by subsidizing current students to harvest them later.

If someone is getting a signal from the market that they made a bad choice, then it contradicts Tyler’s statement that this is the field with the greatest economic potential.

Finally, as I pointed out later (see below) the cross elasticity of supply of would be engineers for puppetry professions is non-existent. Its more likely we had an MFA student or student librarian learn puppetry which they could then use in future library programs.

TallDave November 5, 2011 at 9:32 am

“The market” didn’t loan him $35,000, the government did.

Bill November 5, 2011 at 9:38 am

And, Joe is going to have to pay back his loan as student loans are not dischargeable in bankruptcy.

TallDave November 5, 2011 at 10:00 am

Yet another American screwed by the government on behalf of the education sector.

Bill November 5, 2011 at 2:04 pm

TallDave, He made his choice and he screwed himself. The government didn’t screw him.

D November 5, 2011 at 3:27 pm

I think TallDave’s original point is that if loan WERE dischargeable and not guaranteed, then it may never have been made and the puppeteer would have looked for a plan B.

Bill November 5, 2011 at 3:53 pm

D, Then if that is what TallDave said, that is really stupid, because non-dischargeability deters, not encourages, poor decisions.

TallDave November 5, 2011 at 4:33 pm

Non-dischargeability deters borrowers, not lenders, and lenders are generally the ones making the decisions, not borrowers. People have lots of terrible, terrible ideas for gigantic loans, but they generally go unfunded because other people don’t want to lose their money.

A non-guaranteed private lender would have laughed at his puppetry degree and told him to get into petrochemical engineering.

Bill November 5, 2011 at 8:01 pm

TallDave, I am happy to report that we can agree with your statement that “Non-dischargeability deters borrowers, not lenders,”.

Jan November 5, 2011 at 10:31 am

They never said whether it was a government or private loan. It’s important to note that there are plenty of private loans made to students. Law students, those with some of the highest debt upon graduation, get most of their loans from the private sector. The government won’t give them enough money to cover their tuition. Many of those graduates are unemployed or making $45,000 doing crap work. Is the market correcting?

TallDave November 5, 2011 at 11:02 am

The gov’t has decreed that private education loans generally aren’t dischargeable in bankruptcy either. The market is doing exactly what you would expect the market to do when there is no risk of default.

And a law degree at least has a fair chance of paying for itself.

Bill November 5, 2011 at 6:56 pm

TallDave, If you think there is no risk of default in giving a loan to a law student, I have some students who would like to take out a loan from you. It will be private.

TallDave November 5, 2011 at 10:35 pm

I hope you read your students’ papers more carefully than that, Bill. I wrote there is “no risk of default” for nondischargeable debt. I wrote a law degree has a “fair chance of paying for itself.”

Bill November 6, 2011 at 9:12 am

TallDave, If you have to write with such qualifiers in the hope that the reader will not spot the weasel words that let you get out of your statement later, you have what it takes to be a lawyer.

TallDave November 6, 2011 at 10:18 am

Bill, if you interpret “private education loans generally aren’t dischargeable in bankruptcy” to mean “law students will never default on any personal loan” then law is probably not the field for you.

David Littleboy November 5, 2011 at 8:38 am

It’s worse (or better) than you think.
“Joe had thought that hard work and education would bring, if not class mobility, at least a measure of security…”
I’d guess that Joe thought that he’d get a job as a drama teacher at a posher school. That’s nowhere near as dumb as The Nation is making him out to be. But if The Nation is dead wrong on Joe’s dumbness (and I think it is: my violinist MFA student friends knew that they’d probably become teachers), then perhaps the article’s point isn’t as dumb as it sounds. An MFA in some corner of theater arts at a respectable school ought to at least prepare one for a carreer in education. That there’s no there to go to really is sad.

Alpha November 5, 2011 at 8:41 am

The problem is that puppeteers think they should be able to live like STEM graduates. The data say differently. It’s not HARD to be educated on the distribution of value by degree:
http://www.payscale.com/best-colleges/degrees.asp

Unfortunately, people do need to understand what a distribution is to make solid data driven decisions.

CBBB November 5, 2011 at 10:44 am

This guy is living like a STEM graduate. Underemployment, very low job prospects, low pay, sounds exactly like the life of a STEM graduate to me.

TallDave November 5, 2011 at 11:10 am

I don’t know where you get this strange idea STEM graduates are struggling. The recent STEM graduate we hired said virtually all of her STEM classmates have jobs. It’s the nonSTEMs who are struggling to find work.

CBBB November 5, 2011 at 11:20 am

The idea is what I see from myself and many of my former classmates. There’s some exceptions and like I say Engineering has prospects but the other fields – science and math, no way not much different then the employment prospects of an MFA in Puppetry.

TallDave November 5, 2011 at 11:22 am

That makes sense. The applied-science STEMs certainly seem to be doing better.

CBBB November 5, 2011 at 11:24 am

So they should get rid of the STEM acronym and just say Engineering because that’s the ONLY one of those courses that has any prospects what-so-ever.

JonF November 5, 2011 at 11:54 am

Yep, there’s a reason a ot of science and math grads ended up in either IT or finance (I’ve done both). Everytime I hear the refrain “We do have enough math and science grads” I have to grit my teeth.

TallDave November 5, 2011 at 11:20 am

This is the most recent analysis that popped up in Google:

http://www.cpst.org/STEM/STEM7_Report.pdf

Interestingly, they were apparently very wrong about petroleum engineering jobs, they forcast zero growth but from what I understand that one has taken off like a rocket.

DonH November 6, 2011 at 2:24 pm

Speaking as an old(er) engineer, the market for petroleum engineers has always been incredibly volatile, much like the price of petroleum itself. When crude is high, petro engineers make big bucks. When it crashes, they get laid off. It’s one of the few fields I know of where the expected value of the degree can be expected to change drastically in less time than it takes to obtain the degree.

TallDave November 5, 2011 at 11:37 am

Something a little more current:

STEM Jobs Outlook Strong, but Collaboration Needed to Fill Jobs
They’ve got plenty of jobs in science, technology, engineering, and math—STEM—ready to fill. Unfortunately, the supply of STEM workers isn’t meeting businesses’ needs. The gap is baffling. A U.S. Department of Commerce report shows that in the past decade STEM jobs grew at three times the rate of non-STEM jobs, and that STEM workers have greater job stability. The rest of this decade promises to be a bull market for STEM job seekers. Occupations in these fields are expected to grow by 17 percent by 2018, nearly double the rate of growth in non-STEM occupations.

And with that, I should really get back to my own STEM work before someone steals one of my three STEM consulting jobs, thereby forcing me to work less than 60 hours a week (quelle horreur!).

CBBB November 5, 2011 at 11:46 am

Sure sure, I’m certain all that growth is in Engineering – NOT Science or Math. Telling people Science and Math have great career prospects ends up destroying lives – like mine.

ricketson November 5, 2011 at 2:01 pm

Science and Math majors were doing quite well when I graduated from college in the late 1990s. Maybe that was a special time… but math majors were being sucked into all types of high-paying jobs. Science majors typically got decent engineering-type jobs (if they didn’t end up in med-school or grad-school).

CBBB November 5, 2011 at 2:04 pm

Well that was the late 1990s – a VERY different era then the current one

TallDave November 5, 2011 at 4:42 pm

If only we’d had market forces teliing you an engineering degree was a better bet via the interest rate spread.

Newman November 5, 2011 at 6:52 pm

“Telling people Science and Math have great career prospects ends up destroying lives – like mine”

How how has it destroyed your life? Even if you can’t find a job in your chosen field, wouldn’t your educational credentials be more portable when adapting to a different profession than a liberal arts major?

Danny November 5, 2011 at 8:49 am

Do whatever will make you the happiest in life…then complain about how much money people make in fields that you would never want to be a part of.

Bill November 5, 2011 at 9:02 am

A Word In the Defense of the Helpless Puppets From Those Meanies in the Audience

Ahem.

First a disclosure of interest: my wife, a librarian, was a supervisor of childrens library in a good size library, and her husband, me, sometimes helped her with puppet shows. I doubt that the ARRA benefited her (or me indirectly) but in the interest of full disclosure of financial interest, which is sometimes lacking in this site, I wish to disclose my interest.

Second, that being said, I stand in the defense of poor helpless puppets and offer evidence that support of puppetry (other than economic puppets supported by Koch Foundations) is in the public interest.

I quote from a study on the education effects of puppetry on pre-school and school children, including relevant correlation coefficients for those economists in the audience:

“We conducted this study to measure the relations between the use of puppetry in
the classroom, and student attention and student involvement. The first hypothesis we
developed was as follows: The use of puppets as a teaching tool in the classroom directly
influences student attention. As mentioned above, through our data analysis, we have
proved this statement to be true with correlations of .63 and .53 respectively for teacher
puppeteers and student puppeteers. Our second hypothesis was the following: The use
of puppets as a teaching tool in the classroom directly influences student involvement.
As discussed above, this data analysis proved that this statement was incorrect. We
discovered that the use of puppets in the classroom indirectly influences student
involvement through student attention. The third hypothesis addressed by this study was:
The use of puppets as a teaching tool in the classroom indirectly influences student
involvement through attentiveness. As discussed in the findings of this study, this
hypothesis was shown to be correct, with correlations of.82 and .75 respectively for
teacher puppeteers and student puppeteers.”

The link is here: http://www.puppetools.com/amys_thesis.pdf

The paper is entitled: RELATIONS BETWEEN THE USE OF PUPPETRY IN THE CLASSROOM,
STUDENT ATTENTION AND STUDENT INVOLVEMENT

Third, as an antitrust lawyer, I often have to estimate the cross elasticity of supply or demand for various products. Without having conducted any empirical research and relying on my many years of experience, it is my opinion that no potential engineer abandoned his/her aspirations to pursue a career in puppetry as a result of the ARRA subsidy.

But, that’s just my opinion.

Bill November 5, 2011 at 9:07 am

…no potential engineer abandoned his/her aspirations [to be an engineer] to pursue a career in puppetry as a result of the ARRA subsidy.” in case it is not clear

Rahul November 5, 2011 at 9:09 am

Puppets get attention from students. Sure. So do goldfish, clowns, balloons and chocolates.

PS. I’d also add that the sample size was 32. The method to rate involvement and attentiveness was asking the teachers. I sense a strong potential for a bias.

Bill November 5, 2011 at 9:28 am

Rahul, I agree with you about the small sample size, which was mentioned in the paper, and suggest that we could go to the Koch Foundation to get grant for you to conduct further research with a larger sample.

As for the other items you mention for holding and keeping attention of school children in the development of a story and imagination, including chocolate, I suspect we could go to the Mars Foundation for some research support, but until you offer evidence, including correlations, I will remain unconvinced that chocolate increases student attentiveness.

You have chocolate on your hands if you say otherwise.

Bill November 5, 2011 at 9:44 am

Rahul,

The other part of the puppetry programs, that the educational paper doesn’t cover, is that puppetry is used by public libraries to draw parents of preschool children to the libraries, and then to have the parents begin either reading in the library after the show or withdrawing books to read with the child after the program.

I suppose they COULD have a chocolate program to draw preschool kids and their parents to the library, but that would conflict with Michelle Obama’s childhood obesity program.

Rahul November 5, 2011 at 10:08 am

Of all the ways to attract adults to a library is puppetry the best gimmick?

Bill November 5, 2011 at 2:06 pm

Storeytime with puppets is the best way to attact early learners. Ask any childrens librarian.

D November 5, 2011 at 3:30 pm

Is it even better if the puppeteer has a master’s degree?

Bill November 5, 2011 at 3:55 pm

Well, there are many famous puppeteers who have risen to positions of great authority.

Dick Cheney, for one.

Bill November 5, 2011 at 9:02 pm

D, See the link about the UConn program below at the end of the post and decide for yourself.

Rahul November 5, 2011 at 9:02 am

I wonder if poor Joe would be willing to learn some geographical mobility in order to get the class mobility he covets? It’s not very practical to leave a job and then return after three years expecting the job to be waiting there for you. Especially when you contrast that with, say, boatloads of Chinese graduates who are competing, and relocating thousands of miles with virtually zero geographic preference.

The sense of privilege and entitlement is mind boggling.

iamreddave November 5, 2011 at 9:03 am

You know Hansons posts on how people indoctrinated by teachers are likely to be more pro teacher? http://www.overcomingbias.com/2011/09/counter-indoctrination.html
Kids see the muppets well before they see teachers. Is elmo a pinko plot?

jpd November 5, 2011 at 9:17 am

yes he should have gotten an economics degree so he could start a blog complaing about puppets

K. November 5, 2011 at 9:19 am

The late Andy Rooney on jobs:
On looking for a job, he said: “We need people who can actually do things. We have too many bosses and too few workers. More college graduates ought to become plumbers or electricians, then go home at night and read Shakespeare.”

CBBB November 5, 2011 at 11:30 am

This from a guy who had a pretty nice career as a guy making cranky commentary on TV.

Itchy November 5, 2011 at 11:46 am

Yes, I wouldn’t even want Andy’s salary. If I could just get paid half of my engineer salary to bitch and complain about the stuff that annoys me, I would quit my job immediately.

CBBB November 5, 2011 at 11:57 am

Andy Rooney had many people’s dream job and wants everyone else to become plumbers.

msgkings November 7, 2011 at 12:44 pm

Andy Rooney no longer wants anything. RIP.

TallDave November 5, 2011 at 9:27 am

If anyone else was doing what the education sector is doing to these kids, they’d be facing jail time.

…Like a lot of the young protesters who have flocked to Occupy Wall Street, Joe had thought that hard work and education would bring, if not class mobility, at least a measure of security…

This is why I love the idea of allowing student loans to be discharged in bankruptcy and removing federal guarantees — give lenders an incentive to tell students “Hey, what you’re studying is unlikely to pay back what you’re borrowing.” When you remove these kinds of pricing signals, you get situations like the above.

This massive misallocation of resources has to be a huge drag on the economy.

Rahul November 5, 2011 at 9:35 am

What was the rationale behind not allowing student loans to be discharged via bankruptcy when the law granting that exception was passed? Just curious. Is this a longstanding American precedent?

zbicyclist November 5, 2011 at 9:54 am

If you graduate with $50,000 in student loans but no tangible assets, the rational thing would be to declare bankruptcy the next day. Governments are stupid, but not that stupid.

Rahul November 5, 2011 at 10:03 am

So the law protects selectively protects government assets? Other creditors (say, for car loans, house loans etc.) are exposed to the vagaries of consumer bankruptcy?

TallDave November 5, 2011 at 10:09 am

Not gov’t assets generally, just those backing education. You can discharge gov’t-backed housing debt, for instance.

This setup is a big reason why we have massive tuition inflation.

question the question November 5, 2011 at 12:22 pm

The non-dischargeable nature applies not only to government loans: private educational loans are also non-dischargeable.

See the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) from 2005.

Glen Raphael November 8, 2011 at 12:55 pm

if you default on something like a car loan, the bank can at least repossess the car and get some of their money back – you can’t keep the car through bankruptcy. Knowing this makes banks more likely to loan for consumer items than they would if they didn’t have that option.

But if you default on your education loans, the bank *can’t* take back your education – it’s something you always carry with you no matter what. This shifts a lot of power to the borrower. Changing the law to address that asymmetry makes banks more willing to lend, especially to people who would otherwise seem a poor credit risk.

The downside of changing it back would be that fewer poor people would be able to get or afford student loans.

Nate November 5, 2011 at 11:40 am

Simple,
after 2 years, 25% becomes dis-chargeable.
after 5 years. 50%…
you see where this is going

ricketson November 5, 2011 at 2:04 pm

…if you don’t care about getting any other loans in the near future.

Dan Weber November 5, 2011 at 5:21 pm

To pay off $50,000 in debt? I can definitely see that being worth waiting 7 years to buy a house.

Really, though, once educational debt became so easily dischargeable, loans would drop, and then college prices would drop.

bluto November 5, 2011 at 9:30 am

One of the skills that was very hard to find when we were looking for a children’s pastor was puppetry. Perhaps he should get a little seminary training and go where the market is, of course then he’d probably have to hang out with the wrong kind of white people more than say around Zuccotti Park.

JonF November 5, 2011 at 11:59 am

Maybe not: I suspect that Liturgical Puppetry is not a regular feature at the St Pius X Society, or the sort of Church where Republican voter guies are next to the Bibles in the pews.

bluto November 5, 2011 at 12:17 pm

Evangelical churches emphasize their children’s programs (generally with a separate service for them). Puppetry is a fairly nice addition to those services. However, they don’t pass out the voter guides until the kids are 18.

wolfgang November 5, 2011 at 9:36 am

After reading your blog post I wonder if the CIA is doing large scale experiments with LSD again…

Chip Hessenflow November 5, 2011 at 9:48 am

How many schools at the university and professors are surviving because student loans allow the odd ball departments to recruit students to odd ball degrees? Come learn this skill that has very little demand and may not have a future. Concerning the Masters Degree in any subject… Is it worthy of an advanced degree or is it a trade skill?

Bill November 5, 2011 at 9:50 am

More and better disclosure of job prospects, graduation rates, etc. by schools would solve this.

TallDave November 5, 2011 at 10:22 am

“Solve” is a little strong. Mandates rarely substitute well for markets.

I think if you remove the subsidy, education pricing will collapse even faster than housing did, solving the affordability problem.

Rick Perry asked the salient question: why can’t we educate students for $10K or less over four years?

It’s probably not a coincidence TGS started around the time we decided to massively increase education subsidies in the name of egalitarianism. It was a noble experiment, but it’s past time to recognize that it didn’t work very werl. Let the markets decide who’s a good risk for paying back really expensive education loans, and let everyone else get by on less expensive educational opportunities.

The Anti-Gnostic November 5, 2011 at 10:58 am

I think if you remove the subsidy, education pricing will collapse even faster than housing did, solving the affordability problem.

It absolutely will, and people like Cornel West, Ph.D., go back to daytime talk shows or cable access. Or shouting at people from under bridges.

That is the dread fear of the Left in all this: that their Marxist indoctrination camps a.k.a. colleges are all about to go up in smoke.

question the question November 5, 2011 at 12:26 pm

More histrionics and hyperbole, please.

ricketson November 5, 2011 at 2:07 pm

The economics of Princeton are very different from the economics of your typical school (both for the student and the university). West works at Princeton, and not much will change if the subsidies are removed.

TallDave November 5, 2011 at 7:07 pm

ricketson: Yes, someone made a great point about that awhile back — those institutions don’t sell education so much as they sell exclusivity.

Rahul November 5, 2011 at 10:05 am

You get to the crux of the problem. To save one professorial job let’s screw fifty students by exposing them to the option of majoring in a useless field. There’s way too many questionable programs and majors at publicly funded universities. And the faculties from these are over-represented in college councils and bodies.

Deaderjack November 6, 2011 at 5:04 pm

Chip,

I have been reading straight through these comments – I don’t know why. Finally someone asks the most relevant question. Why is there an academic degree of any kind for puppetry? Go to clown school!

IVV November 5, 2011 at 10:18 am

Here’s the thing: if Joe Therrien could credibly suggest that he could be the next Jim Henson or Julie Taymor, then I’m sure the market would gladly loan him the money for his education, or start-up, or non-profit, or whatever.

The trick is in understanding where being a puppeteer enriches society.

bluto November 5, 2011 at 12:25 pm

Henson knew better than to get a degree in Puppetry. He studied Home Ec to improve his craft and knowledge of textiles.

Max November 5, 2011 at 10:20 am

While there can be plenty of problems with the education market, this one is not a market failure as you think, Bill. People don’t choose to study literature/Queer Theory/Puppetry so they can make money, do they?

They do it because they love the subject, and want to live a campus life with people who think alike. That is consumption, not investment. That market is working pretty well. The problem is that they borrow 35000 dollars to have a 3 years party, and then complain when they don’t have the skills other people actually want to buy.

Obviously, even if you value consuption a lot, that can be pretty rational, as long as you can get the government to bail you out.

Andrew M November 5, 2011 at 11:43 am

“Campus life is consumption, not investment.”
+1 of the week!

Jay November 5, 2011 at 1:40 pm

Campus life is investment when you get drunk off your ass and get (someone else) pregnant.

msgkings November 7, 2011 at 12:48 pm

Boom. +2.

Bill November 5, 2011 at 4:15 pm

Max, Then you are getting what you paid for and should be happy with that choice and the loan which financed it. Good. That is a sign that the market worked for you because you knew that is what you were going to get and you got what the market signalled to you you would get. Be satisfied with that.

Jay November 5, 2011 at 10:25 am

Student loans should not be federally guaranteed and lenders should be able to offer different interest rates on student loans depending on the declared major and university. Going to MIT for an undergraduate degree in physics, I’ll lend to you at 10-year UST + 225 basis points. Going to UCONN for an MFA in puppetry, I’ll lend to you at 10-year UST + 2,225 basis points.

TallDave November 5, 2011 at 11:15 am

+1

Bill November 5, 2011 at 6:38 pm

Jay, I am the bank, and I am asking your dad to guarantee the loan, because that was the way it was before the student loan program.
So, if you have a wealthy dad, congratulations.
If you have a poor dad, may I refer you to the automotive repair class at Voc E Tech.

TallDave November 5, 2011 at 7:01 pm

Please, we didn’t even have credit cards back then. The credit market is much different today. They throw credit at kids today.

paul rene nichols November 5, 2011 at 10:28 am

I write and produce music, and I dabble in photography and filmmaking. However, I did not go into debt to learn my crafts, and I did not spend time on a degree at a university to explore my creative interests. I taught myself.

Why do people continue to think that they have to study at a university to work in creative fields? Most people with film, music, and puppetry degrees don’t attain high levels of success in their fields of study. Moreover, the tens of thousands of dollars that people borrow could be allocated more efficiently in the pursuit of a creative career, rather than spending it on hanging out with professors and grad students who’ve never produced a real work of art in their lives.

The bottom line is that we should no longer loan people money for fine arts degrees, period.

question the question November 5, 2011 at 12:29 pm

Agree – also from someone with a music composition background.

mark November 5, 2011 at 1:05 pm

Why do people continue to think that they have to study at a university to work in creative fields?

I’d agree. Ed “Big Daddy” Roth was making all sorts cool stuff that was every bit as bleeding edge as that there Dali fella over in Europe. And Roth did it all with what he learned in high school shop class.

Slocum November 5, 2011 at 1:38 pm

Because he didn’t want to be a working puppeteer, he wanted to be a higher paid teacher. For that, the degree is absolutely mandatory — being highly talented, creative or skilled is nice but not really required.

question the question November 5, 2011 at 3:25 pm

Not sure you have (or he had) any proof that a puppetry MFA would improve his salary.

Yes, oftentimes in education the advanced degree translates to higher pay, but in this case he apparently didn’t do his due diligence: in this case understanding the current market – his chance of landing another job, and one that would be higher paying.

zbicyclist November 5, 2011 at 3:50 pm

Good point about credentialism.

Bill November 5, 2011 at 2:10 pm

Agree with your point as well. If they do take out a loan, however, they think they are getting something when in fact they may not be getting something of value.

Improve information in the markets.

db November 5, 2011 at 10:32 am

Only having $35,000 in student loan debt after 3 years in a masters program at UCONN is pretty good. Just sayin’.

Jay November 5, 2011 at 10:50 am

Not when the NPV of holding the degree is less than $1,000. Have to match the assets to the liabilities.

CBBB November 5, 2011 at 10:42 am

Yeah he should have focused on studying a serious field like Math, Physics, Chemistry, or Biology and went for all the great opportunities in those fields….oh….wait…

The Anti-Gnostic November 5, 2011 at 11:09 am

How about this: there’s too much “study” all together. We are teaching young people that they are all going to have these fabulous careers that require years and years of specialized, non-transferable education. But the truth is very few of us are blessed with ‘careers.’ Most of us just have jobs.

I would encourage most young people to attend community college and get some intro humanities, accounting and other courses in conjunction with a trade of some sort. Learn the trade/vocation/etc., work, save your money, then when you have the capital open your own business and hire younger people like you, preferably family members and extended family with whom you’ve formed a large social and business patronage network by now. On Sunday, go to Church in a whole, big group together. In your free time, read great books and listen to great music. Go to great performances. Always spend less than you make. Remember that blood is thicker than water. Along the way, If you really have an aptitude for some graduate-level area, you will probably find somebody who will pay you to go to school for it.

That’s how life works in a sane society. We are an insane society. Our policies are nothing less than the enshrinement of insanity dreamed up by insane people.

zrzzz November 5, 2011 at 10:51 am

Kids are being steered away from STEM fields because increasing numbers of these jobs are being shipped overseas. Not only does your engineering job cost less than half in India, the degree is paid for by a socialized education system. They hit the ground running with zero debt and American-backed corporations start throwing shovels of money at them (by their standards). Money that would make a huge difference if it was being spent domestically. There are bigger problems in this country than college degree choice.

Jay November 5, 2011 at 11:11 am

“because increasing numbers of these jobs are being shipped overseas”

Reference necessary. Otherwise I call bull. This series from the BLS website is up 10% over the last 4 years and pays over $40 an hour on average…

http://data.bls.gov/cgi-bin/srgate
CEU6054171201
CEU6054171203

TallDave November 5, 2011 at 11:12 am

Indians are going to learn whatever pays well, STEM or not. When you live in a really poor country, your incentives are much starker.

albert magnus November 5, 2011 at 12:34 pm

STEM is particularly vunerable because it isn’t as sensitive to language skills and following intricate social norms.

CBBB November 5, 2011 at 1:09 pm

And unlike Medicine or Law, STEM jobs are generally not strongly regulated by Guild practicing that block competition.

jk November 5, 2011 at 11:01 am

HBR had an article stating that the MFA is the new MBA..
http://blogs.hbr.org/cs/2008/04/the_mfa_is_the_new_mba.html

Itchy November 5, 2011 at 11:56 am

Yes, that’s great and when she needs an employee to do something that requires math or thinking analytically she will look for A) a STEM student or B) a Puppeteer ?

CBBB November 5, 2011 at 12:03 pm

Well….realistically your typical MBA is probably just as airheaded as your typical MFA. And no one hires STEM Students – maybe Engineering, stop saying STEM.

Itchy November 5, 2011 at 1:05 pm

Where do you get your data? Both the Georgetown Center for Education and and the Workforce and Bureau of Labor Statistics (link in someone else’s comment) show otherwise.

CBBB November 5, 2011 at 1:08 pm

I want to see data that separates Math and Science graduates from Engineering graduates. ALL the growth in STEM jobs is from Engineering jobs, this is why I say stop saying STEM – because Science and Math degrees are not much more useful then degrees in Puppetry.

Rahul November 5, 2011 at 1:57 pm

@CBBB

Although I’m an Engineer there’s plenty of Science Majors that are also greatly in demand: Chemistry and Biochem for instance. The Pharma, Petroleum and Chemicals industries need loads of people with these backgrounds. Statistics majors are doing great too.

Donald Pretari November 5, 2011 at 11:42 am

I just talked Puppetry with my friend Mickey Sabbath, and we both feel a world in which the US Govt funds Puppetry is a better world and one of the best uses of our taxes, and we’re both pretty solid citizens. Throw that into the old equation.

Tony November 5, 2011 at 12:40 pm

My college had a program (and still has, I think) called “Take 5″ which allowed a student to take a tuition-free 5th year to study an area that was unrelated to your major. So if you were an science major, you could take a 5th year to study humanities, and vice-versa. Although you had to plan your curriculum such that you were still taking one or two courses in your major during that 5th year. Also you had to have a strong academic record to qualify.

Seems like a good deal to get a tuition-free year to “explore”. For some of my science classmates, it gave them an incentive to work harder in their first 4 years so that they could have the privilege of the free 5th year to study something they were curious about. I guess it also could have made them more “well-rounded”, whatever that means.

The Anonymouse November 5, 2011 at 1:06 pm

A person who spent four years getting a degree in a paying skill, while receiving good grades, would be a fool to take such a fifth year studying something unrelated for ‘enrichment.’

The real cost of that ‘enrichment’ is the tangible enrichment that kid would get by spending that year pursuing his career instead. You only have so many productive years in your life, and a slow start is a terrible idea.

D November 5, 2011 at 3:37 pm

Strongly disagree. My greatest regret is that in my twenties I focused too much on work and not enough on experiencing the world. Once you get out of college it’s really easy to have tunnel vision.

msgkings November 7, 2011 at 1:01 pm

+1

msgkings November 7, 2011 at 1:01 pm

-1

Bill November 5, 2011 at 2:16 pm

My daughter got a degree in organic chemistry from CalTech, and finished a semester early.

It was a grind (although she is now a patholigist).

She had a semester she could take for free–paid by her dad–to take ANY courses she wanted to that next semester at CalTech.

After making her the offer, she turned to me and said:

“Dad, this love of learning thing skips every other generation.”

Sigh.

stalin November 5, 2011 at 1:11 pm

The Anti-Gnostic
Remember that blood is thicker than water.
And it clots

Kevin November 5, 2011 at 1:15 pm

Can I play devil’s advocate and suggest that an MFA in puppetry might be good preparation to be a public school teacher? And that $30k is a reasonable level of debt for someone who is willing to undertake this sort of career? In ordinary times Therrien’s career path wouldn’t be worthy of comment — a large fraction of public school teachers are people who tried something else and washed out. This includes some of the best teachers I had, btw.

Foobarista November 5, 2011 at 1:47 pm

He already was a teacher. The real question is why would he bother with a degree when this would seem to be something he could easily pick up as a volunteer. I doubt that puppet troupes have HR bureaucracies that insist on master’s degrees before they’ll talk with you.

Kevin November 5, 2011 at 4:11 pm

The only person I know of who leveraged a career in puppetry into celebrity status is Julie Taymor (of “Lion King” and “Spiderman” fame), and from her resume it seems clear (to me, at least) that getting the right credentials was critical to her success. Just reread the blog post — it’s clear Tabarrok engages in a bait and switch. The “kind of job that Kim thinks are the entitlement of the middle class” has nothing to do with puppetry. As you note, Therrien was an ELEMENTARY SCHOOL TEACHER. He did a good job, went away for three years to pursue a dream, and then found he couldn’t get his old job back. Now maybe this NYC hiring freeze won’t last — I don’t know the situation. If it’s true that getting a job as an elementary school teacher is a lofty ambition — even after you’ve demonstrated that you do this well — then yes, as a society we’re eating our seed corn, it’s that simple.

stalin November 5, 2011 at 1:16 pm

Donald Pretari November 5, 2011 at 11:42 am
I just talked Puppetry with my friend Mickey Sabbath, and we both feel a world in which the US Govt funds Puppetry is a better world and one of the best uses of our taxes, and we’re both pretty solid citizens. Throw that into the old equation.

Then you and Mickey should fund a few puppetry majors.

Donald Pretari November 5, 2011 at 3:30 pm

I don’t see how that follows, but I’ll let Mickey know what you said.

stalin November 5, 2011 at 1:18 pm

Oh, and when you get your monay back you can fund more. Should work

thehova83 November 5, 2011 at 1:35 pm

Isn’t this subject getting a little tired on MR? It’s a funny anecdote, but is it insightful or representative?

CBBB November 5, 2011 at 1:49 pm

It’s a core part of the propaganda of this blog – Tyler and Alex want to try to blame unemployment on people not finishing high school, going to university and not studying the right subjects while in university. They don’t want to face up to the fact that there’s some fundamental problem with the economy – they want to create a narrative whereby if only people studied so-called STEM subjects in school they’d have great job prospects. But as I said this is only true for a relatively small fraction of STEM graduates.

Jay November 5, 2011 at 2:06 pm

You don’t understand the definition of propaganda. For examples of propaganda see Fox News, MSNBC, or any Michael Moore “documentary”.

CBBB November 5, 2011 at 2:09 pm

Or Marginal Revolution

MD November 5, 2011 at 11:52 pm

You really are turning into a bitter crank.

Andrew' November 6, 2011 at 2:43 am

“They don’t want to face up to the fact that there’s some fundamental problem with the economy”

What if (one of) the fundamental problem(s) is a low ratio of product/costs of our workers compared to the new workers being integrated into the global economy?

Andrew' November 6, 2011 at 2:45 am

“It’s a funny anecdote, but is it insightful or representative?”

Sometimes single anecdotes are representative. For example, if your legal system lets a murderer go and he murders someone the same day. If a canning operation allows one can with botulism toxin. A nuclear bomb goes off in a city. If there is a major in puppetry.

Foobarista November 5, 2011 at 1:39 pm

He should have studied the other type of “puppetry” (Puppet is a change-management system used by IT organizations that has become the “hot new thing”):

http://online.wsj.com/article/SB10001424052970204505304577001980486025736.html?mod=WSJ_article_comments#articleTabs%3Darticle

CBBB November 5, 2011 at 3:59 pm

Until the new hot thing changes in 6- months and HR decides his skills are hopelessly outdated and that’s it for his career. I’m not sure Puppetry is a worse field to study then a lot of the IT programs out there.

freemarketer November 5, 2011 at 1:43 pm

I’m surprised Americans incur substantial debt to study a subject which has so low job potential. Does idealism blind them to harsh reality until it is too late?

Anti Gnostic says: “We are an insane society. Our policies are nothing less than the enshrinement of insanity dreamed up by insane people.”

How would you describe a society in which a university department had no student enrollment last 20 years, and yet the faculty receive a fat cheque every month from the state and a pension too? I am describing an actual department in a state funded university in India. Can a poor country afford this criminal waste of scarce resources?

Dredd November 5, 2011 at 4:02 pm
Chris November 5, 2011 at 4:27 pm

In Chicago there is (was?) a long-running show called Puppetry of the Penis – which turned out to deliver exactly what the title implies with no irony.

Sounds like this puppeteer needs to be more creative about the application of his newfound skills.

Bill November 5, 2011 at 4:34 pm

Masters in Puppetry

From the UConn website:

“Classes in puppetry were first taught at UConn in 1964 by Professor Frank W. Ballard, who had joined the faculty of Theatre Department as a set designer and technical director eight years earlier. After three years, the demand for these courses had grown so drastically that the department had to limit enrollment in puppetry classes.

Professor Ballard’s first full-length puppet production, The Mikado, was presented on the stage of the Harriet S. Jorgensen theatre as one of the department’s Mainstage productions. UConn soon became one of only two (soon to be three) universities in the country offering a BFA degree in puppet arts and the only institution in the country offering masters degrees (both MA and MFA) in the field.

Graduates of the puppetry program perform and design for many theatres around the world. They appear in, build for and manage internationally recognized television programs (such as Between the Lions) and films, write books, design toys, teach children, and direct prominent schools and museums.

In 1990, Bart. P. Roccoberton, Jr. succeeded Frank Ballard as Director of the Puppet Arts Program. In addition to the full-stage Puppet Productions that are mounted for the Department’s Connecticut Repertory Theatre, puppetry majors are encouraged to mount their own productions, which are presented at the university and toured to schools, museums and theatres. Nearly 500 student puppet productions have been presented since 1964.”

Here is the link: http://www.drama.uconn.edu/Puppetry/Puppet_home.htm

Classes start next Fall and if you mention Marginal Revolution, you will get a signed autograph from Howdy Doody.

Bill November 5, 2011 at 4:39 pm

Click on the youtube link for the puppetry movie and claims about the success stories of the UConn graduates.

wintermute000 November 5, 2011 at 6:21 pm

Although I am a fervent believer in micro-economics and behavioural economics, I think this article suffers from two major fallacies

- one anecdote /= real evidence (this point has been hammered home above)
- study is not just about economics or economic incentives, nor should it be.

We’re not in medieval times anymore, if everybody just pursued the fields of study of greatest economic benefit, where would we get art and literature etc. from. One of the great things about human civilisation is that division of labour has enabled people to pursue things that don’t in and of itself contribute directly to physical/economic survival (like the arts). With the way art and artists function I don’t think that market forces will ever account for or adequately generate the outcomes that has led to the great artistic achievements of history

freemarketer November 5, 2011 at 8:32 pm

wintermute000 : “if everybody just pursued the fields of study of greatest economic benefit, where would we get art and literature etc. from”

“if everybody just pursued the fields of study of greatest economic benefit” there would be less frustration among college graduates and no OWS nonsense.

Great culture is not created in universities. Great writers have it in them to write well and the greatest among them, past or present, did not acquire the skill in undergrad or grad schools.

Final point: one can pursue a field because of its money earning potential and yet be a connoisseur of literature and art. My sisters went to college to get the best possible jobs and not to be culturally enriched. Soon they were earning more than their professors 40 years older than them. But both have cultivated a deep appreciation of great literature , music and philosophy . And since they are earning well, they are able to generously support some artists who are hard up. And they now teach their daughters to go to college to get the best jobs possible and not for idealistic reasons but also to cultivate cultural interests. I think this is the best way to bring up one’s kids

culdesachero November 5, 2011 at 9:33 pm

Art is a luxury – to consumers and to practitioners. To say that a $35,000 investment in Puppetry should result in a paying job is like saying that buying a ski vacation, hot tub or nice suit should result in higher earnings. They may have benefits in social, professional realms, but any material reward should be considered a bonus.

Bill November 5, 2011 at 10:52 pm

Go here to see the job openings for persons with MFA degrees: http://www.careerbuilder.com/jobs/keyword/mfa Is this much different than degrees in theatre arts and dramatics, hotel management, and a masters in raising horses, and for that matter, a graduate degree in history or military history.

Art is a luxury, and people pay for luxuries. In fact, a friend of mine’s daughter got an MBA in Luxury Goods–believe it or not–offered by a graduate school in Monaco, and today works in NYC for some fancy schmancy high end shoe company working on their advertising and marketing programs. I rolled my eyes when I heard that my friends daughter was pursuing this degree, and all but smirked when I heard it for the first time. But, hey, some people design, draw and program world of Warcraft too.

If Steve Jobs were alive, he would probably disagree with your view of design and its importance in commerce.

bluto November 5, 2011 at 11:53 pm

On the first page, MFA only referred to a Master of Fine Arts three times, and once they wanted to hire a web designer which would require a decent amount of non-degree related skill (though probably not a separate major or degree). Unsurprisingly, the other two fine arts jobs were both at educational institutes. Most of the jobs were in the medical field for Medical Facilities of America.

Steve Jobs experience is rare because he was able to relate very well with geeks like Woz, without that skill his knowledge of fonts, design, and other obscure but useful knowledge wouldn’t have been very applicable.

Bill November 6, 2011 at 3:28 pm

There were three pages more. Keep looking.

culdesachero November 6, 2011 at 8:45 pm

I never said that design isn’t important to commerce. I did say that art is a luxury. You’re friends daughter went to Monaco for a degree. That alone sounds like a luxury. If you were already starting with good connections and a certain level of affluence, then you’re more likely to find success in a field such as luxury goods. However, that is not art.

Any artist who supports him/herself well by the art alone is a very lucky person. I’d put art careers in the same category as professional athlete. It takes a good deal of talent, a tremendous amount of work and it doesn’t hurt to start with the best training that money can buy (i.e. luxury). Unless you already have enough money to sustain yourself, I’d say don’t pick art (especially one as esoteric as puppetry) as a main career unless you’re willing to live a very spartan life for an indefinite period.

Design is important to commerce (essential), but there is so much competition, it offers no guarantees. Math, on the other hand, can almost always land a job. I don’t know why you compare an MFA in Puppetry to Hotel Management or even a History degree. I think student loan applications should select based on likely salary expectations.

Go here to see a list of acronyms for MFA, many of them show up in your list. http://www.acronymfinder.com/MFA.html

Leigh Caldwell November 5, 2011 at 11:50 pm

The debate in these comments reminds me of the outrage in the British tabloids whenever the BBC, or a government department, employs someone with a job title that the readers don’t understand. Examples include “future shape programme manager” or “diversity officer”.

Many roles in a modern economy are extremely specialised roles which – by definition – will be of little relevance to 95% of readers of any mass-market publication, or indeed economics blog. No doubt few of us will have direct need of a puppeteer in our lives; but most of us will attend a theatre show at which a prop master (which is the kind of job he may have expected to get) will have played an essential role.

Naturally in an economy like today’s, his degree looks like a bit of an indulgence – and as Max said, it probably is in some ways a consumption and not an investment good. But three years ago – and even more so four years ago, when he would have had to apply for the program – in a booming economy, specialisation was obviously the way to earn more money. Remember all those people in 2009 who decided to ride out the recession by spending time on a postgraduate degree?

A number of my friends are in a cohort of MFAs in theatre directing who graduated about 4 years ago. They are mostly in decent theatremaking jobs now (creatively fulfilling if not well-paid), though I believe one or two are still freelancing or teaching drama. If they’d had the bad luck to graduate this year instead, I’m sure they would be struggling. However, I don’t imagine that Joe was under any illusion that he’d walk straight into a job on Broadway. The nature of that industry is to freelance, make your own productions, do part-time work, and keep hustling for a few years until you either get a full-time post or start making a bit of money with your own theatre company.

Along with Alex, I thought the journalist’s decision to choose Joe as his example was a poor one, unless he was trying to make a particularly subtle point about structural underemployment and skills mismatch. But reading the article, it feels as if he picked someone who actually exemplifies OWS itself – as opposed to exemplifying any of the problems that OWS is trying to tackle.

What’s intriguing is that joining the Occupy movement has apparently converted Joe from the goal of parlaying his Masters into a $10,000 raise in the NY school system, into “figuring out how to make theater that’s going to help open people up to this new cultural consciousness. It’s what I’m driven to do right now”.

Frankly, we benefit from the existence of both good schoolteachers and artists. I hope he finds a way to make a contribution in whichever role he picks in the end.

Leigh Caldwell November 5, 2011 at 11:59 pm

By the way: $100,000 on puppetry in a $787,000,000,000 stimulus bill really isn’t so bad. Arts are a classic public good – lots of positive externalities – and since employees are cheap, a cost-effective way to save on unemployment benefits and likely increase the multiplier. To spend one 8-millionth of the stimulus money on this particular branch of the arts is hardly an indulgence.

jk November 6, 2011 at 12:11 am

I wonder if there is a hierarchy among the MFA students: Musicians sneer at Painters/Sculptures who look down on Theater. I assume Puppeteers are at the bottom of the barrel.

David Littleboy November 6, 2011 at 10:30 am

I haven’t done MFA related things since around 1970, but my impression was the painters/sculptors looked down on the musicians who looked down on the theater types who looked down on everyone. I suppose things may have changed.

freemarketer November 6, 2011 at 1:10 am

I think it is best if all the courses in a university are classified in terms of employable skills and this classification should be made known to the banks which loan students money to study good for nothing courses. The banks then will avoid lending money to students enrolled for puppetry and philosophy. The courses can be designated to indicate the value in the job market. So a course in puppetry or philosophy can be designated UG, for “unemployment guaranteed.”. A bank manager would not like to lend to a student enrolled for a UG type programme!

Horspool November 6, 2011 at 2:12 am

Obviously an MFA in puppetry is superfluous, an apprenticeship would be more appropriate for someone wishing to work as a puppeteer, so the guy probably wanted a nice academic job as a puppetry teacher and has now found out that the bubble has burst and noone wants to pay him to do something so absurd (since the actual demand from ticket buying audiences is way lower than the silly demand from subsidized college students who all want to end up in puppetry-teaching jobs).

The guy is a fool and there are millions of other fools and the real problem is that higher-ed lobbied the govt into diverting evr more young people and tax dollars to into pointless academic programs on false hopes of future employment since “college grads always earn more”; something which was only true when most people did not go to college. If everyone goes then is no distinction and just having a degree in puppetry (jeesh, whatta crock) won’t be worth anything.

freemarketer November 6, 2011 at 6:25 am

As a resident of India I don’t have much familiarity with the way American students pay for their tuition. I understand from the discussion in MR that some kind of loan is involved. One would think that the debt will be an incentive to invest money only in degrees with good value in the job market. Evidently, that’s not how the market works and students incur substantial debt for worthless academic progeammes.

The American students apparently violate the economic principle of rationality, Or is this a case of market failure? It looks loony to me

Deaderjack November 6, 2011 at 5:49 pm

1) Young middle class kids in wealthy countries live in a bubble, often rationality has little to do with their economic decision process.
2) Not market failure, a classic example of government policies creating unintended consequences.
3) Your observation has merit.

sam November 6, 2011 at 6:35 am

I don’t think we here in the benighted United States need instruction from somebody in India on the deficiencies of our educational system.
Indian Students Wield Tests for College Spots

The mania over testing [in India] underscores a fundamental disconnect in Indian education: Even as elite Indian students have achieved remarkable success studying overseas [hmmmm], the Indian educational system is widely considered to be failing both the tens of millions of students at the bottom, who drop out before high school, and the smaller pool at the top, who are competing for entrance into universities that are too few and too underfinanced.

Education presents such a stubborn problem, especially access to quality education, that experts warn that the future advantages of India’s youthful population could become a disadvantage if the government cannot improve the system rapidly enough to provide more students a chance at college. Of the 186 million students in India, only 12.4 percent are enrolled in higher education, one of the lowest ratios in the world.

“If you have 150 million or 160 million children who don’t go to college, what is going to happen to them 10 or 15 years from now?” asked Kapil Sibal, the government minister overseeing education. “The demographic dividend will become a demographic disaster.”

Education reform has become a centerpiece of the Congress Party-led government. The federal Right to Education Act takes effect on April 1, focusing on expanding free and compulsory education, lowering teacher ratios and a host of other goals, even as the government continues to separately push forward on a major school construction program.

Higher education presents a problem of quantity and quality. Even as India’s top students are world class, most Indian universities are not, with roughly two-thirds of colleges and universities rated below standard. And the limited number of quality schools is especially problematic given that 40 million extra students are expected during the coming decade.

ScottA November 6, 2011 at 9:39 am

The problem is likely somewhere between the government mis-aligning incentives by encouraging excessive education and individual stupidity. That aside, how in the world can anyone feel any sympathy for this moron? There is something to be said for constructive honesty – did he not have one friend willing to say: hey, Joe, I know you like puppetry, but do you really think it’s worth going $35,000 into debt? This principle applies in general – bad decisions are only sympathetic if the decision-maker accepts that he made a bad decision.

Bill November 6, 2011 at 1:49 pm

Scott, I did a little job search for puppeteers. Their average wage was is $28 an hour. They are hired as stage and prop designers as well, some work in interior design later (think lamp design or doing the funky features in a high class bar). There are childrens museums that hire them, and this is the only MBA program in theatre arts in the US (not that that means there is a product here).

What you say is equally true of people who get MBAs in military history, creative writing, hotel management, stage design, dress design, specialize in handbag and shoe design, etc.

And, besides, the guy is currently employed half time and looking for work whereas others are taking vocal lessons to appear on some TV song show competition.

Tim November 6, 2011 at 11:13 am

And yet conservatives are buying into this “wrong degree” nonsense. The problem isn’t that he got an MFA in Puppetry. The problem is that he believes in the old economy where a degree equals a job. An MBA or a BS in Computer Science are just as ridiculous degrees if you think that by having them you are guaranteed a job. We are in a globalized world. None of those degrees guarantee anything. If anything the MFA in Puppetry is more valuable because economically there are fewer people with it. And a business manager or programmer with a MFA in Puppetry is liable to be far more valuable than a business manager or programmer with just a MBA or CS degree. Read that last sentence again. That is the new reality of education.

zbicyclist November 6, 2011 at 3:25 pm

“the old economy where a degree equals a job”.

Sure. We’ve never had recessions, depressions, and panics before.

There have been previous posts on MR noting that if you start looking for a job during a recession it’s (a) hard and on average (b) has a long term negative effect. These studies were (obviously) done looking at past recessions – it’s never been good to graduate in liberal arts during a downturn.

Admittedly each recession is different; this one is longer and more severe and comes with a heavier dose of consumer debt. But this old economy / new economy dichotomy is a false one.

Chris Durnell November 7, 2011 at 4:25 pm

I think there’s a point though. Many people have been conditioned that graduating with a college degree, regardless of what that degree is, is a ticket to a good job and be fairly secure in being gainfully employed. However, while that may have been true in the past (and certainly amongst the parents’ generation of current students/graduates), it is no longer true today. We have dramatically reduced the value of the undergraduate degree because 1) many people have one now, so it can’t be used to distinguish applicants, 2) many new degrees are useless in creating wealth, 3) the diploma mills have lowered the standard to get one, and 4) because the mantra is “get a degree” we’ve pushed unqualified people into college, the kinds of people who have remedial skills and should never be in college to begin with.

Thus, with the undergraduate degree so devalued, we’ve begun pushing people into the Masters Degree despite most jobs really not needing one. Thus we are creating the same problems as before, but adding even more debt onto the student.

The major problem is that the US is suffering from credentialism. Relatively few are thinking about whether they are/will be creating wealth or adding value. They think having the credential alone will guarantee them a good career, and that is no longer true. The country needs to fundamentally examine its educational system and mentality. We need to drill into everyone’s heads that simply having a degree means nothing. We need to revalue the trades and encourage some people into them, the type of people whom college is not a very good path. For the college bound, we need to break the idea of credentialism and get them to thinking of how they are going to add value (if a career is what they want out of college). We need to make people acutely aware of the limits of how many academic jobs there are. There will always be those who do not prioritize financial gain and pursue their bliss. That’s fine. But even they need to be aware of their job prospects and give consideration to personal finance so they can make the decision whether $35,000 in debt (plus whatever cash was spent, plus loss of income while going to school) is good deal to be able to say an MFA in Puppetry is sound.

I think too many people go to college or continue with graduate degrees simply because it’s the next thing to do. They’ve been in school most of their lives, so staying in school seems the thing to do. We need to get people to really think about their personal and career goals and think abotu what they need to do to achieve them. Assuming that having a degree means somehow they’ll do well is not enough.

Once we accomplish that, we can honestly examine higher academy and think about what needs to change to accomplish that. The current rate of escalating college costs is simply not sustainable, and something has to give. Once people know the credentialism jig is up, they aren’t going to accept that they need to pay tens of thousands of dollars to be no better off. There has to be alternate solutions to this, but it all begins with realizing credentials are not enough and think about how we contribute or add value. That will put the value of some academic degrees into very harsh light.

Amazed November 6, 2011 at 7:49 pm

Hey, it’s a free country. If the puppetry maven wants to borrow money for a commercially unsupportable that’s his prerogative. More power to him……as long as he has the means and the will to fulfill the obligation he willingly and voluntarily made to repay said loan. But for him to whine about it is the height of childishness. So much so that I would question his fitness to teach. God forbid he should have to take the consequences of his own foolishness. Kwitcherbellyachin and make me laugh, puppetmaster…..you’ve already got me laughing…..

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