Thomas Frank is the bestselling omni-critic who founded The Baffler magazine and edited it for years. He’s a columnist at Salon.com and he wrote the book on the turning of American politics ten years ago, What’s the Matter with Kansas? Shifting focus from politics to higher education, he did it again with “Academy Fight Song,” a Baffler piece published last winter. The question, his and ours: how did higher education, in general, turn from the days of the GI Bill — and the land grant colleges long before that — to being a trap for seventeen-year-old kids who are signing away their lives into eternity with student loans? College has turned into a trap, maybe, for all of us. Will it be the undoing of the great American middle class?
debt
May 8, 2014
Higher Ed By The Numbers
This week, we've asked lots of people two questions: What's the matter with college, and is it still worth it to go? The trends in American higher ed toward higher tuition, more debt, and away from public funding of higher ed. But what's life without a degree in the new economy? We've tried to reduce the story to the tale of the tape. What do the numbers tell us about the state of higher learning?
By Max Larkin
This week, we’ve asked lots of people whether it’s still worth it to go to college. Parents and students at the college fair said of course, while one college admissions counselor said maybe not. (He wasn’t willing to say it on the air.)
The trends in American higher ed go toward higher tuition, more debt, and away from state support. Still, what’s life without a degree in the new economy? What do the numbers tell us about the state of higher learning?
1. “College” means something different from what it meant a generation ago. More than 70% of the 21 million students are seeking degrees at public colleges and universities. Almost half of them attend two-year institutions like community colleges.
More people than ever are being educated past high school — but that education doesn’t look the way it did 50 years ago. (Source: The Almanac of Higher Education, 2013).
2. States began to cut public college and university budgets in 2008, and the cuts are deep. On average, states have cut $2,394 from funding per student at their institutions of higher education since 2008. That’s a drop of 26.7% over six years. During the same time period, tuition has risen on average $1,282 — an increase of 20%. So public colleges and universities are passing tighter budgets onto students and their families.
Consider the story of University of Massachusetts at Amherst, in two charts. The first shows the rate of annual state appropriations and the annual average price of tuition for all public higher education in-state.
As appropriations per student drop, UMass has filled the gap in funding by raising fees. Back in 1987, tuition payments represented just 2.3% of UMass’s annual revenue in 1987. Now that number has risen to 29%. Until a turnaround last year, a report from the State Higher Education Executive Officers observed the same trend in every state except North Dakota.
3. Student debt has surged. The total amount of student debt, having tripled between 2004 and 2012, is one of the economy’s unthinkably large numbers: $1.2 trillion. $1 trillion of that is federal government debt issued through Sallie Mae, meaning that the government profits from the interest and taxpayers are exposed to the default risk. The problem is especially pronounced in the for-profit private colleges, where almost all graduates borrow, and almost a quarter of them default on their loans within 3 years. (Source: College Board and Suzanne Mettler in The New York Times).
4. Still, college makes a difference. Despite the economic risks, the reward — the often-cited statistic that a bachelor’s degree is worth a million dollars over the course of a lifetime — has proven irresistible. The Pew Research Center found that the cost of not attending college is indeed rising. No degree means much higher rates of unemployment and poverty and lower lifetime salaries.
Is the good life possible without higher education? What do you see in the numbers? Leave a comment and be sure to listen tonight, May 8, at 9 ET on WBUR.
Podcast • September 6, 2011
Mark Blyth (5): Sovereigns, Citizens and Suckers
Click to listen to Chris’ conversation with Mark Blyth (28 minutes, 14 mb mp3) Mark Blyth is back in the pub, just in time, talking trash again and taking some credit. He’s the political economist ...Click to listen to Chris’ conversation with Mark Blyth (28 minutes, 14 mb mp3)
Mark Blyth is back in the pub, just in time, talking trash again and taking some credit. He’s the political economist who doesn’t mince words, even when he’s writing for fellow professionals. At Triple Crisis, for example, the other day: “The European sovereign debt crisis is little more than a huge ‘bait and switch,’ perpetrated on the publics of Europe, by their governments, on behalf of their banks…”
In the Scots vernacular, he is reminding us (and the Tea Party) not just that our humongous public debt is a gift of the private sector and the bailed-out banks, since 2008, but also that much the bigger piece of the general debt crisis today is the household debt that’s nearly doubled in the US in the last decade: i.e. underwater mortgages and credit card debt. So are we looking at a “Japan decade” of de-leveraging (paying down debt) and very slow growth?
Hold on. Have you been to Japan lately? It’s a pretty nice place. That decade of ‘helpless stagnation’ is actually okay: Japan’s got more modern infrastructure than we have by a factor of twelve. It’s got better educational outcomes, people live longer. So let’s put this into perspective: it means that you don’t have absurd growth and a housing bubble, it means that you don’t go back to people betting their entire fortune on an internet stock. We stop the casino, we chill out for a while, we pay back some debt. It’s probably a good idea. But we’re not going to do that if we slash the government budgets at the same time that we’re all trying to save the private. You can’t do both.
Mark Blyth with Chris Lydon at the Watson Institute, Brown University
Podcast • December 1, 2010
Mark Blyth on Ireland: The Circle will not be Squared
Mark Blyth, of Austerity fame and the Watson Institute, has a Scot’s vernacular gift for clarifying economics. Is the situation explosive? “You’ve got 300 million Americans and 500 million handguns. And 72 percent of Americans ...
Mark Blyth, of Austerity fame and the Watson Institute, has a Scot’s vernacular gift for clarifying economics. Is the situation explosive? “You’ve got 300 million Americans and 500 million handguns. And 72 percent of Americans that live paycheck to paycheck. Do the math!”
We’re talking in particular about the Euro crisis spreading out of Ireland. Short form: tiny country, continental meltdown in the offing.
It was never a “Celtic Tiger,” in the first place, in the Blyth telling. “It was a small ocelot with a roar.” A population the size of Brooklyn, NY, producing about 2 percent of the European GDP. And now, in deep pain of cuts in education and health services, it’s having an utterly illusory shouting match, not so unlike ours in the US of A.
“People want to say: look at those profligate governments, spending all that money. We’ve got to restore fiscal sanity. But it wasn’t fiscal insanity that got us here. It was private-sector leverage and the insanity of banking that brought us to this point. So the bankers put it on the state, and the state turned around it put it on the taxpayer. It’s the biggest bait-and-switch in human history.”
As the Euro bankers try to transfer risk and responsibility for their crisis back and forth from private to “sovereign” public debt, I’m asking Mark Blyth — using Ireland as a manageably small example — to find the point where justice could be said to meet necessity. It turns out, he says, that there’s no such point. Not in sight yet, anyway.
The just thing is that the banks should pay. No question. You made the mess. Clean it up. It’s a pretty simple rule. But the basic line is this: if you let the banks fail, there’s nothing coming back. So if you’re Ireland, the Celtic Tiger, and over 10 percent of your GDP is in the financial sector, that’s where you make a lot of money, bankers’ salaries and all that. So let’s say you decide to blow up 10 percent of the economy. What’s your next trick? We can try to reflate it. We can hope that it comes back. We can hope to raise the patient from the dead basically. In order to do that you need to have a growing economy. So obviously hacking away at austerity politics is not going to bring back the bankers’ balance sheets. But on the other hand, it’s not clear what else you do with them. They don’t have any money to pay back, unless you bring the corpse back to life.
Now the only way you can do that is by having growth-enhancing policies, and that’s why austerity is not one of them. But there’s another short-run way you can do this. If you had to take all the debt off the banks and put it on the public balance sheet, thereby making the bondholders of sovereign bonds concerned about the value of their holdings, those sovereign bondholders are going to go to the EU and Germany, and remind the bankers in those countries about all the different bonds they’re holding in all these peripheral and non-peripheral countries, and say: do you want a bank run on this?
Because here’s the deal: if the Irish decide that they’re going to put it on the banks, and the banks can’t pay it — if they say: Screw it, we’re not going to take austerity politics anymore. Hell with it, we’re not going to do this! — okay, what’s your next trick, Ireland? Well, we’re going to default, we’re going to back out of the Euro! Oh, really? The minute I know that, I’m going to dump every Irish bond I can, and the minute I do that I’m going to look at my holdings in bonds and I’m going to say: there’s other guys out there. They can default, too, and probably the Spanish are going to go as well. So then I start dumping the Spanish and then the Portugese. And then everybody’s dumping all these bonds together. You’ve got a massive run that wipes out not just 2 percent of Europe’s GDP, Ireland. It basically takes out the European banking system.
So from the point of view of Europe and the Germans in particular, they’re saying to the Irish: You’re not going anywhere, Ireland. And you’re taking this austerity, and you’re going to like it! The only problem is: they’re not going to. There’s a democracy in Ireland. They’re going to vote the rascals out. And when they vote them out they’re going to get a government that says: maybe the banks should pay for this. And then you’re back to your problem: the banks don’t have any money left. So how are you going to do it? You can’t square a circle!
Mark Blyth with Chris Lydon at the Watson Institute, Brown University, November 30, 2010
Podcast • June 25, 2009
Juan Enriquez: The Next Boom, by Zipcode
There is no rescuing this economy from our debt, denial and epic implosions like General Motors and the city of Detroit. The only hope is that our unfinished season of disaster will be inundated (and ...There is no rescuing this economy from our debt, denial and epic implosions like General Motors and the city of Detroit. The only hope is that our unfinished season of disaster will be inundated (and the new economy floated) by a flood of invention.
Juan Enriquez‘s vision makes you want pray for a rain-out, bet on the flood. Especially if you live in one of the research and teaching centers of the world — best of all in MIT’s zipcode: 02139. Recovery, jobs and money are all fuctions, in the Enriquez brief, of zipcode concentrations of brain cells and emerging new “life science” industries.
Juan Enriquez is an investor, teacher, writer and sometime politician who’s famous now on YouTube and the conference circuit for riffs like this one. We’re picking up on, first, a TED talk he gave this Spring in California, and then a grand Boston boast that the Red Sox playing field is the epicenter of the next economy. At TED, he pictured a race underway between the crashing of car companies and newspapers and other branded industries and the simultaneous blooming of super-tech invention: the Big Dog carry-all robots, implantable organs and shoe leather man-made without cows. I asked Juan Enriquez in his Boston office tower for a sort of scorecard as of late spring in year one of the Age of Obama. The bad news is that we’re in real danger of sinking ourselves (not our kids — us!) with debt we cannot pay. We’ve been through some tentative confession of our sins, but atonement is still to come. Here’s the good news:
I’ve never seen a better time to invest: things are cheap, there’s a lot of smart people around, there’s a lot of technology we’ve been investing in for 15, 20 years in life sciences that is incredibly exciting right now. And Boston is the center of the universe for that stuff. Per capita, there isn’t a smarter place than Boston right now…
Half facetiously, I claim that the center of the universe is the pitcher’s mound at Fenway. And the reason for that is because you’ve got Boston University sitting on one axis, Harvard on another, MIT on another, then Boston College and Harvard Medical School… Within a three to five mile radius of that pitcher’s mound you have an awful lot of what the new economy looks like.
Of the known universe, at this point, the corner of Vassar St. and Main St. may be the single most interesting corner anywhere and the reason why is because you’re sitting in the middle of a zipcode, 02139, that has generated one the largest economies on the planet in terms of the companies that the faculty and students that graduated MIT have done. The second reason is that you have a huge concentration of life-science powerbases that around the Whitehead and the Broad Institutes and the Human Genome Project. You have a new neuro-cognitive center, the Picower Institute where they’re bringing together in one building everybody who’s thinking about the brain. So if you’re a psychologist or a psychiatrist, if you’re a neurosurgeon or a brain imager, if you’re a computer scientist, anybody who’s thinking about brain circuitry or how this thing works, you’re all talking to one another in a building, which is highly unusual for academia.
And then right across the street from that you’ve got a Frank Gehry building that has possibly the next generation of computing, the next generation of artificial intelligence, and the next generation of robotics. And you bring those three things together — and you think of single professors’ labs — a lab the size of your house — generating market caps of five or 10 billion or 20 billion dollars in the students that are graduating and the companies they found…
When I want to show somebody why the US is still a really important power despite the debt, despite a certain sabbatical from governance, I drive them through the area… As you go past the Stop & Shop, you’ll see the old NECCO candy factory, which has now become the global research headquarters for Novartis. In three other huge buildings next to it they’ve taken the three big Swiss Pharma companies – Ciba, Geigy, Sandoz – merged them and offshored almost all of the R and D to Cambridge, MA, which is a big deal! That’s offshoring probably five percent of the future of the Swiss GDP. That’s what the bet is… And then you hit the Charles River, which is lovely, right?
Juan Enriquez in conversation with Chris Lydon, Boston, June, 2009.