Harman on Mark Taylor

Graham writes:

Like many people, I’ve found Taylor’s recent op-ed pieces (and now a book growing from one of them) to be unilluminating in a number of ways.

However, I think Bell [who reviewed Taylor’s book] is a bit too quick to dismiss the idea of an “education bubble”. I’m not sure how long the formula of skyrocketing tuition plus ghastly student loan debt can continue. Already I know a dozen or so people with humanities Ph.D.’s and over $100,000 in debt.

His point is well made. The cost of education has been made possible through the student loan industry. Thus while wages have been stagnant for the last several decades, those very same people are now paying much more of their income to the banks and health insurance companies. Underplayed this past year was the federal legislation that changed this dynamic a bit, in terms of considering such loans paid after a given amount of time (though, of course, still well into middle age).

But sadly, I think this is going to be an ongoing bubble (in which case, I guess it’s not a “bubble”). Why? Because with organized labor now killed off, or limping, the massive cost of higher education is the price to pay for a “middle class” existence. And public universities are cutting back heavily, such that the number of people taking out loans to get “degrees” from private, for-profit universities is on the rise. And the crop rotation each year just lays the seed for more of this, not less. A bubble economy is one built on models of infinite growth against limited possible consumption. But, in this case, it’s hard to see where the stopping point would be. So, we’ll have further generations of young people graduating absolutely needing the first job handed to them, with a 6 month clock ticking down to their first payment on those loans. Then those loans are not cheap and thus one has an indefinite “I’ll have to keep this job no matter what” approach well until this person’s own kids are getting ready for college, and the cycle repeats.

Then you’ll read from people who should know better about how this young generation just loves to live with its parents and are lazy, video-game playing losers. (I leave this as a note to my future, no-doubt even more grumpy self: someone will dig this up if you write something like that in the future. So don’t do it.)

Finally, while Graham is making a good point, it’s not one really connected to Mark Taylor’s book, since his “solutions” would only accentuate these problems (providing useless “interdisciplinary” degrees from private, corporate-style universities). In other words, perhaps there is some sort of bubble, as Taylor suggests….but give a wild monkey a hammer and it will hit the hammer on the head once in a while. But that doesn’t mean you trust it to build your home.


  1. It seems that costs growing faster than inflation is not sustainable. I am not entirely sure what the future will bring. You are completely right that currently the system we have seems semi-secure without an alternative. Though I can easily see some sort of top down regulative legislation shifting things a lot. For example, if the entire system is being propped up by government subsidies in the form of loans, that gives the government a lot of incentive and power over the way academia runs itself. If we look at what is going on with the for-profit schools, it is hard not to see that as the possibility of our own future. At that could be in our near future (the President seems down for expanding it, and as much as Republicans hate regulation, they may just hate universities more).

    Also, on a rather technical note: is it a bubble? Doesn’t a bubble require some level of speculative investment?

  2. Ah, but there is speculative investment: the private companies are investing in scores of undergraduates to pay them back later. Now, that’s been a free-be since the government secures many of those loans, but the effect of rampant default would … well, not be good for the Banks, but somehow even that will be turned into a win for them.

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