Monday, October 22, 2012

Student debt

From an article at
The average amount of debt for 2011 graduates at Indiana’s public, four-year colleges rose to $27,500.
 If that is the average, there must be some with very big numbers because there are certainly many with no debt at all. The article has no information about debt of graduates from private colleges.

The piece contains this idiotic statement:
“In these tough times, a college degree is still your best bet for getting a job and decent pay,” Asher said.
There is a difference between correlation an causation. Most highly motivated and highly intelligent students go to college, while most students with little motivation and little intellectual ability do not. The differences in outcomes between those with college certification and those without may mostly reflect these a-priori differences, not value added from college.

College is a very good decision for some people but it is a very bad decision for others. If those who will not benefit from college not only go to college but rack up huge debt in the process, college can be something that will ruin their lives. One of the unseemly aspects of college admissions is that in the quest to fill seats, many colleges make little or no effort to separate those who will benefit from those who should be pursuing other options. Rather they spout nonsense like the statement of Mr. Asher. Many faculty are aware of the problem, but because their livlihood depends on admissions, they try their best to ignore it.

One of the benefits of being a retired academic is that I am no longer part of this system.

Thursday, October 11, 2012

An effective political ad

Bank failure and the financial crisis

From a book review on the financial crisis:

•When the FDIC took over Washington Mutual, it paid uninsured depositors in full using money that would have gone to bondholders. Writes Mr. Allison: "This was in complete contradiction to past practice. The bondholders suddenly realized that there is no rule of law when government regulators are involved…The decision to treat WaMu bondholders this way closed the capital markets for banks."

Another review here.