The Occupy Wall Street movement (and the other locations being occupied) seems to have escalated in terms of protesters v law enforcement clashes. As I said a few days ago, I do not take this lightly even if I do not fully understand where they are coming. You don't need these protests to know that some aspects of our financial and economic system appear to have changed and may not be "working."
The reason I hedge in that last sentence is that we are still in the middle of the event. I believe this event will turn out to be very historically significant but if we are still in the midst then we probably do not fully understand the context of the event. As bad as the OWS movement thinks it is, maybe when we look back on this in 2020 or 2025 we will conclude it was worse than we thought or hopefully we'll think it was not as bad as it seemed.
As I also said in my other post on this, the OWS movement is trying to ask some difficult or uncomfortable questions. Actually I think they are still trying to figure out what they really want to ask--still trying to find their voice.
One of the ideas emanating from OWS seems to be that they (here we're talking about the younger protesters) did what they were "supposed to," they went to college but incurred a lot of debt and now cannot find work that gives them a chance to pay off that debt.
One of the retorts to this aspect of the protest is to criticize them for majoring in medieval folklore (a little humor is ok) and expecting that major to have any value in the job market. Early on in my college career someone wisely told me that there are only three undergrad majors; accounting, engineering and everything else which I took to mean that companies don't hire your major (except for those two), they hire you. Someone else told me that unless you go to Harvard, Yale or Stanford it doesn't matter where you go.
With that in mind I went to San Diego State, got a BA in econ and graduated with $3000 in student loans that had a minimum payment of $100 per quarter. When I was college age I was interested in having as little student debt as possible as I knew I would have to pay it off. Hence I chose a school that cost me $300 for my first semester. Has the thing about majors and schools changed? Were they never actually true? There are relatively cheaper ways to get through school like going to a community college for the first two years.
The logical reply to my comment about companies hiring you not your major is that there are fewer jobs available coming out of school. While that might be true in the traditional sense I believe the internet is a great tool for people looking to make their own way. I don't mean on a Zuckerbergian scale but more modestly. As an example, go look at some of the younger contributors on Seeking Alpha. There are quite a few guys right out of college producing content and making some money. I doubt there are too many 24 year olds making $10,000 a month with their blogging but someone who writes prolifically might make $1500 and if they can't find a "real" job then maybe they have a not so good job for now while they are young and putting their time in to try to become successful.
This sort of combo of starting out on your own with what you want to do/shit job has a low barrier to entry. There is nothing wrong with this sort of sacrifice in pursuit of what you want to do. I've disclosed previously that before this part of my (internet based) career took off I took side work around here like putting on a roof, doing logging, and building a rock wall. We needed the money and I was (and still am) too cheap to raid our savings.
I realize there is a lot to be down on right now in our country but I believe that there is ample opportunity for those who can really apply themselves. Maybe many of the OWS protesters are doing this but not talking about it much as it might be bad for business, I mean protesting.
Some things do need to change and I am glad these people are asking some questions but their "list of demands" will probably need to evolve some to make the movement more practical and relevant.
This post was longer than I thought it would be but this could be important and might help the country light a fire under its ass if the right questions get asked in a productive manner.
Wikinvest Wire
16 comments:
Like you I majored in Econ at a public U. When my daughter was in high school her guidance counselor advised that she was limiting her college apps and gave us a list of expensive private schools to consider for studying fashion-this without any discussion of our middle class finances or her likely job prospects. Unlike others, we skipped this guidance and she graduated from a public university with no debt. This year she was free to work (admittedly 3 jobs) and live in Europe for a year while many friends live at home working bad jobs-not entry careers-so they could chip away at enormous debt. We challenged the "system" at our high school but others trusted the professionals and were burned.
Now funding for public universities is being slashed in states across the country. Lots of random reasons why #ows evolves.
"One of the ideas emanating from OWS seems to be that they (here we're talking about the younger protesters) did what they were "supposed to," they went to college but incurred a lot of debt and now cannot find work that gives them a chance to pay off that debt."
I think that this is the real ticking time bomb. College costs are absurd. As a lawyer, (and father of teens) I am often asked by parents to meet with their "future lawyers" planning their college and law school careers.
I don't like those meetings because I don't like to throw cold water on dreams. But I generally say this: if you have to borrow more than say $25K for college and law school, you can't afford it.
Student loan debt is like taking on margin debt investing in stocks. If it works out for you...great. It can be fantastic. If it doesn't work out well...it can be a disaster. Unfortunately, since the debt is nondischargable, it will be life changing.
It's hard to me to judge that. I'm all for no debt, but to look at your example...
Law school is at least 2 years, right? So $25k total debt is about $4k per year for 6 years.
Assume you pay cash for half of it, that's $8k total for tuition, fees, room, board per year. That's not much. I freely admit that by the time my kids get to school, I probably won't have the $100k per child to put them through 4 years of state schoolusing projected costs). I'm not touching my retirement money to put kids through school.
Roger,
The job situation today reminds me of the 1970-71 time period when I was finishing Grad school with a PhD in Chemistry. In the 1960s my school used to have about 100 companies show up to give job interviews. By the time I was graduating we were down to three companies interviewing for jobs in the sciences. I was "lucky" in that I had a choice to move to Rochester NY or Lubbock Texas. Neither one of them was a location I had dreamed about after spending 4 years in beautiful Oregon. BUT I did what I had to do and took a job I really didn't want. Things may even be worse today but the same rules apply. You keep trying and you do what you have to do.
I find it outrageous when folks attend over-priced private or out of state castles for college and then bitch about the cost.There are plenty of educational options to obtain a meaningful education.
I was the first of my family to attend college. No silver spoon for me. My wife, ditto. Our kids all attended good public in-state universities (well almost, one graduated from the USCG Academy in New London, CT).
With the exception of those who live in a crappy public school district, I can think of no reason to hitch up to outrageously priced private or out-of-state
schools.
If there were the excellent menu of on-line degree programs that are offered today back in the day, I probably would have chosen that route to save money.
Those hundreds of millions of dollars we pay for granite, luxury workstations, football stadiums, other folk's scholarships and useless politically correct degree programs (to say nothing of administrative overhead and princely pensions)makes the largesse of Wall Street seem paltry in comparison.
Let's picket $475,000 school superintendents or $250,000 latino studies profs instead.
T
What?
Engineering is one of the majors you mention and then you leave MIT off the list? Trust me I made sure my degree came from MIT and the education was excellent.
We need more indebted students! We need more college prof pulling down $250k for educating people in medieval Folklore degrees!
We also need to triple the pay of grade school baby sitters! Sorry, I meant teachers.
How long will it take the USA to figure out Asia is going to leave us in the dust while we overpay for worthless education from kindergarten to PHD.
The media loves a good protest. Seriously, would you want to hire the OWS crowd.
Our country has gotten soft. People need to take responsibility for their owm decisions. $140,000 college debt for a Philosophy degree? Sorry student, that one is on you and maybe your parents.
Funny how this post initiated talking about education. I don't think all of the protesters are young. I don't think you get better than 70% support in polls by whining about lack of post college opportunities. What is being protested is a country run by a group of people that are picked by the elite, financed by the elite, and legislate for the elite. Everyone in this country had 30K of liability put up by the pols to save Hank Paulson's retirement. Bailing out the banks meant we are following the Japanese playbook and everyone will suffer through decades of subpar growth (and job markets) to save the few. The last time the country's wealth was in so few hands (as it is today) was in the late 1800s. In the late 1800s, things turned violent. It will be interesting to see if history repeats itself.
I graduated in 1975 in engineering from a top private school with no debt, and had one offer, which I accepted. Most of my fellow students also had no debt. But I paid 30% of my college by working summers at minimum wage. Can't do that now.
On the flip side, engineering majors went into engineering, business majors did business, and medieval majors did everything else - personnel, purchasing, marketing... Now, you need degrees in Human Resources, Supply Chain Mgt, or Marketing, and the medieval guys are left out.
Rich
To Anon 4:13
Sounds like a new movement should be started: OSE Occupy Secondary Education. I'm in.
Paying for tenure, bloated pensions, and really cool buildings.
Lets hear it for degrees in Music Theory, Social Work, Philosphy and Communications.
Roger - I am not sure if you saw this article but i would love to see your take. It is on OWS thoughts and written by Tom Armistead.
His points which I like:
Like a tenacious Octopus, Financialism has reached its tentacles into every nook and cranny of the economy, and subtly insinuated its ideology into our very understanding of how the system works.
A very good start could be made by enacting the following, unambiguously and with finality:
Regulate CDS as insurance, with a requirement of insurable interest for the buyer, and adequate capital for the seller.
Reinstate Glass-Steagall
Apply a Transaction Tax, sufficient to deter HFT
Impose Position Limits, both individual and collective, sufficient to maintain to volume of commodities futures trades in some meaningful relationship with the amount of the actual commodity in circulation or production.
Outlaw synthetic securities
Restrict MBS and other securitizations to simple structures, with wide tranches.
Extend the statute of limitations for securities fraud and misrepresentation in the Securities and Securities Exchange Acts to seven years.
Impose obligations on market makers and liquidity providers sufficient to compensate for the privileges and exemptions they receive.
Develop international standards for regulation, strong enough to end regulatory arbitrage.
5:17,
A few thoughts on the comments you posted;
There is no doubt that financialism (great word) has caused tremendous damage that we do not yet fully understand. This dominoed over the last 10 or 15 years from loosening of various things along the way and market conditions.
I do not have the answers for what we should do.
The financialism was build upon a wildly flawed (as it turned out) structure. A long list of regulations like the ones you list below will also affect people it is not intended to affect--this is my belief based on market related things I have observed in my time.
The other concern is that because we got here because of a perverse structure that we collectively did not understand, I can't imagine that we would have any real shot of understanding the consequence of a list like Tom's in real time, we would only understand after the fact.
I have no solution.
anon 5:17
except for Glass-Steagall which has been proven to work
you are a central planner fron old school Russia which has been proven not to work
:)
This is ridiculous. My son is a math major at the University of Washington and, as an out of state student, it costs us over $35,000 per year. We are in the fortunate position of being able to afford that but most people simply cannot. You are a fool if you think that a social work or philosophy, or some other humanities degree is contemptible, or somehow lacks value. Just ask Google and other innovators about the value they place on young people who have critical thinking skills, and understand history, language, and international cultures and -God forbid- even possess some decent writing skills. They need such employee! Are you people really suggesting that young people today should enroll in some second rate on-line university and then blog for a living!? Get real.
Calvin and Hobbes explain OWS decades before the fact at http://tinyurl.com/3f6x6dc
to anon 10:55
Secondary Education is a business decision. Your son has made a choice for 35k per year paid by you. The same degree in all likelihood would cost less (maybe significantly so) if he chose an in state school or a JC. Society does not own your son a job upon graduation by the virtue that you spent 35K per year for out of state tuition.
Parents of children need to get real with their kids when talking about their future, and what type of major they are selecting. In all probability a degree in socialogy at 35K per year will not give you the same economic return as an engineering degree at the same price.
Should one go into significant life changing debt without an economic payoff?
Buyer beware.
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