Monday, May 21, 2012

60 Minutes Interview with Peter Thiel

Here's the full "60 Minutes" segment from last night's show featuring Peter Thiel.

(CBS News) "One of the wealthiest, best-educated American entrepreneurs, Peter Thiel, isn't convinced college is worth the cost. With only half of recent U.S. college graduates in full-time jobs, and student loans now at $1 trillion, Thiel has come up with his own small-scale solution: pay a couple dozen of the nation's most promising students $100,000 to walk away from college and pursue their passions. Morley Safer takes a look at Thiel's critique of college."

15 Comments:

At 5/21/2012 3:45 PM, Blogger AIG said...

Does Peter Thiel know if the person who designed the keyboard on which people type their PayPal account #s...learned their knowledge of the thermal properties of plastic molding...in college?

 
At 5/22/2012 1:15 AM, Blogger kmg said...

The flaws in what Thiel's critics say are :

1) After the Thiel fellowship, a student who wants to return to college can do so. He also has the highly selective Thiel fellowship on his resume.

2) Vivek Wadhwa, who is a stunningly disingenuous dullard (whining about why policies are needed to make sure 50% of tech startups are started by women), is assuming that Thiel is anti-education. He is not. Thiel, rather, is saying that colleges are not the most efficient way to deliver education.

Wadhwa is a liar and a phony.

 
At 5/22/2012 1:20 AM, Blogger juandos said...

I wonder what kind of soaking Thiel on Friday?

 
At 5/22/2012 3:49 AM, OpenID Sprewell said...

Let's see, as the first investor in Facebook, he bought a 10% stake for $500k in 2004, when it was still a small, unknown website popular on college campuses. That investment was valued at $2.5 billion four months ago, in the above link, meaning he made back his initial investment 5000 times. I don't think he's too worried about it dropping to just 4500 times his initial investment. ;) That said, Facebook cannot possibly live up to its current highly inflated price and he would be wise to sell the entire stake now.

 
At 5/22/2012 6:47 AM, Blogger Methinks said...

Wow. Thank you for posting that. 60 Minutes is as annoying as it was when I stopped watching it.

Too many kids are going to college and not learning one damn valuable thing. They putter around for four years, going to frat parties and taking novelty classes. Even back when I was in college we had a degree called "general studies". What the hell is that?

I needed a degree in finance or economics for the job I wanted on Wall Street (I covered my behind by getting both). There's no question that I learned things I couldn't have learned on my own at that age and there's no question that at least half of my real education happened "on the job". The combination of the two led to the innovations that allowed me to start my own firm. What I spent on my expensive education (and I paid for 100% of it with no parental help) was worth it millions of times over.

There's a case to be made for engineering, the sciences, economics and finance. There's just no case for going deeply into debt to obtain undergraduate degrees in area studies. In fact, given the glut of humanities and social science Ph.D.'s, there's not much of a case for going into debt to seek any degrees in those areas.

When I get an applicant whose major was "general studies", what does that tell me about him? It tells me he wasted his time and money for four years.

 
At 5/22/2012 7:16 AM, Blogger juandos said...

Alrighty sprewell thanks for the info...

I had read about his 'loan/stock conversion' regarding FaceBook and wasn't sure if had lost much of his $2.5 billion you indicated that is/was his piece of the company's supposed value...

Still didn't Friday's IPO flop devalue his holdings at least on paper by some $275 million?

 
At 5/22/2012 9:01 AM, Blogger juandos said...

Well apparently FaceBook isn't done taking it in the shorts...

 
At 5/22/2012 10:27 AM, Blogger AIG said...

What I spent on my expensive education (and I paid for 100% of it with no parental help) was worth it millions of times over.

That can't possibly be true, because Peter Thiel said college is useless. Because Peter Thiel created PayPal...you know...using computers build by a computer engineer, and code developed by a software engineer. But never-mind that!

There's a case to be made for engineering, the sciences, economics and finance.
Methinks, 50% of US college students study in the above fields you mention. So I don't understand why people focus on some extreme example "like general studies majors", which probably represent about 0.01% of total college students, but somehow seem to think that engineering and science and medicine and business majors are...the "outliers"?

Well, anything to support our vision of reality.

There's just no case for going deeply into debt to obtain undergraduate degrees in area studies.
Almost no one does. If the average debt load of the average college graduate is about 25k, how much do you think it is for the average "general studies" student from the average state college? Most likely nothing, since most likely that person was a trust-funder (most of the people I have met who engaged in useless activities, were the ones whose parents could afford to pay for them to do useless things)

In fact, given the glut of humanities and social science Ph.D.'s, there's not much of a case for going into debt to seek any degrees in those areas.
That's their decision to make, not yours or mine. In Soviet Russia ;), the government decided what you were going to study. The government decided how many engineers it needed, how many psychologists, how many artists etc etc. The result? 10 times more engineers in the Soviet Union than the US...and the best they could build was a 40 year old copy of a Fiat.

People don't pick the fields they want to go into JUST on economic considerations. It's not as if the choice that people are facing is either go to engineering school, or become a plumber. Maybe they want to paint, and they don't care if they have to be poor while doing it.

Who am I to say whether that is right or not? All I can say, is tell the government not to use my money to subsidize it...which means the prices need to go a LOT HIGHER in order to more accurately reflect the cost of delivering that education to that kid who wants to do it.

But it is an entirely different argument to say that gov. subsidized loans are out of control...like everything in government. And quite a different thing to talk about universities themselves, or the value they create, or the choices people make.

But since we like to turn everything into political points, you have people who come out and say "since government subsidizes corn, we have determined that corn is useless!"

It's like that scene from The Life of Brian...what have the Romans ever done for us?!

 
At 5/22/2012 11:24 AM, Blogger Methinks said...

There's no need to sensationalize, AIG. Thiel never said college is worthless, he said it's overrated.

The only person claiming they're outliers is you, AIG. But for whatever percentage study humanities and most social sciences, it's usually not worth going in to debt to do it. And I don't know what the numbers are for Americans taking up the study of any of those fields, but I doubt they are the majority in those classes.

Reading your entire post (which I didn't do before I started responding), I realize that (as you so often do), you have missed the point entirely.

Nobody is advocating for control of what people study. But, the myth that all education is essential and worth the debt is one that needs to be busted. It is clear that encouraging people to go to college, regardless of what they study, there is a mistake. It's also probably not such a bright idea to prod all 18-year olds to dive directly into college.

 
At 5/22/2012 1:04 PM, Blogger AIG said...

There's no need to sensationalize, AIG. Thiel never said college is worthless, he said it's overrated.
There's no such thing as "college". Saying "college is overrated " is like saying "a job is overrated, since there is so much unemployment"

The only person claiming they're outliers is you, AIG. But for whatever percentage study humanities and most social sciences, it's usually not worth going in to debt to do it.
You were talking about "general study" majors. Those are outliers. Humanities and social sciences encompass a very large number of things, including, by some people's opinions, economics.

And I don't know what the numbers are for Americans taking up the study of any of those fields, but I doubt they are the majority in those classes.
Are you talking about "Americans"? Well, that is irrelevant, but of course they are the majority, since 50% of college students are in those fields.

So if 50% are in the fields which you yourself say are "worth it" and one can make a case for them being a profitable investment...that looks like a normal distribution to me.

I would make the argument that there are large majority of "humanities and social sciences" which do pay off. They don't pay off as well, economically, as some others, but they pay off in some other quality which the student values more.

As long as I'm not paying for it, I don't care what they study.

But, the myth that all education is essential and worth the debt is one that needs to be busted.
No one makes this argument. The only ones who talk about this "myth' are people who have already determined it to be a "myth"

How is it that you think that millions of people every year have make absolutely irrational decisions, year in and year out...and that they would continue to do so were it not for Peter Thiel to "bust this myth"?


If people behaved that way, why are 50% of the students going for fields which even you agree are worth the investment? Why are only 0.01% enrolled in glass blowing? I want to study glass blowing too, instead of engineering.

It is clear that encouraging people to go to college, regardless of what they study, there is a mistake.
But that doesn't describe reality. It doesn't describe the way people go to college.

The only "myth" here, is this.

It's also probably not such a bright idea to prod all 18-year olds to dive directly into college.
No one does. They CHOSE to do so.

 
At 5/22/2012 1:11 PM, Blogger AIG said...

Reading your entire post (which I didn't do before I started responding), I realize that (as you so often do), you have missed the point entirely.

No I get the point quite well. The "Libertarian" version of the Luddites want to make a political statement. This statement reads: "Since gov. subsidizes corn, we have decided that we shall no longer eat corn!"

The argument being made is confusing the fact that gov. does in fact subsidize and reduce the cost of tuition for the students, thus creating...mal-investment in certain fields...with the argument that "college is overrated", or useless or whatever else they have said in the course of the past 40 years (since they have been saying this since the 1970s).

These 2 are totally separate arguments. Gov. may increase the production of corn, but it doesn't mean that corn is uneatable.

 
At 5/22/2012 1:42 PM, Blogger Ken said...

AIG,

Does Peter Thiel know if the person who designed the keyboard on which people type their PayPal account #s...learned their knowledge of the thermal properties of plastic molding...in college?

Do you?

 
At 5/22/2012 1:48 PM, Blogger Ken said...

AIG,

because Peter Thiel said college is useless

This is a patent lie.

how much do you think it is for the average "general studies" student from the average state college? Most likely nothing, since most likely that person was a trust-funder

Evidence?

Saying "college is overrated " is like saying "a job is overrated, since there is so much unemployment"

Having a job is overrated.

"Since gov. subsidizes corn, we have decided that we shall no longer eat corn!"

Wrong. Government subsidization of corn forces those who don't want to consume corn to subsidize those who do. Additionally, the subsidization introduces all sorts of market distortions and inefficiencies that are bad. Thus the government should stop subsidizing corn.

 
At 5/22/2012 2:55 PM, Blogger AIG said...

Do you?
Yes I do

Evidence?
Experience

Having a job is overrated.
Thank you for making my point

Wrong. Government subsidization of corn forces those who don't want to consume corn to subsidize those who do. Additionally, the subsidization introduces all sorts of market distortions and inefficiencies that are bad. Thus the government should stop subsidizing corn.
I should have known that sarcasm may have been too complicated for some people. I'll take note for next time.

 
At 6/14/2012 11:39 AM, OpenID Bob said...

So what kind of stake is Thiel getting in the inventions of Thiel Fellows?

Has anyone else wondered whether all of this talk about the waste of education and the education bubble (without providing a single, verifiable prediction) is just part of his approach to venture investing? This gives him a stake and first-refusal in some hand-chosen inventions and business plans. Isn't this all just an investment tactic more than some kind of bold prognostication about the future?

 

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