Saturday, May 19, 2012

Peter Thiel on 60 Minutes: $1 Trillion in Student Debt is $1 Trillion in Lies About Higher Education


(CBS News) -- "A billionaire's program to pay students with promising ideas to drop out of college and develop those concepts for the good of all is attracting students and critics. Internet business pioneer Peter Thiel thinks his program is a viable alternative to what he sees as a largely ineffective university system where costs far outweigh benefits.  Morley Safer takes a look at the controversial program and the increasingly expensive university system that helped spawn it on 60 Minutes, this Sunday May 20 at 7:00 p.m. ET (watch preview above)

"We have a bubble in education, like we had a bubble in housing...everybody believed you had to have a house, they'd pay whatever it took," says Thiel. "Today, everybody believes that we need to go to college, and people will pay-- whatever it takes." And that's way too much these days says Thiel, when people without a degree can make as much as those with an advanced one. 

"There are all sorts of vocational careers that pay extremely well today, so the average plumber makes as much as the average doctor," Thiel tells Safer. At a time when only half of recent college grads are employed full-time and tuition has quadrupled over the past 30 years, Thiel believes the system is broken and its promises are hollow. "I did not realize how screwed up the education system is. We now have $1 trillion in student debt in the U.S. Cynically, you can say it's paid for $1 trillion of lies about how good education is," Thiel says. 

44 Comments:

At 5/19/2012 11:54 AM, Blogger AIG said...

"Today, everybody believes that we need to go to college, and people will pay-- whatever it takes."
That is, demonstrably false. Why does he think people flock by the tens of thousands to cheap state universities, and even more so to community colleges.

Peter Thiel speaks as if he's never heard of the fact that there are different universities and schools in the US.

so the average plumber makes as much as the average doctor
Average salary of plumber: $47,000
Average salary for family physician: $144,000

and tuition has quadrupled over the past 30 years
That is an obviously misleading figure, and doesn't address as to what the real cost of any of this education really is. A lot of things have quadrupled in the past 30 years. WHO does Peter Thiel think build the computers and the machinery and the materials that revolutionized the world in the past 30 years? High school graduates? So if the benefits that a growing number of graduates generate, and see, increases considerably, shouldn't the price to get those benefits go up as well?

A billionaire's program to pay students with promising ideas to drop out of college and develop those concepts for the good of all is attracting students and critics

Really Peter? Well maybe that model may work in computer programming...but how do you plan to teach someone thermodynamics before they go and start building a car? Something like a...I don't know...class?

-----------
You know, here Mark posts dozens of articles every day on how manufacturing is growing and leading in the US. And I agree. But it is doing so on the high-tech end, ie the US develops the technologies, the machinery and the processes that eliminate labor and make US manufacturing highly competitive.

HOW, does Peter Thiel, or Mark Perry for that matter, think those high-tech skills in designing machinery and processes and materials and processors etc etc are developed? Does one just...drop out of college and develop a robotic milling machine? Cause if you can do that without learning about materials first, I'd like to know how :)

This is some serious misconceptions of what universities are and what they do, or how people behave.

 
At 5/19/2012 12:12 PM, Blogger Info Source said...

An average plumber may only make $47,000 a year. Being average shouldn't be anyone's goal. A plumber that has experience and takes the time to learn more than the "average" plumber can easily make over over 100k.

 
At 5/19/2012 12:23 PM, Blogger Aiken_Bob said...

Most of the folks that post here have technical degrees, or so it seems. I think the purpose of the articles is how to soft degrees have been pushed that have little of NO marketable skills. The so-called ethnic/gender studies have little value in the market place.

 
At 5/19/2012 12:53 PM, Blogger Larry G said...

there IS an education path to jobs.

there is no one-to-one path between any education and A job any more.

Plenty of foreign students come to the US to get excellent and valuable degrees that translate into real jobs.

but those folks are pretty focused on specific goals

whereas many of the US students are basically trying to meet minimum thresholds..like on SATs to get into their 1st choice school - without any real idea of what they are after in terms of a specific degree and beyond that what that degree means in terms of real job prospects.

So a gal with a degree in Comp Science at MIT is going to be worth something in the job market but a guy with a degree in anthropology from Ga Tech is likely to have rough sledding - even rougher if they have accumulated 50K in debt en-route.

You do NOT have to go into debt up to your eyeballs but if you insist on it, at least make sure you do it for a degree in a field for which there is high demand for.

and you can be a plumber..who ends up owning and running his/her own business even better if you have an MBA - even from 2yrs at a community college and 2more years at an obscure college.

but you cannot become a Heart Surgeon or a Professional Engineer who designs highway bridges or a Corporate Lawyer by dropping out of school and watching video lectures.

 
At 5/19/2012 2:02 PM, Blogger AIG said...

An average plumber may only make $47,000 a year. Being average shouldn't be anyone's goal. A plumber that has experience and takes the time to learn more than the "average" plumber can easily make over over 100k.
Oh, so when the "average" doesn't fit our case, then we say "don't focus on averages". So which is it? On one side we want to average out all university programs , in all fields, in all places, into one...and on the other hand we want to say "but the top plumber makes more than the average university graduate!" Well the top prostitute makes more than the top plumber, actually!

Most of the folks that post here have technical degrees, or so it seems. I think the purpose of the articles is how to soft degrees have been pushed that have little of NO marketable skills. The so-called ethnic/gender studies have little value in the market place.
Absolutely, and I agree. The problem is that most people, like Peter Thiel, or most people here, either accidentally or deliberately like to group very different types of fields and degrees and universities into this mythical thing called "college".

Doing so is about as meaningful as aggregating all jobs in the economy into one, and calling it "a job". Well, obviously a job isn't the same as every other job.

Let's face it, most people who are going into the soft fields, as you say, are doing so in 5k-7k a year state schools, and incurring very low tuition costs. They're not doing so at 40k/year MIT. And we need to recognize that individual degree programs at individual schools, are targeted towards different people and have very little in common other than the "name" of higher education.

However, I suspect some "deliberate" misinformation for the purposes of a political agenda ;) Just my suspicion.

but those folks are pretty focused on specific goals
Specialization is the defining characteristic of today's economy (and has been for decades). Yet somehow people in these discussions (and by people, I mean the "libertarian" versions of the Luddites) take things that are highly specialized, and aggregate them to get...absolutely nothing of value.

whereas many of the US students are basically trying to meet minimum thresholds..like on SATs to get into their 1st choice school - without any real idea of what they are after in terms of a specific degree and beyond that what that degree means in terms of real job prospects.
That's not true. US students behave exactly the same as students everywhere else in the wold...and by that I mean they behave in their self interest based on their capabilities. US students that focus on getting the highest SAT scores etc, you can rest assured, know very well what they are going to do. (those foreign students have to take the SAT too, BTW)

 
At 5/19/2012 2:03 PM, Blogger AIG said...

So a gal with a degree in Comp Science at MIT is going to be worth something in the job market but a guy with a degree in anthropology from Ga Tech is likely to have rough sledding - even rougher if they have accumulated 50K in debt en-route.
a) Georgia Tech, I'm pretty sure, doesn't have anthropology as a major ;)
b) If you graduated from Georgia tech, even if you tried extremely hard, you'd never have 50k in debt, because 4 years at Georgia tech don't even cost anywhere near 50k...whereas 1 year at MIT, just might.
c) Most people graduating from Georgia Tech graduate in engineering and sciences...and make very good salaries as a result, and have no problem paying back the exceptionally TINY tuition costs of Georgia Tech.
d) So then why exactly are people aggregating Georgia Tech (one of the best schools in the nation ,actually) with MIT? Is the "college" at MIT equivalent to the "college" somewhere else?

Pieter Thiel seems to think "college" is useless. I wonder who designed and build the computers that made Pieter Thiel so rich?

but you cannot become a Heart Surgeon or a Professional Engineer who designs highway bridges or a Corporate Lawyer by dropping out of school and watching video lectures.
I agree with you there. Pieter Thiel, and a lot of people here, however, seem to think you can :)

 
At 5/19/2012 2:09 PM, Blogger Larry G said...

" US students behave exactly the same as students everywhere else in the wold...and by that I mean they behave in their self interest based on their capabilities. US students that focus on getting the highest SAT scores etc, you can rest assured, know very well what they are going to do. (those foreign students have to take the SAT too, BTW) "

Both US and Foreign students know that the SAT is required for them to get into the school but many US students are not as sure after that what they are after whereas many foreign students know that is a limited opportunity that cannot be squandered.

I say that as "in general" as there are US students that are focused but there also seems to be a ton of US students who end up graduated and without a job and in debt.

I doubt that many foreign students end up that way but I could be wrong.

Getting into ...and through college should have a goal to be achieved beyond checking off that college was finished....

that means that what you actually do in college is progress toward a goal - beyond graduation.

Some kids are totally focused on the whole enchilada...

others are not.

 
At 5/19/2012 2:16 PM, Blogger AIG said...

Georgia Tech is actually a good example of why this concept of "tuition bubble" is very confusing...in that it is very misrepresented.

Saying that tuition prices have gone up 4 times in the past 30 years, means nothing. It doesn't tell us where they started from, it doesn't tell us whether they are moving closer to the real market price etc.

Let's take Georgia Tech as an example. Undergraduate tuition rates at Georgia Tech, for in-state tuition cost around 9k a year. Most students there graduate in engineering and sciences. It is one of the best schools in the country for engineering...and yet it charges only 9k a year for undergraduates who are going to graduate with average starting salaries of 55k.

Does this make sense? Should Georgia Tech not charge 35k a year to provide this service...just as private schools that rank as high do?

Where is the price "bubble" here? This is a grossly under-priced service.

The thing we conveniently like to ignore is that state schools, which provide the largest number of the "soft field" graduates in the country, and which represent the largest increase in university enrollment over the past decades...stubbornly keep their prices TOO LOW (which is what drives the increase in enrollment).

It's not because prices are too high, it's because prices are too low in these institutions. Only recently are we seeing state schools raise tuition to reflect their actual costs a bit more, and somehow this is interpreted as a "bubble". How is it a "bubble" if it is prices moving from an artificially low level, to a more reflective price point?

It doesn't matter if the gov is involved or not. The economics still work the same. There is a price point where something becomes worth it, or not. Moving closer to that price point, is a good thing...and for MOST university programs at state schools, that price point is still a lot higher.

And this is why we see OWS-ers in the streets; they are now FINALLY getting the market signal that they should stop going into some of these soft fields.

 
At 5/19/2012 2:22 PM, Blogger AIG said...

Both US and Foreign students know that the SAT is required for them to get into the school but many US students are not as sure after that what they are after whereas many foreign students know that is a limited opportunity that cannot be squandered.
Having known a lot more foreign students in the US, than US students in the US, I can tell you that foreign students have equally as little of an idea of what they want to do. Foreign students also focus specifically on getting the highest possible SAT score, getting to the best possible school...and then figuring out what to do. Because the 'what to do" at that point isn't as important when all the choices facing you all guarantee very high salaries.

but there also seems to be a ton of US students who end up graduated and without a job and in debt.
Sure. None of those students are the ones you described above. 100% of these students, I can guarantee you, never even broke 1000 on their SAT scores (under the old SAT scoring system, I don't know what the new one is). IE, this is an entirely different population of students.

that means that what you actually do in college is progress toward a goal - beyond graduation.
Anywhere in the world, there are probably no more than 2% of 16-17-18 year olds who have ANY clue on what they want to do when they grow up.

 
At 5/19/2012 2:32 PM, Blogger Larry G said...

" that means that what you actually do in college is progress toward a goal - beyond graduation.
Anywhere in the world, there are probably no more than 2% of 16-17-18 year olds who have ANY clue on what they want to do when they grow up. "

can't do that anymore unless you don't care if you are unemployed and ..in debt...

this is why people are starting to think you can get training certifications and skip the degree all together.

College, of the right kind, can help ensure a decent job but "generic college" is increasingly problematic...

Kids might still not know what they want to do but the consequences of that are tougher now days. It's more important now to have a specific goal. You an always change your mind later and ADD to your education, but to not have a specific goal - is risky business in the current world economy.

If you must "wander".. do it in a hard science - "non-soft" subjects.

 
At 5/19/2012 3:04 PM, Blogger AIG said...

this is why people are starting to think you can get training certifications and skip the degree all together.
But, again, what is this "degree" you're speaking of? Degree in WHAT? There is no such thing as a "degree" in nothing.

This is the problem with this ridiculous "college" oversimplification. Every single program at every single university, is different, and has different rewards. If you make a stupid decision, it is not "college's" fault.

College, of the right kind, can help ensure a decent job but "generic college" is increasingly problematic...
There is no such thing as "generic college" anymore than there is a "generic job". That's the point.

Kids might still not know what they want to do but the consequences of that are tougher now days. It's more important now to have a specific goal. You an always change your mind later and ADD to your education, but to not have a specific goal - is risky business in the current world economy.
No it's not important, or dangerous. And the reasons are simple; most of the kids that go into "soft fields" or in fields that will not necessarily pay back their costs, are in an entirely different population than the kids you described; ie the over-achievers who want the best SAT scores and the best schools. IE, if you can get high SAT scores, and get into high-ranked schools, what you actually study isn't as important to your future success, as getting into those schools in the first place.

And this is something that people miss about universities, here, all the time; universities serve several functions for their ultimate customer, the employer. Not only do they provide an education in a specific field, they also serve as an important SIGNAL-ing mechanism. They serve to stratify and test the future employees...for the employer, without the employer having to do the sorting out themselves. Making it into such a school, is a signal in itself to the employer.

-----------
But there is no such thing as a "generic college". There are many many types of universities, and many many types of degrees in many types of fields. Some are good investments, some are not. Some schools are under-priced...almost NONE are over-priced (because it is very hard to be overpriced in a field where so many are under priced). The amount of value they generate, even if we aggregate them all into one, is clearly huge compared to NOT entering into any of them (by all indicators).

But, even when we recognize that there are a lot of bad investments out there in education, the solution is not to discuss some supposed "price bubble", but rather to recognize that the mal-investment happens because the prices for some places are still kept at artificially low levels, and the best way to reduce the mal-investment is to raise the prices even higher in those places, to more accurately reflect the cost of delivering that education.

This is why the argument of "price inflation" in universities is misleading; it tells us nothing. It doesn't tell us where the price started, it doesn't tell us if it reflects a market price. Is it still too low? Is it now too high? Why should it be lower, or higher? We get none of that information.

But of course, the people making these arguments aren't interested in those questions. They are interested in making a political point, and cherry-picking the info that supports their POV.

But I'd like them to show me where this "price inflation" is at Georgia tech (since you brought up that example). Should Georgia Tech continue to charge 9k for the exact same level of education that I had to pay 35k a year for? And I think 35k a year was a great deal for me. If Georgia tech raises it's tuition from 9k to 35k a year, next year, will the people here call that evidence of a "price bubble"?? Of course they will.

 
At 5/19/2012 4:01 PM, Blogger Larry G said...

" But I'd like them to show me where this "price inflation" is at Georgia tech (since you brought up that example). Should Georgia Tech continue to charge 9k for the exact same level of education that I had to pay 35k a year for? And I think 35k a year was a great deal for me. If Georgia tech raises it's tuition from 9k to 35k a year, next year, will the people here call that evidence of a "price bubble"?? Of course they will. "

I think GT shows that you don't have to pay several times that much to get a college education.

now days, more than a few people do not have 35K a year for college and what this shows is that there are still lower cost options.

You don't have to pay 35K a year nor go into debt up to your eyeballs.

re: "generic" is a degree that even though it qualifies you for a number of different kinds of jobs, the demand for those jobs is "soft" or declining.

All I am saying is that college is costly now days and jobs are harder to come by so pick a college you can afford and pick a degree that is in demand.

 
At 5/19/2012 4:38 PM, Blogger AIG said...

I think GT shows that you don't have to pay several times that much to get a college education.
Ugh. Seriously? GT is subsidized to keep tuition prices at artificially low levels. And her you come saying...well see you don't have to pay 35k for that education.

Way to go.

Well, it's still better than the argument of others here that somehow tuition prices are TOO HIGH. That, at least, is completely false. Yours is just, ignoring the issue.

now days, more than a few people do not have 35K a year for college and what this shows is that there are still lower cost options.
You really don't get it, do you?

You don't have to pay 35K a year nor go into debt up to your eyeballs.
Jesus H Christ. Of course not. You can pass it off to the taxpayers.

re: "generic" is a degree that even though it qualifies you for a number of different kinds of jobs, the demand for those jobs is "soft" or declining.
There is no such thing.

All I am saying is that college is costly now days and jobs are harder to come by so pick a college you can afford and pick a degree that is in demand.
That's quite a bold statement you're making there! ;) And this is different from any other thing, and any other time in human history, how? And what makes you think that people don't behave exactly like this?

 
At 5/19/2012 4:44 PM, Blogger arbitrage789 said...

"The average plumber makes as much as the average doctor".
_________________________

Gotta be true of the plumbers who have come to my house, at least. (And they do it without union pressure on politicians).

 
At 5/19/2012 5:02 PM, Blogger AIG said...

At least what you're saying Larry is more in line with reality than what Peter Thiel (and most people here) are saying.

But your complaint is that there is "mal-investment"; ie the person making the decision on where to invest their time and money on an education, is making the wrong choice a lot of times.

And that's what I addressed as well. And the reason for this, is specifically the LOW cost that the student incurs. The cost is kept artificially low, and that moves what is really a bad investment decision, into the realm of a "good one".

The best way to prevent this from happening, is not to keep passing the cost on to the tax-payer, instead of the student, but rather to make the cost incurred by the student be more in line with the actual cost of acquiring the education.

-----

Now you're going to say, but GT still can offer what YOU consider to be a good investment, eg an engineering degree, for only 9k instead of 35k, even though the 35k more accrual depicts the market price for that education.

But you STILL get mal-investment, even in that case. You get a lot more people going into engineering, then the market wants to. And that leads to lower starting salaries for engineers, both for GT graduates, and for me.

That's why starting salaries for a lot of the "soft fields" are so low; market saturation because over time, too many people entered those fields due to the LOW COST of getting that education.

The same happens in every field, even engineering. GT is a bad example, but there are hundreds of state universities churning out engineering grads, sometimes of very poor quality, at very low prices. All that does is reduce the starting salaries for me and the GT grad, on top of increasing YOUR taxes.

What you end up with, is Europe, where higher education is free, and the end result is armies of extremely poor-quality grads. All the good quality ones, high-tail it off to the US.

 
At 5/19/2012 5:05 PM, Blogger Larry G said...

" That's quite a bold statement you're making there! ;) And this is different from any other thing, and any other time in human history, how? And what makes you think that people don't behave exactly like this? "

yes it is different.

the level of debt from college is very high compared to prior years and the number of college graduates who cannot find work is also high compared to prior years so people do need to act differently if they want a job and keep from being deep in debt.

Here's a tool to find affordable college by the way:

http://collegecost.ed.gov/catc/

Community College is also a less expensive way to get the first 2 years and even get a job.

Our local Community College will pretty much get you a guaranteed nursing or similar job in 2 years for about 7K total tuition and that's near the average for most public 2 year colleges.

again my point is that it tougher to get a job these days and that although many places are expensive, there are far less expensive alternatives.

 
At 5/19/2012 5:13 PM, Blogger Larry G said...

" The cost is kept artificially low, and that moves what is really a bad investment decision, into the realm of a "good one".

The best way to prevent this from happening, is not to keep passing the cost on to the tax-payer, instead of the student, but rather to make the cost incurred by the student be more in line with the actual cost of acquiring the education. "

well, I sort of see your point but the truth is that.....
Many colleges are VERY EXPENSIVE now days EVEN WITH Taxpayer subsidies and many kids are taking on 20, 30, 40K worth of debt to pay for it.

How else would we explain the higher and higher levels of student debt?

While I support your assertion about state-supported 4 year institutions, I have a lot less problem with Community Colleges that are,in general, much leaner operations and can provide paths to job opportunities in 2 years that will then allow people to hold jobs while they continue to work towards their 4 year degrees.

 
At 5/19/2012 5:33 PM, Blogger Ken said...

AIG,

Does one just...drop out of college and develop a robotic milling machine?

Seriously? The most successful techies of our times are college dropouts. Ever heard of Bill Gates, Michael Dell, Steve Jobs, Mark Zuckerberg?

Oh, so when the "average" doesn't fit our case, then we say "don't focus on averages".

No, but many of the people getting suckered going into college have the potential to be average professionals, or above average blue collar workers. Why go to school to be average or below average, then end up in an average to below average ranges of professional jobs (and be incredibly unhappy because you see no career advancement), when you can skip school and be above average carpenter, electrician, plumber, etc?

Comparing the average salary of a doctor to the average salary of a plumber is stupid. If you're smart enough and driven enough to be an average doctor, you are smart enough and driven enough to be in the top 5-1% of plumbers. The type of people who would only be an average plumber, probably couldn't even graduate a bachelor's, much less get an MD.

 
At 5/19/2012 7:34 PM, Blogger Mark J. Perry said...

Out-of-state tuition at Georgia Tech is about $30,000, plus another $6,000 for housing and another $3,500 for food, and you're up to about $40,000 per year and $120,000 for four years. I predict out-of-state students are easily graduating from GA Tech with the average $25,000 in student loan debt, because they are paying the real, "full" price.

The $9,0000 for in-state tuition is an artificially low price due to taxpayer subsidies, and doesn't include room and board. So while it might seem "cheap," that is only because the GA and federal governments are forcing other taxpayers to subsidize you and/or your children's "cheap" tuition.

The fact that the price is artificially low for in-state tuition is part of the problem: it encourages too many students to go to college, and even without a lot debt, they still may have trouble finding a job.

 
At 5/19/2012 7:45 PM, Blogger AIG said...

the level of debt from college is very high compared to prior years
The level of debt from college is relatively low. The average is about 25k. Why should it be lower? It clearly needs to be higher, since it is not changing behavior enough to prevent mal-investment.

so people do need to act differently if they want a job and keep from being deep in debt
Absolutely people need to act differently, and they are.

Many colleges are VERY EXPENSIVE now days EVEN WITH Taxpayer subsidies and many kids are taking on 20, 30, 40K worth of debt to pay for it.
It obviously needs to be more.

How else would we explain the higher and higher levels of student debt?
It's self explanatory. A higher cost for the level of education is not necessarily a bad thing, if it brings the cost more in line with what it actually takes to provide that level of education.

 
At 5/19/2012 7:47 PM, Blogger AIG said...

Seriously? The most successful techies of our times are college dropouts. Ever heard of Bill Gates, Michael Dell, Steve Jobs, Mark Zuckerberg?
Have you ever heard of the bum outside my apartment begging for food? No? Strange. He was a college drop-out too. Hmm...

No, but many of the people getting suckered going into college have the potential to be average professionals, or above average blue collar workers. Why go to school to be average or below average, then end up in an average to below average ranges of professional jobs (and be incredibly unhappy because you see no career advancement), when you can skip school and be above average carpenter, electrician, plumber, etc?
That made very little sense.

Comparing the average salary of a doctor to the average salary of a plumber is stupid
Someone ought to tell that to Peter Thiel. He seems to think they are comparable :)

 
At 5/19/2012 7:56 PM, Blogger AIG said...

Out-of-state tuition at Georgia Tech is about $30,000, plus another $6,000 for housing and another $3,500 for food, and you're up to about $40,000 per year and $120,000 for four years. I predict out-of-state students are easily graduating from GA Tech with the average $25,000 in student loan debt, because they are paying the real, "full" price.

No need to include room and food here, since every other school would also be increased by that much if you include these costs; ie 40k at MIT also doesn't include room and food.

Out of state at GT costs about 26k, but ok I'll give you 30k. 26k is still about 10k less then my school, for an identical level of education (based on ranking of undergrad programs). I doubt GT is just so much more efficient at providing this level of education than my old institution, but more likely is also subsidizing the out of state students.

But either way, yes it is very likely that out of state students are graduating with 25k or more in student loans. Shouldn't they? Shouldn't they have to pay a higher price, in fact, for the benefits they get for graduating from a top-notch institution that will provide them with significant starting gains? An engineering student from GT is also not earning the 'average" starting salary, either, but much higher.

The $9,0000 for in-state tuition is an artificially low price due to taxpayer subsidies, and doesn't include room and board. So while it might seem "cheap," that is only because the GA and federal governments are forcing other taxpayers to subsidize you and/or your children's "cheap" tuition.
The fact that the price is artificially low for in-state tuition is part of the problem: it encourages too many students to go to college, and even without a lot debt, they still may have trouble finding a job


That is exactly my point as well. But how does this fit in with the "price inflation" and "tuition bubble" argument? Tuition remains too low. Yes the prices are moving up, but they are only moving up from an artificially low level, towards more realistic market price.

The argument you have made before is that prices for tuition have gone up faster than CPI and housing and other industries, and that this represents a "tuition bubble". But how is something a bubble, if it moves closer to it's market price from an artificially low level?

Isn't higher tuition prices at state subsidized schools, exactly what we would want to see in order to an appropriate price tag on students?

 
At 5/19/2012 8:24 PM, Blogger Ken said...

AIG,

Have you ever heard of the bum outside my apartment begging for food? No? Strange. He was a college drop-out too. Hmm...

Except that wasn't your original point. Your original point was that to be useful, particularly in tech jobs, you need a degree. This of course is false. I've worked in the tech industry for the last for the last 13 years (first chip fabrication, now software) and there are a LOT of people who do high skilled, high tech jobs without a degree.

Specifically, you claimed that the only way to be capable of "develop[ing] a robotic milling machine", as if the only way to learn technical skills and design skills are in college. This is so absurdly false as to be laughable that you would think that this was worth saying. The US's most notable inventor (Thomas Edison) wasn't even a high school graduate.

That made very little sense.

What's so hard about understanding that it takes for more brains and ambition to become an average doctor rather than an average plumber? What's so hard about understanding that if all you're capable of is to be an average plumber you will probably not be capable of being a college graduate, much less an average doctor?

 
At 5/19/2012 8:49 PM, Blogger PeakTrader said...

Education seems to be an excellent investment. BLS chart:

http://www.bls.gov/emp/ep_chart_001.htm

 
At 5/19/2012 8:58 PM, Blogger Bill Champ said...

This comment has been removed by the author.

 
At 5/19/2012 9:05 PM, Blogger Ken said...

Peak,

One of the main problems with these graphs is that it doesn't take into account the type of person who goes to college. If you have the brains and ambition to be successful in college, you will be successful in life, regardless of whether or not you go to school. If you have the brains and ambition to get reach the top of the academic food chain by getting a PhD, then you have the brains and ambition to be very successful in life, regardless of whether or not you go to college.

The other problem is that these charts don't distinguish between a PhD in computer science vs. a PhD in history. A ton of information is lost when looking at averages, which can lead to some very bad conclusions (like it's a great investment to go $35,000 in debt to get a master's in puppetry).

 
At 5/19/2012 9:19 PM, Blogger PeakTrader said...

Ken, in general, people who have "brains and ambition" are more likely to go to college.

And there's nothing wrong with one person being excellent in computer science and another person being excellent in history.

 
At 5/19/2012 9:38 PM, Blogger Ken said...

Peak,

That's what I'm saying. A lot of people who are smart go to college. My point is that they would have been successful anyway. School didn't make them successful, they did.

And you're right there's nothing wrong with being excellent in whatever your chosen field. But, with a PhD, to expect to make $1500/week as a historian is likely unrealistic (this is the high end for all historians) and to make only $1500/week as a computer scientist (this is below the starting salary of a CS PhD), then you are likely very underpaid.

 
At 5/20/2012 8:52 AM, Blogger juandos said...

"Average salary of plumber: $47,000"...

Well is that one of those somewhat questionaable BLS numbers?
The only reason I'm using the word 'questionable' is that lumping plumbers (residential, commericial, or construction) is a whole different game than typical pipe, ship, and steam fitters...

According to Salary.com a Plumber III Median Salary is $51,110

"Average salary for family physician: $144,000"...

Interestingly the BLS reports this number: Family practice (without obstetrics) 189,402
...

Salary.com reports this Physician - Family Practice Median Salary $174,945

In neither case though is any reference made regarding the cost of malpractice insurance which can vary widely from state to state...

Maybe just maybe Thiel has a bit of a point...

 
At 5/20/2012 10:01 AM, Blogger Ken said...

This comment has been removed by the author.

 
At 5/20/2012 10:04 AM, Blogger Ken said...

Also, when comparing doctor's and plumbers salaries, don't forget to take into account that a doctor's salary doesn't kick in for at least 11 years after high school (4 years of college, 4 years of medical school, and 3 years of residency), don't forget to include debt, work load, and taxes.

For all this talk of comparisons, none are taking into account:

1. lifetime net earnings
2. lifetime debt burden
3. lifetime tax burden
4. lifetime training hours
5. lifetime working hours
6. average hourly net wage over the course of their lifetime
7. lifetime insurance burden

I don't know any of these, but I do know that looking at gross earnings alone, while not meaningless, isn't really that informative.

The other thing not being mentioned is that medical school drop out rate is over 50%. No one's medical school loans are forgiven for dropping out.

 
At 5/20/2012 3:27 PM, Blogger AIG said...

Except that wasn't your original point. Your original point was that to be useful, particularly in tech jobs, you need a degree.

What I said was, I'd like to see someone who designed and build a robotic milling machine, who didn't get those skills at a university.

I'm still waiting for your example.

 
At 5/20/2012 3:31 PM, Blogger AIG said...

Maybe just maybe Thiel has a bit of a point...

Of course he doesn't. A plumber incurs no costs to himself? Only doctors incur costs?

This whole concept is so Luddite in nature, it is disturbing. Here we are on this blog talking about how the US leads the world in innovation and productivity in manufacturing, in medicine, in medical devices etc etc. Well WHERE do all those things come from? WHO designs them? WHO builds them? WHO uses them?

And then here we are, on the same blog, saying "well, maybe you might as well be a plumber instead of a doctor or engineer". Really? And what are plumbers going to compete in the world market with? And what happens when tens of thousands of people become plumbers? Will plumbers still make 47- or 57 or whatever the rate is today?

This is such an anti-free market argument to make..."don't become whatever you feel is more beneficial to you based on your skills and circumstances! N0...become a plumber because I don't like universities and higher education because I have a political axe to grind!"

 
At 5/20/2012 5:24 PM, Blogger Ken said...

AIG,

I'm still waiting for your example.

No you're not. I all ready gave you five examples above. You're a great example of if you don't want to know something, you go out of your way to ignore what you've been told or even to do simple research that takes less than 10 seconds.

It's not hard to see find incredibly successful people who designed and invented all sorts of things. But I guess if you're willing to ignore five simple examples that I listed above you aren't willing to google for "inventors who didn't go to college", which turned up over 1,000,000 hits.

 
At 5/20/2012 6:36 PM, Blogger AIG said...

No you're not. I all ready gave you five examples above.

I'm sorry. Were you implying somehow that Steve Jobs created the technologies, the machinery, the code etc for his Apple products? Are you implying somehow that Bill Gates did the same for his Microsoft products? Did they also develop the production technologies for making those products...in Taiwan or China or South Korea or wherever they are made?

Did Steve Jobs and Bill Gates develop the molds for making the plastic casing of their product?

Because if that's the case, it is indeed strange that both Apple and Microsoft hire massively, and exclusively, from universities their top graduates.

So I am still waiting for an example of how any of these technologies and products were developed and produced, without university graduates.

It's not hard to see find incredibly successful people who designed and invented all sorts of things.
There are always statistical anomalies.

you aren't willing to google for "inventors who didn't go to college", which turned up over 1,000,000 hits.
The guy or gal who invented the wheel, I'm sure, didn't go to college. But I'm asking if the guy who designed the mold to make the back cover for the iPad, or the guy who laid out the production process for that back cover of the iPad, and the guy who designed that back cover...did they go to college? Sure Steve Jobs didn't go to college. But Steve Jobs didn't do any of these things either. He hired people who had the knowledge to do them...But where did they get that knowledge?

Who build that mold that was then shipped to China to be installed in a Foxconn factory? Who designed the ship on which it was transported? Who designed the machinery to cut the steel plates for that ship? Who designed the welding process for welding those steel plates together?

So this is like the "I Pencil" story. Did "Steve Jobs" or "Bill Gates" create all these things?

 
At 5/21/2012 2:01 AM, OpenID Sprewell said...

I just watched that full video and wow, is Vivek Wadhwa a grade-A moron or what? He actually tries to argue that all the partying at US colleges is a benefit because it teaches students how to socially interact with each other, therefore making them more "innovative," which is an argument so ludicrous I felt embarrassed for him as he was saying it. Of course, he's comparing that to the other extreme at many Asian universities, where they are so driven to cram the worthless curricula down their throats, that they do nothing other than study 24-7. Of course, that ridiculous extreme doesn't excuse the opposite bacchanalian extreme of many US college students, but in the mind of dimbulbs like Vivek Wadhwa, that argument makes perfect sense. It is good to see Peter Thiel and his anti-college ideas given wide publicity on 60 Minutes, even if Morley Safer, ever the most middle-brow and pedestrian of 60 minutes' hosts, actually makes the usual dumb arguments for universities and tries to browbeat Thiel a bit during the interview. Guys like Morley, AIG, and Wadhwa are like villagers in a cargo cult: they confuse what passes for "education" in colleges for learning, precisely the kind of simple sorts that the academic conmen are happy to fleece. :)

 
At 5/21/2012 6:29 AM, Blogger Larry G said...

there are entrepreneurial talents that may not need to complete formal schools but but most folks are not that talented and do need schooling.

How much is needed and of what kind is under debate but we know a couple of things.

1 - our secondary K-12 schools rank 15th and worse in world academic standareds.

2.- employers are saying that there are not adequately educated workers for the higher tech jobs.

Not everyone is a "natural" sports talent that can make the pros and not everyone is a "natural" entrepreneurial talent either.

Telling kids that if they can make the sports pros they don't need schooling ... is about the same telling kids they don't need schooling because Gates/Zuckerberg/etc dropped out.

 
At 5/21/2012 10:07 AM, Blogger Ken said...

AIG,

Were you implying somehow that Steve Jobs created the technologies, the machinery, the code etc for his Apple products?

Of course, they did. That they didn't write all of it is irrelevant (see below). Thinking along these lines, you seem to not understand that without Steve Jobs, Steve Wozniak would have only been one of the best programmers at HP. Whereas without Woz, Jobs would have found another competent programmer to implement his vision. Technical skill and achievement aren't what drive innovation.

Did Steve Jobs and Bill Gates develop the molds for making the plastic casing of their product?

No, as is obvious. Since no one person even knows how to make a pencil, no one person designed an iPhone or an operating system, even those really smart guys that finished college. This in no way diminishes the astonishing accomplishments of Gates, Zuckerberg, Jobs, Edison, or Dell.

There are always statistical anomalies.

And yet, you don't muster any statistics to back this assertion.

But I'm asking if the guy who designed the mold to make the back cover for the iPad, or the guy who laid out the production process for that back cover of the iPad, and the guy who designed that back cover...did they go to college?

This most assuredly was not what you were saying above (your comment at 5/19, 11:54am). What you were saying then is that college is the only way to learn how to do these things. Basically, you were saying that going to school is what makes people smart and ambitious. This is of course backwards. Smart ambitious people go to college.

If the university system were to end tomorrow, I have no doubt that technology would still advance. Whereas you are saying that without the university system, mankind would slide into the Dark Ages.

 
At 5/21/2012 11:17 AM, Blogger AIG said...

It is good to see Peter Thiel and his anti-college ideas given wide publicity on 60 Minutes

Well, 60 minutes is a poor program to begin with, so no surprise that such ideas would get traction in the mainstream media. They have for a while. As I recall, back in the 70s, college was supposed to be a bad investment too. Yah...that worked out ;)

But strange how no one asked Mr. Peter Thiel...WHO designed and build the keyboard on which people type in their Paypal accounts? Designing a keyboard requires knowledge of things ranging from material properties, spring properties, thermal properties etc etc. Never-mind designing the tools and machines to make it.

Did...that require any college graduates?

 
At 5/21/2012 11:28 AM, Blogger AIG said...

Of course, they did. That they didn't write all of it is irrelevant (see below). Thinking along these lines, you seem to not understand that without Steve Jobs, Steve Wozniak would have only been one of the best programmers at HP. Whereas without Woz, Jobs would have found another competent programmer to implement his vision. Technical skill and achievement aren't what drive innovation.

I never said that is what drives innovation :) Innovation is a process of natural selection. That is quite irrelevant to this discussion.

I asked, who designed and build the technologies which they used to create their businesses?

No, as is obvious. Since no one person even knows how to make a pencil, no one person designed an iPhone or an operating system
Oh...but you just told me that those guys did. You just told me that college is...useless...since Steve Jobs didn't go to college and look at the things HE invented.

How would the iPad exist without people who gained their knowledge in a university? Steve Jobs didn't create it, or invent it. His role, just as Bill Gate's role, was a specific and limited role in a giant chain. But what is that chain comprised of?

And yet, you don't muster any statistics to back this assertion.
You want statistics that on average people who don't go to college earn less then people who do? You can Google it, thanks to the search engine that armies of highly educated college grads developed at Google.

This most assuredly was not what you were saying above (your comment at 5/19, 11:54am). What you were saying then is that college is the only way to learn how to do these things. Basically, you were saying that going to school is what makes people smart and ambitious. This is of course backwards. Smart ambitious people go to college.

Can you...quote me? Cause I can't seem to find any of that in my post.

If the university system were to end tomorrow, I have no doubt that technology would still advance. Whereas you are saying that without the university system, mankind would slide into the Dark Ages.

I'm saying the university exists for a reason. You seem to think it exists for no reason. You seem to think its like the appendix...you get rid of it, you're ok. But maybe it's more like your frontal brain lobe. It's there for a reason.

My approach is always that the markets are right. The markets demand higher levels of knowledge, and higher levels of knowledge breeds demand for yet higher levels. It's a feedback loop. Universities are created to respond to this feedback. I am not about to come here and say...as some apparently seem to do...that 99% of the market players re total bafoons cause they just don't get how useless "college" is. If it were so, the markets would have discovered it long ago, and taken advantage of it. Obviously, they haven't.

 
At 5/21/2012 12:09 PM, Blogger Ken said...

AIG,

You just told me that college is...useless

Either you're a liar or failed reading comprehension. No where did I claim this. You were claiming that the only way anyone could be good at anything is to go to college. A single example proves this claim false. I provided five.

How would the iPad exist without people who gained their knowledge in a university?

Are there really no other institutions besides universities doing research into electronics and telecommunications?

You want statistics that on average people who don't go to college earn less then people who do?

This doesn't "prove" anything, since all it shows is that the TYPE of person who goes to college will earn more than those who don't. There are numerous studies debunking the "need" to go to college to earn more than those who don't. Study after study shows that it is the people themselves, not colleges, that make a person successful in life.

Can you...quote me? Cause I can't seem to find any of that in my post.

You said this:

Does one just...drop out of college and develop a robotic milling machine? - AIG 5/19/2012 11:54AM

What does this mean if it does not mean college drop outs can't "develop a robotic milling machine"?

You seem to think it exists for no reason.

No where did I say this. Either you are dishonest or don't understand what I am saying. But I'll clear it up to make sure my position isn't unclear:

You are claiming the only way for people to gain knowledge and experience to develop "robotic milling machines", with the further implication to develop anything techinical, is to go to college. I'm calling bullshit on this statement and provide counter examples.

This follows from simple logic:
Claim S: X implies P
Claim that S is false: Y is in X and does not have property P.

Your claim: the only way to learn how to develop technical things is by finishing college.

My claim that your claim is false: Steve Jobs, Bill Gates, Thomas Edison, Michael Dell, and Mark Zuckerberg.

 
At 5/21/2012 3:39 PM, Blogger AIG said...

Either you're a liar or failed reading comprehension. No where did I claim this. You were claiming that the only way anyone could be good at anything is to go to college.
I never said that either :) Oh well, we can go back and forth all day with I said she said, but in the end of the day, it's all written here for everyone to see.

Here's what you said:
"many of the people getting suckered going into college"

So you're making the comment that going to college is for suckers. Now you're saying..."no I didn't say that!"

Are there really no other institutions besides universities doing research into electronics and telecommunications?
I never said that there are no other methods of gaining such knowledge. My question was, WHERE else can you get such knowledge? As in, can you specifically tell me how someone designs and builds a machine, tools, process and product that goes on an iPad, without college grads?

Can it be done? Anything can be done. I just want a real-world example of how this is done. I'm still waiting.

What does this mean if it does not mean college drop outs can't "develop a robotic milling machine"?
I'm asking you a question ;) I'm not making any statement. You're the one making the statement that going to college is for "suckers". So, ok, give me an example of how one does the things I said, through some other means.

I'm open to examples.

No where did I say this. Either you are dishonest or don't understand what I am saying. But I'll clear it up to make sure my position isn't unclear:
You said it's for suckers. Your own words.

You are claiming the only way for people to gain knowledge and experience to develop "robotic milling machines", with the further implication to develop anything techinical, is to go to college. I'm calling bullshit on this statement and provide counter examples.
I asked for an example. Still waiting.

Your claim: the only way to learn how to develop technical things is by finishing college.

My claim that your claim is false: Steve Jobs, Bill Gates, Thomas Edison, Michael Dell, and Mark Zuckerberg.

1) I never made that claim
2) Your examples don't provide any evidence as to why "college is for suckers", or examples of people who "invented" or 'created" things, without college. Sure Bill Gates didn't go to college, but Bill Gates didn't build the circuit boards that went into his machines.

You pick people who had ONE role in the development of a product. But none of their products were developed through ONE person, so any single person can't possibly prove your point.

Single people don't develop technologies or products or companies. They play specific roles in them.

 
At 5/22/2012 8:32 AM, Blogger juandos said...

"Of course he doesn't. A plumber incurs no costs to himself?"...

Well aig you must know very little about plumbing or the people who do it...

Plumbers incur many costs, obviously most of them don't approach those of most if not all MDs but they're costly none the less...

Tools, stock, vehicles, insurance, bonding costs are just a few of the items a plumber has to cover...

Its no trick at all that many plumbers have in excess of $20+K invested just in tools...

Many of those tools have to be replaced or repaired quite often depending on just what the plumber does has his/her norm of work...

"And then here we are, on the same blog, saying "well, maybe you might as well be a plumber instead of a doctor or engineer". Really?"...

Well guess what aig, not everyone is cut out to be an engineer, doctor, or god help us a lawyer even on this blog site...

How many kids go to college because they really want to and know that college is a 'necessary' stepping stone to where they want to end up?

How many go because they're either pressured into it by family or peers?

The fact is that maybe to many people are going to college when in reality its really the last thing they 'want' to do...

 
At 5/22/2012 10:06 AM, Blogger AIG said...

Well aig you must know very little about plumbing or the people who do it..
Juandos, mine was a rhetorical question since I know what you said. And that was my point, plumbers incur costs too.

Well guess what aig, not everyone is cut out to be an engineer, doctor, or god help us a lawyer even on this blog site...
Not everyone is cut out to be a plumber, either. That's the beauty of allowing people to make their own choices, without big-mouths like Peter Thiel telling people how "useless college is".

How many kids go to college because they really want to and know that college is a 'necessary' stepping stone to where they want to end up?
Most. You people really don't know any college students, do you?

How many go because they're either pressured into it by family or peers?
None. None past the first year, at least.

The fact is that maybe to many people are going to college when in reality its really the last thing they 'want' to do...
I'm not making the argument that too many people...aren't...going to "college". I'm saying that it is a ridiculous idea to say "too many people are going to college", because there is no such thing as college. Too many people may be going for glassblowing, for all I know...but what does that have to do with bio-engineering? There's no such thing as "college"...there's just different schools and different fields.

 

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