Friday, December 10, 2010

The Stupidest Cut Of All

Unlike the French, the British are most definitely not a nation of active protesters and rioters.  So when they take to the streets, smash shop windows, throw chunks of steel-reinforced concrete, set fires and attack Prince Charles's Rolls Royce (a smashing counterpoint to austerity, old boy) you know something is terribly wrong.

All this is caused by the conservative government's decision to cut university funding by an astonishing 80%, passing the bill on to students and resulting in doubling and tripling of tuition fees.  Since most students can't afford such a massive hike, they will end up with - what else - taking up loans of up to $63,000 for three years of study (the normal course in a UK college).

I won't elaborate much on why slashing education spending is the stupidest cut of all because I consider it to be self-evident to anyone who can fog the mirror and count past ten without the aid of his fingers.

But I will say this:  we have all of us in the West rolled up our manufacturing and unceremoniously packed it off to China (why else do you think China's energy use soared 100% in a mere five years?).  Instead, we were supposed to become post-modern vibrant economies based on technology, design, know-how, smarts;  in a word: education.

Well, Mr. Prime Minister Cameron, to quote from one of your famous countrymen, Goodbye To All That. Robert Graves was educated in Oxford just like you were, so I'm sure you understand my allusion to the needless slaughter of an entire generation of young men during WWI,  and the figurative parallel with today. 

The question is, will your children?

28 comments:

Daniel de Paris said...

Thanks hell, that had to be said.

Looking to the videos of the "events" in London as well. I was having exactly the same thoughts here.

I have a problem though. Who can believe the current British academia can produce the kind of skills that may be required now anyway?

Apart from the brilliant Oxfridge output in a couple of scientific fields and a nastly league of financial terrorist education camps, what the use of British university? What the target?

Having four kids including two at the age of the current, I certainly prefer for them to focus on German as a second language and English as a third... They will study in a country that still produce something...

Here in France, Sarkozy - I certainly do not like him - had a tough time reducing the educational budgets. He finally ended up moving them up and reforming the university. Including organization (they are now standalone à l'allemande).

In view of the current state of the British industry, the challenge is bordering to impossible for English tories.

They want the mob to get back to its XIXth century status? But, hell, where are the mills gone!

Lord Blagger said...

The problem is different.

What's really happened is that instead of the government borrowing for students to go to uni, and then presenting the bill later in a bundle with no breakdown (tax), students have been presented with a personal bill.

Several things have shocked them. First is the cost. They are balking at the cost. Then there is the risk. They are being asked to under take the risk of their own education. Current that also falls on the checkout girl at the supermarket.

I personally think all government services should come with a bill that the individual can see. In particular people need to see directly what is going on debts, all of them. Then I suspect they will all riot.

The question of a debt is interesting because lots on the left deny the existence of government debt, period. In particular pensions.

If you spend money and agree to pay for it in the future, you create a debt. If take money in advance for a service, you also create a debt. Governments however, ignore these simple rules. That's the reason for the mess.

Hellasious said...

Here's the problem with producing a personal bill for each and every government service rendered: social cohesion disappears, i.e only the rich can afford it.

Apart from any moral objection one may have, this makes ZERO economic sense. For example, as a totally selfish businessman I want a well-educated, healthy workforce that will show up for work on time using low-cost public transportation and can then go home to a safe neighborhood untroubled by crime.

The very foundation of successful capitalism is a cohesive society, instead of a bunch of me-only blood-thirsty animals prowling the economic jungle for easy prey.

But What do I Know? said...

I agree, Hell, with the caveat that one should not conflate university attendance with good education. God knows that here in the US most college classes are useless in a practical sense, and the only value in a university education that could not be delivered in a far more efficient manner is the degree they give you. Ask anyone who has listened to a Great Courses series or something similar and they will tell you that the $50 they spent was of far more value than the money they spent for attendance at college.

The cost of a post-secondary education is monstrously inflated compared to the value delivered. If the British government could get smart, it would offer an equivalent degree track with an internet university that would offer the same courses at a far cheaper price. Then it could have the same educational standards and its budget cuts too.

Anonymous said...

"If you spend money and agree to pay for it in the future, you create a debt. If take money in advance for a service, you also create a debt. Governments however, ignore these simple rules. That's the reason for the mess."

"This mess" has to do with tuition subsidies and pensions? Nothing to do with Governments paying for the failed bets of banks?

Funny how lots on the right deny existence of a banking collapse and their dependence on government debt.

Anonymous said...

"If you spend money and agree to pay for it in the future, you create a debt. If take money in advance for a service, you also create a debt. Governments however, ignore these simple rules. That's the reason for the mess."

"This mess" has to do with tuition subsidies and pensions? Nothing to do with Governments paying for the failed bets of banks?

Funny how lots on the right deny existence of a banking collapse and their dependence on government debt.

JP said...

Hellasious says:

"Apart from any moral objection one may have, this makes ZERO economic sense. For example, as a totally selfish businessman I want a well-educated, healthy workforce that will show up for work on time using low-cost public transportation and can then go home to a safe neighborhood untroubled by crime."

You are thinking about this problem from a positive-sum enlightenment approach.

You're making a moral/philosophical argument and calling it an economic argument.

I'm not saying you're wrong, only that you are not making a purely economic argument.

JP said...

Hellasious says:

"Here's the problem with producing a personal bill for each and every government service rendered: social cohesion disappears, i.e only the rich can afford it."

As opposed to the current approach in which we massively issue government debt and then wait for a soverign default to see what happens????

We're talking about an "education bubble" here. Most people who are in college don't need to be in college. Their lives would be much better if they went into trades at 18 rather than wasting five (or six) years in college racking up massive debts for a degree in marketing or somesuch.

This entire argument hinges on cheap energy anyway. If we can't actually transition to something sustainable in terms of energy, this entire argument was moot.

p.s. You should update your "Goldman Sachs is the Economy" post from, what, 2007? That would be amusing for comparison.

Tiago said...

I still partially live in the UK (inside the university system, no less) and I think I can add a bit of info to this.

First, a nitpick: the system varies around Britain, for instance in Scotland is very different. What you describe is the English system (which I think - not sure - applies to Wales).

Second, and most importantly: The debt accrued (the state lends you the money for the fees) only needs to be paid IF YOU MAKE MONEY. Very different from the US. So, if you end up unemployed or with a sh.ty low pay job then no worries, there will be no collection (which is done with taxes). If you emigrate? No payment. A bad income year: No payment. After a certain amount of years (a lot, dont know how many), the debt lapses.

I know a few people in this situation, it is not directly me. So if other people have more up-to-date information, please correct me. But I believe the factual description above is mostly correct.

The repayment system is actually progressive and, may I suggest, fair.

Another issue (already raised here) if the appropriateness of what is taught. If can google for some very strange BScs indeed. But even the post-industrial economy training: If it of any use in the predicament were are entering (peak oil, peak resources, over population)?

Hellasious said...

Education is not only about economics, of course. In fact, it isn't even mostly about economics.

Education is an absolute must for enjoying life. It's the difference between a block of raw marble and Bernini's Apollo and Daphne.

Tiago said...

My email sig is: "If you want to get laid, go to college. If you want an education, go to the library." - Frank Zappa

It is not clear for me, after 4 degrees (varying from computer science, to biology and touching medicine) that university provides a good education.

Indeed I am getting a splendid education: since I got back to school I got the free time to read and I am really getting a PhD (PHILOSOPHICAL doctor) degree. But not from what I get from school.

May I recommend Paul Feyerabend's "Against Method"? Maybe too radical, but a nice argument. Especially for someone with a hard-science (or near hard science) background...

OkieLawyer said...

As someone who has a certificate from Oxford University (part of my law school education), I must say that British youths are now going to get to experience the debt that American college and university students have "enjoyed" for some time.

If you notice, we didn't riot. We accepted our fate.

By the way, I thought I would leave you with a thought that I heard today at work: apparently the economists who advise the U.S. federal government are saying that by all metrics, we should have already have pulled out of the recession. They said they could not understand why we haven't. I had to pipe up and say "I know."

Ahem. I couldn't help myself. But there was no time to explain, and it wasn't really the place, anyway.

Have a nice day, y'all.

Hellasious said...

NBER is the official determinant of US economic expansion/contraction dates.

According to them the last recession started in Dec 2007 and ended in June 2009, i.e. we are in "growth" mode.

OkieLawyer said...

Yes, what was said is that the economists could not understand why we were not getting robust growth.

Brainy Smurf said...

Feudal societies do not require large populations of university graduates.

If you care to keep up with The Chronicle of Higher Education you will find many articles about various colleges eliminating departments in cost cutting moves. The first to go are European languages other than Spanish and arts programs. SUNY Albany has been a recent example, but it's hardly alone.

The root problem with our discourse about education is that we conflate education with training. They are quite distinct. Education's purpose is not to be in any specific way useful, but to foster human development of potential. Training is what you seek to get a job working for somebody else.

camabron said...

Re: Education.

Ignorance is the night of the mind, but a night without moon and star. ~ Confucius

Kinuachdrach said...

Long ago, someone said that the last couple on Earth will go to their graves arguing about how they should have educated the children they never had. This is a contentious topic!

There seem to be three points about which there is little debate:

1. The percentage of young people getting university educations continues to climb.

2. The cost of that university education is growing rapidly.

3. The quality of that university education is declining.

Those are not sustainable trends -- especially #2 & #3. Clearly, something will give at some point. Charging students the true cost of a university education will make students demand better value from universities, as well as look for cheaper alternatives.

Let's be constructive -- if someone does not like making students pay their fair share, what are possible alternatives?

Crito said...

"Let's be constructive -- if someone does not like making students pay their fair share, what are possible alternatives?"

Pay for them the way the Federal Government pays for war, and other expenses.

But yes, value does matter. What is the value of well critical thinkers compared to perpetual war?

Anonymous said...

I have studied and lectured in a university. Now getting paid for in the private sector.

One way of achieving the 80% savings for the government would be to kick 60% of the students out of the universities. The worst professors and faculty go out of the door too, of course. Since the worst students consume more resources in general, kicking 60% out would result in 80% savings.

After this the degree would again mean something.

What I see happening every year in all western countries is inflation of the university degrees and college degrees.

First there are more and more students each year, which means that the average student is not as bright (motivated,talented, whatever) as they used to be. Then the standards must be lowered so that a reasonable percentage of them get a degree. Then we all pretend that the university degree still means something.

This is what has happened in Finland and I think this is happening elsewhere too. The employers know this.

The end result of this inflation is a lose-lose situation. Pretty much like economic inflation where we pretend that the dollar (or euro) still has the value it used to have?

Dr John said...

OkieLawyer: How do the costs in the UK compare to the average costs for a University degree in the U.S.?

John

OkieLawyer said...

Dr. John:

From my best recollection, my tuition was paid through the University of Oklahoma, not Oxford. However, there was an extra cost for the room and board, which I didn't have at OU. At the time, everything in England cost twice as much as Oklahoma. That is where I really felt it.

Although, when I needed health care, that was free. It would have cost me a fortune in the U.S. Actually, that is not really completely true. I had to pay $7.00 (4 pounds) for my antibiotics and $25 for the office visit. When I tripped on the sidewalk the third day I was there and broke a rib, they had a medical doctor there in 5 minutes -- and that didn't cost me a dime (or 5p, for that matter).

I suppose there are trade-offs for everything.

Greenie said...

I agree with 'Lord blagger' and 'But What do I know'. It is unfortunate that Hell equates having a college degree with education. I learned a lot about current economic crisis by reading blogs and through self-studying, whereas most economics PhDs I know are as clueless as they were in 2005.

When people are asked to directly pay the bill of rearing those nincompoops known as professors, they will figure out the cost-benefit of university education.

Greenie said...

On the other hand, I understand why Hell backs the leftist loonies at the universities. It is because Hell sees everything as a fight between 'left' and 'right' and, as a self-declared commie, he already chose the side.

Hell, I agree that banking elites should bear the primary burden of this crisis, but can you cite a few well-known university professors, who talked against bailouts in 2008? Almost all the elite intellectuals I know (starting with Krugman) thought the banks should be 'saved'.

Hell, I think you are confused as hell. People should go to internet to get educated and save their four years.

Daphne said...

To be honest, this is one of the things I admire about the Brits because they don't tend to overreact. Like you said, when they brawl on the streets, there must be terribly wrong. Unlike other countries and I guess I should say in my country, as well, we argue or take on the streets over the smallest issues. That's what you get when you live in a democratic country.

Nile said...

Sorry about that last post...

To be honest, this is one of the things I admire about the Brits because they don't tend to overreact. Like you said, when they brawl on the streets, there must be terribly wrong. Unlike other countries and I guess I should say in my country, as well, we argue or take on the streets over the smallest issues. That's what you get when you live in a democratic country.

OkieLawyer said...

I think some here would be interested in this 60 minutes piece:

State Budgets: Day of Reckoning

OkieLawyer said...

And more food for thought:

Why Government is More Afraid of Debt than Depression

What Mr. Hudson says in this video is very close to what I have been saying.

OkieLawyer said...

I'm am going to be a blog hog today and throw in one more link:

In the report by bankruptcy examiner Anton Valukas that came out last March, he describes how Ernst and Young threw up a brilliant "We’re not corrupt, we’re just incredibly stupid" defense when confronted with the question of the $50 billion in Repo 105s in the second quarter of 2008. The report (a PDF of which you can view here) talks about what E&Y’s Lehman auditor Hillary Hansen had to say when future E&Y whistleblower Michael Lee confronted her about the $50 billion in Repos:

During the Examiner’s interview of Hansen, Hansen recalled that while Ernst & Young questioned Lee about his May 16, 2008 letter, Lee "rattled off" a list of additional issues and concerns he held, one of which was Lehman’s use of Repo 105 transactions. Ernst & Young had no further conversations with Lee about Repo 105 transactions. Prior to her interview of Lee in June 2008, Hansen had heard the term Repo 105 “thrown around” but she did not know its meaning…

In other words, the lead auditor reviewing one of the world’s largest investment banks had no idea what a series of regularly-occurring billion-dollar transactions committed by her main client were, and apparently wasn’t interested. It also didn’t seem to bother E&Y that Lehman was not disclosing any of this to its investors in its SEC filings.

From Matt Taibbi: Crisis Dominoes Start Falling With Lehman Auditor

Remember when I told you that "stupidity is a legal defense?"

Start paying attention, class.