Clearly I need to hit the econ books again.
I would have thought that spending $250 billion on state education systems over the next few years would contribute to a reduction in overall economic growth, as opposed to an increase. It seems that many states are encountering budget trouble, and are being forced to consider cuts that would force students to forego higher education, in favor of — presumably — entering the workforce. Given my naivete, I imagined that enabling these people to go back to school would not only be a payoff to states that can’t balance their budgets, but would also slow down the economy. Shows you what I know.
On a conference call this afternoon, David Paterson and four other governors outlined specifics for how they would like to see a $1 trillion federal stimulus shape up, adding a request for education aid.
In addition to money for infrastructure investments and an increase in federal assistance for Medicaid and other social welfare programs, which Paterson called for in a letter to President-elect Barack Obama earlier this week, the governors called for $250 billion to support schools and colleges over a two-year period.
“We do want this to fit together as a package, and not find that the cuts we’re having to make are not working at cross-purposes with a federal stimulus,” Wisconsin Governor Jim Doyle said.
According to Deval Patrick, governor of Massachusetts, the new appropriations would be spread from preschool to colleges and universities. “Our country risks halting or reversing the progress that we’ve made on education,” Patrick said. Doyle recalled his grandparents going to school in the Great Depression, and how similar people led America through World War II and the boom of the 1950s.
After two years, education funding from individual states would return to 2006 levels.
Lest you think that $1 trillion in federal aid over two years would leave the states sitting pretty, have no fear. The governors want you to know that even if they get this money, they’ll still be forced to make cuts:
But he also cautioned against the belief that a federal windfall will enable states to avoid cuts altogeter, saying even the “greatest assistance” from the Obama administration and Congress coupled with belt-tightening at the state level will not prevent the need for “very serious action” by himself and his fellow executives.
“However, it would be a significant, palpable way in which the federal government can alleviate a great magnitude of the problem and, more than anything else, will help the public to reinvest in the growth of its own economy,” Parerson said.
I would have thought that $1 trillion would be enough to solve the states’ fiscal problems — and then some. Strickland, Paterson, Corzine, and Patrick ought to be fired if they can’t manage their states’ respective finances better than that.
Neil Stevens
Moe Lane
Steve Maley
Daniel Horowitz
Jake Walker
Too many already go to college
DerKrieger (Diary) Friday, January 2nd at 5:56PM EST (link)There was a time back when only a small percentage of Americans attended college that the idea of sending more people to college would be a good thing. We’ve long passed the point of diminishing returns and now too many people go to college. Some of the stupidest people I’ve ever met were college graduates. The college degree has become so oversupplied that many occupations that previously didn’t require a degree now do. Sales positions come to mind. One proof, IMO, of too many people going to college is the percentage who graduate with non science or engineering degrees vs that graduate with them. When I graduated in 1998 with my engineering degree I was offered $50k to start. The College of Hotel and Restaurant Management was bragging in the school paper that it’s graduates were earning a whopping $29k! Supply and demand ladies and gentlemen. Too many students are incapable of the level of school work required to earn a degree in science or engineering so waltz their way through with a crap degree instead lowering the value of that degree for those that may be truly gifted in those areas, i.e. a truly gifted history student may see his degree devalued because of the lazy student. I’m not denigrating non-science or engineering degrees just the lazy students that take them as an easy route to a degree. We need more students in trade schools. I know people in trades that make more than some college grads I know.
“In questions of power, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.” – Thomas Jefferson
“I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” – James Madison
Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any further obedience.” — John Locke, 1690
Trade Schools and Apprenticeships
Raven (Diary) Friday, January 2nd at 7:12PM EST (link)Never forget the apprenticeships.
“If you do not have a sword, sell your cloak and buy one.”
Luke 22:36
You need a college degree to have a high school
Achance (Diary) Saturday, January 3rd at 9:50AM EST (link)education these days.
The real issue I have these days is the fact that most colleges are merely indoctrination camps for the Left. Governments and large corporations are imposing degree requirements that have no real relationship to the needed job skills and consequently pose and aritificial barrier to the poor, women, and minorities. These requirements also insure that both government and large organization employees will be reliably left wing.
In Vino Veritas
Mystifying
von Saturday, January 3rd at 9:41AM EST (link)I don’t understand the point of this post.
The post purports to reflect economic theory, but its title misstates economic theory. “Latest Stimulus Idea: Keeping People in School, Out of Workforce” implies that encouraging people to stay im school during a recession is a bad idea. That is true only if there is currently more demand for labor than there is supply, and thus we can stimulate the economy by encouraging more people to work. [I.e., increase the supply of labor - shift S(l) out.] If only more people were out hunting for jobs, the economy would improve, the logic of this post goes.
But that’s not correct: there is currently an oversupply of labor, not an undersupply. Descreasing the labor supply – by, e.g., having folks choose to stay in school instead of entering the workforce – is better for all workers. Strong workers continue to work and see less wage pressure; marginal/weaker workers stay in school and have an opportunity become stronger workers.*
Spending on schools is not a stimulus that’s going to create a short term improvement — it’s essentially like spending on infrastructure. But then very little on the fiscal side is going to work as a short-term stimulus. (Unemployment benefits and some tax cuts/rebates do, but that’s about it.)
So the question is not “will spending on education create a short-term stimulus” but whether supporting education during a recession is good public policy. Frankly, I think that it is. You’re not taking needed workers from the workforce, as this title of this post implies: These folks are more likely than not going to sit idle anyway. Better to get them in a program that will maximize their earning power once the economy picks up.**
von
*The choice is rational from an individual perspective as well. School is relatively more attractive when jobs are hard to find. School delays entry into the labor market while improving one’s prospects when one does enter. That’s not a bad thing from any perspective.
**I don’t support many of the other so-called stimulus packages on offer. But there’s a clear case for treating education differently.
For we have a peculiar power of thinking before we act, and of acting, too, whereas other men are courageous from ignorance but hesitate upon reflection.
Not correct...
Brian Faughnan (Diary) Saturday, January 3rd at 2:15PM EST (link)Van -
You state the following:
The post purports to reflect economic theory, but its title misstates economic theory. “Latest Stimulus Idea: Keeping People in School, Out of Workforce” implies that encouraging people to stay im school during a recession is a bad idea. That is true only if there is currently more demand for labor than there is supply, and thus we can stimulate the economy by encouraging more people to work. [I.e., increase the supply of labor - shift S(l) out.] If only more people were out hunting for jobs, the economy would improve, the logic of this post goes.
However, that’s not correct. First off, I am not arguing that ‘encouraging people to stay im school during a recession is a bad idea.’ I am arguing that spending scarce resources to keep people in school is not a way to stimulate the economy. If you believe it’s a good idea to keep people in school during a recession or slowdown, I won’t argue the point. However, it is not likely to increase economic growth.
Increasing the available supply of labor on the other hand — by keeping people out of school, for example — would be likely (all things being equal) to lower the average worker wage. And reducing the price of a critical input such as labor would tend to increase economic activity. Many economists argue today that one factor which may tend to lengthen and worsen the slowdown is the fact that wages tend to be ‘sticky’ downward. Increasing the size of the workforce and reducing wages would help wages fall, if they need to in order to grow the economy. Over time of course, as economic growth picks up, wages will tend to rise back to previous levels.
Regards,
Brian
This is relevant
von Sunday, January 4th at 9:45AM EST (link)You’re right that wages are “sticky”, but further increasing the oversupply of labor is not going to make them less sticky. It will increase the number of folks who are unemployed because wages (and jobs) tend to be sticky. Companies are going to stop hiring long before they start decreasing the wages of current employees.
For we have a peculiar power of thinking before we act, and of acting, too, whereas other men are courageous from ignorance but hesitate upon reflection.
A Point Worth Debating
Brian Faughnan (Diary) Monday, January 5th at 8:59AM EST (link)But I disagree.
The questions isn’t really whether companies will lower the wages of existing employees — although they will. Along these lines, there are many examples of companies reducing the hours worked by employees when their wages rise too high — as a result of minimum wage laws, for example.
Beyond that, it’s entirely normal for companies to lay off employees who make too much, in favor of others who will work for less. And if companies and employees together insist on keeping wages above the market level, others will enter the market and take advantage of lower wages.
I must disagree...
rbdwiggins (Diary) Saturday, January 3rd at 10:51AM EST (link)“But there’s a clear case for treating education differently.”
That’s the problem. Our university system has not been held accountable.
“Supporting education” is code for increased government spending.
Increased government spending does nothing but increase the cost of a college education across the board. The net effect: More middle-class Americans, those who do not qualify for government subsidies, find that a college education has been priced out of their reach.
The answer: Force our university system to undergo a “Chapter 11″ type reorganization. The same structural changes that any corporation facing a financial crisis would be forced to make in order to remain viable.
A few options: Down-size the entire university staff; eliminate all nonessential departments; eliminate all courses with a “Studies” suffix; eliminate all financial aid to foreign students; cut salaries across the board; eliminate “tenure” and institute a “merit-based” system.
“Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.” – Ronald Reagan
Obviously, that was meant for von... nt
rbdwiggins (Diary) Saturday, January 3rd at 10:56AM EST (link)“Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.” – Ronald Reagan
rbdwiggins ....
von Sunday, January 4th at 9:50AM EST (link)I would take your response more seriously if you presented a serious response. There is “university system” can be placed into anything that even faintly resembles ch. 11. The university system is made up of hundreds of very, very different component parts: land-grant schools, private schools, religious schools, etc. Harvard is not BC is not MSU is not Loyola. Heck, BC is not any of the Loyolas — and they’re run by the same religious organization!
The US university system (in engineering, economics, and the hard sciences) is probably the best in the world and a huge competitive advantage for the US. The last thing you want to do is encourage an indiscriminate downsizing across hundreds of disparate research institutions.
For we have a peculiar power of thinking before we act, and of acting, too, whereas other men are courageous from ignorance but hesitate upon reflection.
Available resources...
rbdwiggins (Diary) Sunday, January 4th at 11:16AM EST (link)My point is still valid. Increased government spending on education, increases the cost of education, and increases the financial burden on the middle-class (In the form of tuition increases and higher taxes.). That’s what always happens when we treat education differently.
Said nothing about indiscriminate downsizing. The point of reorganization is to justify every position, every department, every course and every expenditure in order to free-up existing funds. Re-direct those funds into areas of study that will ensure our competitiveness in the global market. They could even be used to lower college tuition.
The debate will then be about “what constitutes justification,” not the unintended consequences of more government spending.
“Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.” – Ronald Reagan
The public university system
zuiko (Diary) Sunday, January 4th at 11:24AM EST (link)(Obviously he is talking about the public university system, not Harvard) is in dire need of some downsizing, discriminate or not. States are spending an unbelievable amount of money on them and still tuition skyrockets every year. It is not sustainable in its current form.
Underlying most arguments against the free market is a lack of belief in freedom itself. – Milton Friedman
Amen
icbm (Diary) Sunday, January 4th at 11:52AM EST (link)I’m sure you’ve seen the articles by Charles Murray on reducing the college population (based on his new book, Real Education). If not, they are well worth reading.
Charles Murray of "Bell Curve" fame...
rbdwiggins (Diary) Sunday, January 4th at 1:11PM EST (link)or disdain, depending on your point of view.
A few notable articles of interest:
The Inequality Taboo
Intelligence in the Classroom
What’s Wrong with Vocational School?
Aztecs vs. Greeks
“Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.” – Ronald Reagan
He also has written very persuasively about a modified negative income tax plan
Mike gamecock DeVine (Diary) Sunday, January 4th at 1:19PM EST (link)similar to the one that Milton Friedman first proposed.
I am working on a column on that, as well as Lawrence Lindsey’s payroll tac cut proposal as stimulus.
thanks for the links
Mike DeVine’s Examiner.com, Charlotte Observer and The Minority Report columns
“One man with courage makes a majority.” – Andrew Jackson
In that case, this interview should be of particular interest GC...
rbdwiggins (Diary) Sunday, January 4th at 3:30PM EST (link)The subject is Charles Murray’s book, In Our Hands: A Plan to Replace the Welfare State (2006).
It includes such exchanges as this:
Or this:
Don’t know how I overlooked the book, because I’m overwhelmingly in favor of eliminating, or at least curtailing, bureaucracies.
Here’s Murray’s WSJ Article, and a follow-up Essay, on the same subject. I think “provocative” was one word bandied about at the forum.
“Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.” – Ronald Reagan
Thanks man, this is all very helpful
Mike gamecock DeVine (Diary) Monday, January 5th at 12:13PM EST (link)I too favor the neg income tax precisely because it would get rid of much of big govt and would encourage marriage due to the funds available by fathers.
Mike DeVine’s Examiner.com, Charlotte Observer and The Minority Report columns
“One man with courage makes a majority.” – Andrew Jackson
"What's wrong with vocational school?"
icbm (Diary) Sunday, January 4th at 1:24PM EST (link)That’s the one I would recommend the most, although they are all good
Yes. I should have clarified...
rbdwiggins (Diary) Sunday, January 4th at 11:56AM EST (link)Although, many private universities could benefit greatly from a little more accountability.
What’s the justification for funding anti-American ideology in any university that accepts American tax-dollars?
“Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.” – Ronald Reagan