Esquire Magazine Knows Its Target Demographic

Stephen Marche, “The War Against Youth,” Esquire. H/T LSFFP

Marche lays into the privileges Boomers have received over the years.

I try not to indulge in intergenerational warfare, but if I do, I try to be honest about the score. Marche overreaches in points like this.

“Only 58 percent of Boomers have more than $25,000 put aside for retirement, so the rest will either starve or the government will have to pay for them.”

There are three things to say about Boomers.

(1)  They lost all their equity in the housing bubble. They meant to Ponzi their land off to young people–which is a problem in itself–but that won’t happen because young people have no money and little desire to buy underwater houses in a short-sale.

(2)  The Boomers paid for their Social Security. It came out of their paychecks. They deserve it back. For example, when Marche writes:

“The biggest boondoggle of all is Social Security. The management of entitlement programs, already weighted heavily in favor of the older population, has a very specific terminal point that coincides neatly with the Boomers’ deaths. The 2011 report by the Social Security trustees estimates that, under its current administration, the fund will run out in 2036, so there’s just enough to get the oldest Boomers to age ninety.”

We should call bullshit. (a) Social Security is a pay-as-you-go system. (b) The trust fund was set up to ensure that there was enough money in it for Boomers to retire on; it was never meant to last forever and most of the scheduled benefits will continue to be delivered after 2036 because there will still be younger workers paying into the system. (c) We can increase the payroll tax brackets (or add new top ones for the super earners) to recover the shortfall. So no, Social Security isn’t a boondoggle.

 (3)  If the median Boomer has little in assets (slightly greater than $25,000), then the above graph is misleading. Marche concurs in part:

“This is no conspiracy; no nefarious backroom deal by political and corporate overlords. The impasse of the moment is, tragically, the result of the best aspects of the Boomers’ spirit. The native optimism that emerged out of the explosively creative postwar world led them to believe that growth would go on forever; that peace and prosperity were the natural state of things.”

The reality of the situation isn’t that the Boomers were overoptimistic, nor are we doomed to decline. This situation occurred because a minority of Boomers are parasites and did cut backroom deals with political and corporate overlords. They hosed other Boomers during the Dot-com and housing bubbles, and now they’re feasting on the young. This is the ideology of America: Make money without having to build anything that people need.

Here are six ways to get back on track for everyone:

(1)  Close the trade deficit, even if that means adopting bold ideas such as Keynes’ recommendation of an international currency like the “Bancor.”

(2)  Adopt a universal healthcare system like every other civilized country, i.e. one that doesn’t pay for every single frivolous medical test and procedure but doesn’t tell poor people to shut up and die.

(3)  Tax rents, not wages and interest. Shift taxes onto land values as Henry George argued. Force landowners to build on their property. Reurbanize America. Rent out the EM spectrum, geosynchronous orbits, and taxi medallions. Tax pollution and congestion. Enact severance taxes on those who harvest our natural resources. Return our shared property in the form of a citizen’s dividend like the commie-run Alaska Permanent Fund. Stop extending copyrights because Disney Corp. can’t come up with anything better than Mickey Mouse. In fact, recognize that we no longer live in the Holy Roman Empire. Copyright is obsolete. Embrace the future with new ways of supporting the arts and the public domain. Publicly fund drug research instead of giving away patent monopolies, and let depressed people smoke pot instead of paying out the nose for SSRIs. Use Linux instead of Windows or Snow Leopard.

(4)  Reduce people’s housing and student debt burdens.

(5)  Decisively confront global warming.

(6) Stop building aircraft carriers to fight the Soviet menace. Bring the troops home.

See? Society saved. 下課.

On a slightly brighter note, here’s Japanese mega-group L’Arc~En~Ciel at Madison Square last Sunday. No, they didn’t play for a week straight to sold-out crowds like Yes did in 1978, but they sure were glammed out. My seats were in the third tier (there’s that phrase again…) perpendicular to the stage so I got to watch an audience watch a show. Truly an alienating experience.

ABA Journal Discovers U.S. News’ Debt Rankings

Debra Cassens Wiess, “Average Debt of Private Law School Grads Is $125K; It’s Highest at These Five SchoolsABA Journal

The average education debt for law grads at private schools last year was nearly $125,000, while the average for grads of public law schools was more than $75,700, according to new figures released by the ABA.

This refers to the numbers found in this ABA document (PDF). No, the law schools don’t send 45,000 graduates’ debt numbers to the ABA, they take the average of their students’ debt loads and send that, which the ABA then averages again. It’s a deceptive number, and the ABA never says how many law schools are reporting their average student’s debt levels each year. Thus for the average of private law schools’ average student’s debt to go from $106,246 to $125,000 is completely incredulous. Indeed the average of the average private law school that reported to U.S. News was $116,744 (112/116 reporting). Speaking of which…

Meanwhile, U.S. News & World Report has released its own figures on the “10 law schools that lead to the most debt.” At those 10 schools, average student debt was more than $147,000 in 2011.

This has been out since the rankings. I know because I looked at this and dorked it into my spreadsheets before bothering with “Oh my God, Harvard’s number three! Wowohwowohwow, &c.” Actually, I didn’t do that. Point is, this is old news.

Also, take a good look at how many people took on debt at John Marshall (IL): 50%. Bullshit. It didn’t have or send all the data.

<editorial mode> Omitting detailed debt figures for each law school from the Official Guide is utterly irresponsible. Why the public gets more accurate numbers from a for-profit magazine before the non-profit accrediting authority is similarly baffling. Maybe people would’ve flinched at law school if they’d seen how much it cost, but instead, they get the Official Guide we know and love, which shills things like this in its “Types of Employment” section (PDF page 42):

Business and industry jobs may include positions in accounting firms; insurance companies; banking and financial institutions; corporations, companies, and organizations of all sizes, such as private hospitals, retail establishments, and consulting and public relations firms; political campaigns; and trade associations.

TheGuideforgets to mention it may include retail. It gets better:

Law-trained individuals also pursue a wide variety of nonlegal careers outside the practice of law itself. Lawyers also work in the media and public relations; as teachers at colleges, graduate schools, and law schools; and in politics and administration.

Again, this what the ABA says. It does not come out and say, “There aren’t enough lawyer jobs for everyone, many of these careers don’t need law degrees, and the people who don’t report their employment or salaries do so because they were hosed.” See for yourself; it’s a gold mine. Between U.S. News‘ “5 Ways to Strengthen Your Law School Application” and the ABA’s whitewashing of legal education’s value, I wonder why there aren’t more scam blogs. Pravda has nothing on contemporary American institutions. </editorial mode>

‘U.S. News Data Show 2011 May Be Beginning of End for Law School Tuition Bubble’ on the Am Law Daily

Didn’t have time to write this one here for the LSTB, so this post is all original.

U.S. News Data Show 2011 May Be Beginning of End for Law School Tuition Bubble

There Was No LSAT Surge

Readers of the Wall Street Journal Law Blog were likely confused by a few statements in a recent post “Whither the LSAT Takers?

Author Joe Palazzolo writes, “Recently released LSAT stats show a steep slide in the number of tests administered. The roughly 130,000 tests in February were the fewest in more than 10 years.” That 130,000 figure is the total LSAT administrations for the 2011-12 testing year, not for February. It’s the lowest since the 2000-01 testing period.

But this post isn’t about Palazzolo’s innocent typo—that was just to set up the topic—it’s about the persistent belief that wave after wave of college students took the LSAT once Lehman Bros. collapsed.

Palazzolo quotes the LSAT Blog:

This is a major turn of events. The tide is turning, folks.

You see, for most of the past decade, the number of LSAT test administrations was somewhere in the neighborhood of 142,000 per year. Then, in sudden reaction to the recession (or to Netflix’s acquisition of old Law & Order episodes), we saw a major spike in LSAT administrations — the highest number of LSATs ever administered in a single admission cycle (just over 170,000). This represented a 13.3% increase in LSATs administered over the previous year. It looked like the lawyer glut was going to become unimaginably worse, but something changed.

The eager stampede to law school stopped slowly, then all at once.

…And then he adds, “[LSAT Blog] notes the numbers may also be affected by changes in LSAC policy on when test takers can withdraw their registration.”

Nope. In the mid-2000s law schools stopped averaging repeat-takers’ scores and instead accepted their highest scores. This greatly increased people’s incentive to retake the test. Instead, the thing to look at is the number of first-time LSAT takers, which is buried in LSAT statistical analyses and shamefully isn’t up to date. Using the percent of first-time test takers from the last available testing year (60 percent, 2009-10), I’ve projected the number of first-time takers for more recent years.

This past year was probably just above the nadir of mid-1990s. However, given that the percentage of first-time takers has been declining for the last decade, it could very well be lower.

More importantly, peak first-time LSAT takers in 2009-10 was 102,948, only a few hundred more than the previous peak in 2002-03 (102,313). Specifically, the decline can be traced to October 2010, before David Segal’s New York Times coverage began, and after law the number of law school applications peaked well below their 2004 level.

Point is, contrary to the WSJ Law Blog and the LSAT Blog, the “major spike in LSAT administrations” was due to repeat takers and not throngs of unemployed college grads flocking to test centers to escape the Lesser Depression. Rather, we should be surprised that more people didn’t take the test in circumstances than we’d normally expect them to.

BLS Updates Its 2020 Employment Projections: For Law Students, It’s Very Bad

It turns out the Bureau of Labor Statistics updated its Employment Projections in February, though the Occupational Outlook Handbook will have to wait until later this month. Data for 2010-2020 are now available.

For lawyers, the 2010-2020 projection is even worse than 2008-2018, when the BLS predicted that the legal profession would add 98,500 new jobs and replace 141,900 lawyers who left the field by the end of the ten-year period. The new projection revises the number of lawyer jobs downward to 73,600 new jobs and 138,400 due to replacement. Note that the difference between the two sets of numbers places most of the loss on new lawyer positions. Incidentally, the BLS calculates 31,000 lost attorney jobs in 2009 and 2010. By comparison, dentists and doctors both saw job gains between 2008 and 2010, and both professions should encounter shortages by 2020 based on recent (albeit slightly older) graduation rates.

Alarmingly, extending the BLS’ 2018 projection to 2010, we find that there would’ve been 879,800 lawyer jobs, so the new projection sees a legal profession with 78,000 fewer positions than before, an 8.8 percent loss.

Here’s a chart to clarify.

Yes, the projections include self-employed lawyers, and yes, I still believe that the Current Population Survey greatly overstates the number of employed lawyers. That doesn’t make the employment projections correct, but I think they’re more accurate given the legal profession’s attrition rate relative to the number of J.D. holders.

And for those of you who think the Lesser Depression is the culprit, once again the BLS says that it’s projecting full employment in the target year:

“How do the BLS employment projections account for recessions?

The analysis underlying the BLS employment projections focuses on long-term structural change and growth and assumes a full employment economy in the target year. To the extent that recessions can cause long-term structural change, they may impact the projections. However, BLS does not project recessions.

How were the BLS 2010-20 employment projections affected by the recent recession?

The BLS employment projections are based on analysis of long-term structural changes to the economy, not short-term business cycle fluctuations. BLS does not attempt to project the peaks and troughs of business cycles, and the BLS projections model assumes a full employment economy in 2020, the target year. The 2010 (base year) employment for many industries still had not recovered to pre-recessionary levels when the 2010-20 projections were developed. This low employment, coupled with an expected return to full employment over the 10-year projections period, means faster growth rates and more numerous openings than might have been expected in these industries and their occupations had the recession not occurred.

Now, to ask, how does this look for new lawyers, to say nothing of the bottleneck that’s been swelling for the last decade at least?

Assuming graduation levels are flat, i.e. ~44,000 as they were in 2010, then we have 440,000 new law grads for 212,000 jobs, a projected employment rate of 48 percent.

If there are more grads as new law schools open or receive accreditation (Indiana Tech, North Texas, UMass, and others), then the ratio will be that much worse. If enrollments start dropping, more people will find work.

What does this mean precisely? The projection is over a long period of time, which can cause some unexpected distortions. For instance, law jobs that have high turnover rates will be held by multiple graduates who will be counted as employed in NALPian terms. If your garden variety new Biglaw associate position lasts exactly five years, then on average between two and three graduates will fill it every 10 years. Likewise, lawyer positions that have shorter life expectancies, especially solo practitioners, will have even higher turnover rates and will be filled by even more graduates. Moreover, as the BLS’ FAQ answer points out, as some industries recover to full employment they will refill lost positions and then add the new ones.

This is better news for law schools than for law students because it will skew graduation-plus-nine-month employment numbers upward, even though the medium- and long-term value of a law degree won’t be available to prospective law students. Remember, when two grads lacking other options form a law firm, they’re in “J.D. required” positions at 2-10-person law firms, even if the firm has a high chance of collapsing within a few years and the principals move on to more consistent work.

March 2011: Economists Discover Tuition Increases

It’s really not as glamorous as it sounds. The main impetus for the discussion is the November election. Candidate Obama said:

“We’re putting colleges on notice: you can’t assume that you’ll just jack up tuition every single year … If you can’t stop tuition from going up, then the funding you get from taxpayers each year will go down.”

Meanwhile, candidate Romney responded to a question about college tuition by a high school senior who, as far as I’m concerned, is the frontrunner for the “millennial of the Year” award:

“Don’t just go to one that has the highest price. Go to one that has a little lower price where you can get a good education. And, hopefully, you’ll find that. And don’t expect the government to forgive the debt that you take on.”

Paul Krugman—an economist I like but who has so far ducked the student debt question and does so again here—lays into Romney.

“For the past couple of generations, choosing a less expensive school has generally meant going to a public university rather than a private university. But these days, public higher education is very much under siege, facing even harsher budget cuts than the rest of the public sector. Adjusted for inflation, state support for higher education has fallen 12 percent over the past five years, even as the number of students has continued to rise; in California, support is down by 20 percent.” (“Ignorance is Strength,” New York Times)

Here’s what he’s talking about, from Digest of Education Statistics data.

Since the early 1980s recession, there’ve been two broad humps in tuition increases, caused by cuts in state subsidies to public universities, coinciding with the next two recessions. I have two problems with Krugman’s characterization of the situation.

(1)  Cost is important, but spending is more important (in the long run). Digest data indicate that our 4-year public undergraduate institutions have increased spending per student by 5.5 percent between 2003 and 2008. I wish I could find longer term data easily, but I’m guessing it’s grown as public universities have tried to keep up with private ones. For instance we see this in legal education where state law schools like Michigan charge $46,800 for residents and Virginia $44,600 as well. These law schools are public in name only and should be treated as such.

(2)  The problem of subsidizing state schools boils down to whether the state needs the graduates and whether they stay in the state. Sure, adjacent states often have reciprocity agreements, but that doesn’t do a whole lot of good if jobs have moved south and west over the years or if the degrees provide questionable value to the state. Again in legal education, last week I questioned the point of public law schools. There isn’t much demand for new lawyers, and they’re not bound to staying in the state anyway, which is actually an argument for state rather than national accreditation for public law schools. Worse, even if we were to take the moderate view that some public legal education is necessary, some states have far more public law schools than they need, e.g. Ohio, which has five public law schools out of nine total.

We can contrast Krugman’s editorial with an article by Alex Tabarrok (“Tuning in to Dropping Out,” in the Chronicle of Higher Education)

“Our obsessive focus on college schooling has blinded us to basic truths. College is a place, not a magic formula. It matters what subjects students study, and subsidies should focus on the subjects that matter the most—not to the students but to everyone else.”

Tabarrok (who, let’s be honest, also has a badass name) is right, though I prefer comparing education to the mushroom power-ups from Super Mario, which I never really played because I’m not into console games. We can observe Mario growing when he eats the mushroom, but we never know what properties in the mushroom cause his gigantism. Same holds for education: it correlates to higher wages, but there’s no reason to believe that classroom learning directly causes this.

…Which leads us to our last economist, Robert H. Frank, who argues that taxing higher incomes will reduce the motivation of people to go to college based on salary outcomes via prestige:

“We might consider taking more direct aim at the component of tuition inflation that is attributable to growing salary gaps. Raising taxes on top salaries would be a good idea for American society in general, and not just for higher education. It would not only shrink the effect of salary disparities, but would also generate some much-needed revenue.” (“The Prestige Chase Is Raising College Costs,” in the New York Times)

I’m not sure if low income taxes on the wealthy is the precise cause of income inequality, but Frank, who, like Krugman, avoids discussing student debt, is right. If we actually cared about creating living wage jobs for productive young people, then college would be one path for people who are a good fit for it and not a toll booth on the road to “the middle class.” Spending and costs would drop accordingly.

In the meantime, we still have the candidates’ comments. Romney, like all spiteful Republicans believes that debt should be permanent, which makes sense since he’s a member of the class that carelessly lent the money and believes living wages and full employment are optional. With direct loans he’s not, as the tax burden has been shifted from him to poor people. The joke, if there is one, is on him. Obama’s solution to joblessness is to double-down by sending everyone to college and then throwing them into Income-Based Repayment. He’ll be able to get it both ways: college education remains sacrosanct in American ideology and no one goes broke because of it. Policy solutions that include everyone and offend no one are essentially political Enron accounting: the CFO lifts the problem from the books in the hope that it solves itself before catastrophe strikes. Except it does, leaving Obama’s successors to clean up his mess after he’s retired.

Good luck to Romney’s high school student until then.

(Fine, here’s some Mario…)

New York Spared a 16th Law School, for Now

Emily Melas, Daniel O’Connor, and Nate Fleming, “Plans for law school tabled by BU officials,” in Pipe Dream (State University of New York (SUNY) Binghamton newspaper)

It appears SUNY Binghamton’s law school has gone wherever law schools go when they’re tabled indefinitely, like Wilkes-Barre in Pennsylvania.

“There are law schools right now who are not filling up their seats, there are graduates from law schools who aren’t getting jobs, and so the environment right now to found a new law school isn’t a particularly favorable one,” [Vice President for Academic Affairs Brian] Rose said.

Remember, it’s good to open law schools as long as it appears that law schools are doing well. Graduates’ long term outcomes aren’t to be considered. Okay, that’s not true; they do consider graduates’ long term outcomes but only in the most outrageously irresponsible manner conceived, such as Indiana Tech.

In order to create an accredited law school, the University took steps to gain approval from the New York State Division of the Budget, the SUNY Board of Trustees, the Board of Regents and the governor, as well as the American Bar Association. The University secured $3 million in state funding for the initial design and planning stages of the law school.

Please don’t say the $3 million has already been disbursed.

As to more law schools in New York … Query: What are the actual graduation plus nine-month outcomes for SUNY Buffalo and City University of New York law grads? What are their five-year career outcomes? Twenty-year outcomes? What about New York’s other 13 private law schools? The rest in the region? The J.D. plants in New England?

Also, since law degrees are very easy to find in the northeast, why should New York’s taxpayers (esp. the ones who already have to subsidize all the real estate speculators midstate and upstate who just got their property taxes capped) subsidize training for something they can import from elsewhere? Or worse, subsidize training that can be exported to different states?

Public legal education may be cheap, but is it necessary?

Mark Thoma Will Never Appear on the Today Show

Economist Mark Thoma writes,

“If the distribution of income is distorted by monopoly power, political power, and other market failures (e.g. taking advantage of informational asymmetries to sell questionable assets to unsuspecting customers who are reassured by triple A ratings, and so on), then taxing away some of the money and redistributing it to where it would have gone without the distortions is justifiable.”

Hm, that parenthetical sounds familiar … like a stripped-down, academic version of something you’d read on your friendly neighborhood scamblog. It’s not too much more of a stretch to skip the tax and force the recipients to pay the money back directly to the buyers via the judicial system. Same result, different mechanism.

Dear Mark Thoma, you are hereby banished from appearing opposite Matt Lauer on Today. Any more outbursts like this and we’ll revoke your Boomer credentials.

(Also, the irony of writing this post while listening to the Beatles’ 1965 masterpiece, Rubber Soul, is not lost on me.)

NY Fed Researchers Believe High College Tuition is Necessary

Data on student loan debt isn’t easy to come by. Rightly or wrongly there’s much reliance on finaid.org’s student loan debt clock, and wrongly, there’s over-reliance on ED’s two-year cohort default rate. That’s why I hope people take a good long read of the NY Fed’s report on student loan debt based on data supplied by one of America’s three favorite credit reporting agencies, Equifax! Oh don’t make that face; its name is cool!

Some facts:

  • As of Q3 2011, the NY Fed calculates outstanding student loan debt at $870 billion. This is lower than the debt clock.
  • Of the 241 million people whose credit Equifax tracks, 37 million (15.4 percent) have student loans. I’m guessing this is an accurate tally of the total, for the people who’re least likely to have credit scores are too old, too poor, or too young to have any debt. I could be wrong though.
  • 40.1 percent of those under 30 have student loans as opposed to 25.1 percent of those aged 30 to 39 and 7.4 percent over 40.
  • Yet, 14.7 million people under 30 have $294.93 billion in student loan debt (a third of the total). The average 20-something with student loan debt has about $20,000, which is lower than the total average, but importantly these figures include many current students who are just starting college and will take on more debt as they advance towards their degrees.
  • The median student debtor has $12,800 in debt, which is about half of the average ($23,300). Again, this also excludes the fact that many people whose debts are in the low end are either current students who will originate new loans to complete their degrees or older borrowers who are close to retiring their debts.
  • 75 percent have less than $28,000; 10 percent have more than $54,000.
  • 1.1 million people have more than $100,000 of debt; 167,000 (0.45 percent) have more than $200,000. Lord knows how many of them went to law school. I’m guessing it’s an unusually high proportion.

Here’s the researchers’ image of the distribution:

  • Only a quarter of the 10 percent of student loans that are “past due” by conventional definitions is held by people under the age of 30. This is damning evidence that the cohort default rate shouldn’t be relied on. Pray that the young will avail themselves of IBR.
  • Although some of their definitions are questionable, the researchers found that 47 percent of loans were in deferment or forbearance, and 27 percent of the adjusted number of borrowers (20 million) had student loans that were “past due,” well north of the rates for credit card and mortgage debt. That’s 5.4 million people that are or in or near Default Country, where flavor is king and debt is permanent.

These findings are about what I expected. The researchers claim they’ll update us quarterly, which is good news because it’ll allow us to see who’s taking on the inevitable increases in student debt. If the percentage of high debt holders increases faster than the low end, then we’re watching the tuition/debt disaster unfold. Conversely if the number of low-end holders increases more rapidly it means people are paying it down or taking on less debt for college (or more people are enrolling in cheaper undergrad programs relative to more expensive ones). Either way, so long as the ratio of student loan debt keeps increasing faster than GDP with no jobs or salary payoff in sight and low inflation—as it’s projected—then this will be an embarrassing disaster for the government, with some wrecked lives as a bonus.

However, the researchers don’t see the connection between access to debt causing tuition hikes.

“In addition to worries about the volume of outstanding student debt, there is concern about having enough federal aid to support the large number of students taking up postsecondary education. Federal and state governments are deeply involved in the student loan market, either directly originating student loans or indirectly guaranteeing them … [A]dvocates for students clamor for more to be done to increase the availability of student loans. Further, state budget cutbacks to higher education amid tight fiscal circumstances may result in higher tuition.”

Lack of sufficient aid isn’t the problem, tuition is, but the Fed researchers think education must be expensive. Furthermore, I’d like to know who these “advocates for students clamoring for increased availability for student loans” are. I do know of plenty of advocates who think that tuition should be cut or that cheap student debt shouldn’t be readily available.

Then the LA Times picks up the story and runs in precisely the wrong direction.

W. Norton Grubb, a professor at UC Berkeley’s School of Education, is worried that rising debt levels are forcing some students to drop out. Only 40% to 50% of those enrolling at universities such as the California State University schools end up completing their degrees, he said.

Such figures have helped bolster a long-held belief by scholars that America’s declining or stagnant college graduation rates have become an Achilles’ heel in the competitive global economy.

Again, high tuition is the problem, not high debt forcing people to drop out. Notice also what the professor isn’t saying. He isn’t saying that dropouts are suffering under debts with no degrees to show for it. Nor is he saying that tuition is too high, perish the thought. (Edububble occasionally accuses UC of packing its seats with out-state students so it can charge them at the out-state rate for at least a year. Hey, those UC police lieutenants aren’t going to pay themselves $100k to pepper-spray nonviolent, seated protesters.) Rather, he’s saying we need to send even more people to college to compete in the “globalized economy,” which really means running a trade deficit to borrow money to buy oil, land, consumer goods, and budget deficits wasted on tax cuts for rich people and endless warfare. If you’re curious about the “globalization” angle, read Peter Wood instead.

Eating America’s Young on the Today Show

If you haven’t already seen the clip on NBC’s Today where Matt Lauer asks a panel of professionals what they think of law graduates’ lawsuits against their law schools, don’t waste your time. It’s nothing new, just three well-off Boomers (Star Jones (b. 1962), Donny Deutsch (b. 1957), and Nancy Snyderman (b. 1952)) wagging their fingers at Millenials for believing that people will randomly hand them jobs that will allow them to pay off their loans. At least, that’s their characterization. I recommend reading New York Magazine‘s analysis instead.

NOTE: because I graduated from law school in 2008 and my name is all over the Internet, I’m not going to comment on whether I believe the lawsuits are meritorious, lest I prejudice myself.

I will say that Lauer needs to find better professionals, particularly Star Jones, who has a law degree. One would think a lawyer would educate viewers on the legal issues the cases raise, using terms like, “reasonable reliance,” “industry standard,” or, “material misrepresentation,” and applying those terms to the facts available (and hypothetical, remember what you did in law school?). Also, a lawyer, a businessman, and a doctor don’t usually study generational dynamics formally the way social scientists do. A sociologist’s opinions would’ve been more helpful to viewers regarding what Millenials’ values are, but that’s what I call “not-baseball television” for you.

That said, I’m guessing that Today‘s professionals represent the show’s viewers’ ages, class, and sentiments, even though the panelists are probably much better off than they are. Today‘s viewers are fools if they believe them.

Now, I’m not a professional social scientist, just a late Gen-X writer (albeit an educated one), but allow me to provide some background on the America that today’s emerging adults are entering.

Jobs Are Scarce

There was a housing bubble.

It popped.

The economy went into a nosedive and is operating well below capacity.

This is bad. It is evidence res ipsa loquitur of economic mismanagement at the highest levels, and Alan Greenspan and Ben Bernanke are not Millenials. They are professionals with high-paying jobs whose explicit purpose is to ensure that everyone else has jobs, except that the Boomers running our government (and appearing on our TVs) now believe that the dignity of full employment is optional—like upgrading to business class.

Importantly, the U.S. economy never really recovered from the Dotcom Bubble.

As a result, we’re short 10-15 million jobs, and the brunt of that shortage falls on younger, less-educated workers. Those entering adulthood today are at decisive disadvantage compared to the Baby Boomer generation. What people refer to as “giganomics,” or “the new normal,” I refer to as “economic depression caused by incompetence.”

College Grads’ Earnings Have Stagnated

Setting aside the issue of whether college education actually does make people better workers than they would’ve been otherwise, yes, college-educated workers do earn more on average than high school degree holders of the same age—graduate and professional degree holders even more so. Here are three charts sorted by average earnings by age and then education (the Census Bureau doesn’t have median earnings, a crying shame).

Now here are two charts of mean earnings for everyone who’s received a bachelor’s or more by age bracket and the same for high school diplomas.

And here’s the five-year growth rate, if it’s fit to call it that.

(Source: Census Bureau, Current Population Survey, Table P-28)

See how little higher education has “helped” in the last decade? This is a heavy composite, but we know that college tuition has risen well over the inflation rate and student debt has as well. Most of that student debt is guaranteed or lent directly by the federal government and since the late 1990s cannot be discharged in bankruptcy, and many parents have co-signed loans and depleted their retirement savings to pay for their kids’ educations. Law degrees in particular have lost much of their value due to a growth in supply of potential practitioners and stagnation in demand for legal services. These facts are important because it leaves law graduates in a uniquely bad situation compared to most other college graduates. This is why they’re suing their law schools.

How Did This Happen?

18th century economist François Quesnay observed that economies are like circulatory systems (he was also a doctor, like Snyderman, but a sharper social scientist apparently). Our economy is leaking, borrowing capital from overseas to finance a current account deficit (to buy oil and consumer goods) and into untaxed economic rents, such as drug patent monopolies, media copyrights, health care services, higher education institutions’ prestige, and the biggest one as Quesnay noted: land values. I’d add public debt (spent on tax cuts for rich people, a military to protect us from nonexistent communists, and endless messianic vanity wars) as people with badass names like Mason Gaffney do, but our debt is yielding negative real interest rates to bondholders, so it isn’t a problem right now. The housing bubble bust and the accompanying financial meltdown are the result of these policies, not the direct cause. Until we close the leaks by taxing unproductive behaviors and privileges, as well as pollution, any stimulus will drain away all over again in the long run. And don’t get me started on property tax caps.

In short, the U.S. economy has been redesigned to subsidize unproductive economic activities while taxing productive ones. This is bad. This is why those naughty, rascally, entitled, whiny Millenials are suing their law schools instead of “being responsible” by accepting their unpayable debts and downward mobility.

The Implications

Matt Lauer’s question to the panel of professionals wasn’t crafted to challenge a lawyer, a businessman, and a doctor to discuss liability; rather, it was meant to give viewers an opportunity to look down on young people and feel good doing it. I hope they enjoyed it, for their pleasure will be fleeting. Soon Today‘s viewers are going to want to retire, selling their houses to young people and relocating to fairer climates.

Uh oh. Young people are supposed to buy these houses? How can they to do that with tens of thousands or hundreds of thousands in student loan debt and real incomes that belong in the 1990s? Even the business media are starting to become concerned.

As for the students suing their schools, don’t scorn them, thank them. They’re doing Boomers a favor. The graduates aren’t going to be able to repay their loans based on their current or future incomes, meaning Uncle Sam will have to take a write-down. Moreover, Boomers have already lost the income and payroll taxes the law students would’ve paid had they been able to remain in the workforce. Shouldn’t they at least try to claw back the money from the law schools that prosper from debt peonage before resorting to that? Until the write-down, however, the universities and the private banks will continue receiving the wealth that should go to buying houses, (electric) cars, furniture, tickets to baseball games, and Star Jones’ books, if that’s your thing.

Don’t worry for Jones and her peer professionals though. They’ll still be able to retire on their cash assets, and while they’re at it, they’ll scorn their fellow Boomers for their entitlement, jeering at them and calling them “whiners” too for believing that young people would bail them out of their homeowner retirement speculations. This is the price of listening to professionals who advocate eating America’s young as economic policy.

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