Exile on Link Street–Krugman Also Sees College-Educated Luddites & SLM Hides Default Rates

(1) Paul Krugman, “Falling Demand for Brains,” and, “Degrees and Dollars,” in the New York Times

[T]he Luddites weren’t the poorest of the poor, they were skilled artisans whose skills had suddenly been devalued by new technology.

It appears I wasn’t alone in connecting e-discovery software with the Luddite fallacy. Dr. Krugman also explains legal process outsourcing:

[Research] by my Princeton colleagues Alan Blinder and Alan Krueger suggests that high-wage jobs performed by highly educated workers are, if anything, more “offshorable” than jobs done by low-paid, less-educated workers. If they’re right, growing international trade in services will further hollow out the U.S. job market.

Now if only Dean Baker would figure this out.

[If] we want a society of broadly shared prosperity, education isn’t the answer — we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.

What we can’t do is get where we need to go just by giving workers college degrees, which may be no more than tickets to jobs that don’t exist or don’t pay middle-class wages.

Now if only Dr. Krugman connected this with the $850 billion of non-dischargeable student loan debt. It’s a good start though.

Speaking of student loans…

Courtesy of the Default: The Student Loan Documentary

(2) “Securities claims against Sallie Mae and CEO adequately alleged,” in AllBuisness.com

A group of shareholders won a summary judgment motion against SLM and Albert Lord regarding underreported default rates misleading the investors into investing in SLM. It also appears that Mr. Lord (what an apt name for his position) prospered to the tune of $225 million.

I wonder what the long-term default rates really are.


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