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.
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.
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.