Month: August 2012

Law Grad Has Tact

[UPDATE: Law grad is also not a White House plant according to the Chicagoist. Kudos.]

So boring was the Republican National Convention that President B.H. Obama took to Reddit to talk to the masses. Even the title hints at a regal entrance, “I am Barack Obama, President of the United States.” Hear me roar, Simba.

Interestingly, the first question was from a person claiming to be a graduate from a top law school, which I have no reason to disbelieve. I bring it up because this person asked his or her question quite tactfully.

I am recent law school graduate. Despite graduating from a top school, I find myself unemployed with a large student loan debt burden. While I’m sure my immediate prospects will improve in time, it’s difficult to be optimistic about the future knowing that my ability to live a productive life — to have a fulfilling career, to buy a house, to someday raise a family — is hampered by my debt and the bleak economic outlook for young people. I know that I’m not alone in feeling this way. Many of us are demoralized. Your 2008 campaign was successful in large part due to the efforts of younger demographics. We worked for you, we campaigned for you, and we turned out in record numbers to vote for you. What can I say to encourage those in similar situations as I am to show up again in November? What hope can you offer us for your second term?

The writer is saying three things:

(1)  BIDER.

(2)  I and people like me BIDERed for you in 2008, and, well, BIDER.

(3)  Why should we (including me) vote for you when we’ve been BIDERed?

Except he or she said them tactfully in two ways, which makes the difference. Had the author said “You said I wouldn’t be Gen Screwed, and I’m still Gen Screwed. WTF?” B.H. Obama would’ve ignored him or her. Second, the author framed the question in a way that the President couldn’t ignore. It wasn’t confrontational as in, “Why should I bother voting for you?” It was “I’m on your side, and I’d love to help, but why should someone who’s been BIDERed vote for you?”

The tactfulness is important because politicians have many rhetorical tools at their disposal for avoiding tough questions. They can elect to answer unasked questions, they can lie, they can ignore the questioner for being “angry,” and they can relay false or misleading facts—in short, you can’t really checkmate them. The best you can do is make them feel like an idiot for not answering you.

The President replies:

I understand how tough it is out there for recent grads. You’re right – your long term prospects are great, but that doesn’t help in the short term. Obviously some of the steps we have taken already help young people at the start of their careers. Because of the health care bill, you can stay on your parent’s plan until you’re twenty six. Because of our student loan bill, we are lowering the debt burdens that young people have to carry. But the key for your future, and all our futures, is an economy that is growing and creating solid middle class jobs – and that’s why the choice in this election is so important. The other party has two ideas for growth – more taxs cuts for the wealthy (paid for by raising tax burdens on the middle class and gutting investments like education) and getting rid of regulations we’ve put in place to control the excesses on wall street and help consumers. These ideas have been tried, they didnt work, and will make the economy worse. I want to keep promoting advanced manufacturing that will bring jobs back to America, promote all-American energy sources (including wind and solar), keep investing in education and make college more affordable, rebuild our infrastructure, invest in science, and reduce our deficit in a balanced way with prudent spending cuts and higher taxes on folks making more than $250,000/year. I don’t promise that this will solve all our immediate economic challenges, but my plans will lay the foundation for long term growth for your generation, and for generations to follow. So don’t be discouraged – we didn’t get into this fix overnight, and we won’t get out overnight, but we are making progress and with your help will make more.

Since you skipped that blockquote, I’ll summarize:

(1)  I empathize [whether you believe him is your choice.]

(2)  You can be on your parents’ healthcare plan […long into an age when in past decades you would’ve had two kids by now.]

(3)  IBR solves all problems. [I won’t be president in 2032 when all your loans are canceled and you have to pay taxes on them, so it’s a political problem I don’t have to deal with.]

(4)  Democrats will create the “middle class”; Republicoids won’t. [Not that you have much of a choice.]

(5)  I will somehow create manufacturing jobs [Without lowering the dollar’s value, not that it will give you a law job.]

(6)  Clean energy [Yay!]

(7)  Even more, cheaper college education [More credential inflation, education-job mismatch that worsens the questioner’s problems in the first place.]

(8)  Infrastructure, science, and sensible spending cuts and tax increases [Probably not enough.]

(9)  Stay the course; it’ll be a long, hard slog. [Translation: Please God give me a Democrat-controlled Congress. Please, please, please … Fuck.]

The last point is really the crux of the Obama reelection campaign: inertia. And last time I checked we’re going pretty slow.

So kudos to you top law school graduate. I don’t dish out compliments too often, but you managed to keep from getting angry or petulant long enough for the president to take you seriously. Too bad the election won’t be about your future.

Every Day Is Halloween for Law Schools

Reading Karen Sloan’s National Law Journal piece “Tuition Is Still Growing” and all the commentary it’s spawned reminded me of what happens when you go to a store on November 1st­­: the remaining Halloween candy, costumes, and decorations are dirt cheap because the store has to get rid of the undemanded surplus to make room for Thanksgiving and Christmas items. The appeal to “Supply and Demand 101” surrounding tuition increases makes the same assumption: There’s been a drop in applications, so why isn’t there a corresponding drop in prices?? The answer should be obvious by now: the market for law degrees is not a “101” market. If it were, I wouldn’t’ve called it a tuition bubble for the last two years. Here are 10 reasons why there is no cause for surprise.

(1)  Past application drops haven’t correlated to tuition drops.

2011 and beyond is not the first time law schools have seen a drop in applications and raised tuition nonetheless.

To make this more intelligible, here’re the annualized growth rates from trough to peak and peak to trough over the years.

Thus we shouldn’t be surprised tuition always goes up, though we should acknowledge that the current growth is smaller than previous applicant dips. For it’s worth I would’ve predicted average private tuition would’ve gone up by less this year, like 0.8 percent over inflation rather than 1.7 percent.

(2)  Law school applicants are transient, one-time-only, pass-through buyers.

None of the blather about how tuition is driven by students’ demand for “services,” posh buildings, etc. ever addresses this particular asymmetry. Applicants do not fully inform themselves of the market in one application cycle and then wait for the November 1st­­ of legal education to buy discount law degrees—and don’t waste my time showing me 1Ls who bargained large scholarships out of their law schools this year. None of them were sitting around reading Big Debt, Small Law in 2008 thinking, “I’ll bide my time for four years living paycheck to paycheck and apply in 2012 when applications nosedive!” In other words, the decision to apply is much more significant than where to apply and how much to spend. No one who chose not to apply to law school, because they thought it was too expensive, has ever waited for the price to drop. Those who have chosen not to apply are never coming back.

(3)  Applicants suffer from crippling information asymmetries, and any decent information they do get will largely discourage them from applying.

I seriously doubt any potential applicants who look on Law School Transparency’s Web site or comb the ABA data for themselves are going to apply to an underperforming law school before giving up altogether and trying for med school instead. Any price comparisons they conduct will largely come from U.S. News‘s rankings, which are released every February. Even then, as I discovered when going through law schools’ Web sites two years ago, law schools set their fall tuition after students have signed up to buy the degree, so students don’t really know how much they’ll be paying until they show up for orientation. If they’re really unlucky the tuition will be published in credits per hour, which makes comparisons even more difficult. This is not “101” price signaling.

But it gets worse. Law schools’ Web sites also proclaim that they reserve the right to revise their tuition rates without notice. Then they list numerous, unexplained fees, such as the “academic excellence fee,” and less mysterious ones like the “library technologies fee.” Nonetheless, potential applicants have no idea whether these fees are allocated to the library or “academic excellence,” or what happens if there’s a shortfall or surplus to either. Indeed, it would be very simple for a law school to simply shift more of its costs into nonsense fees and then claim it’s holding tuition steady. Applicants who check the Web sites alone wouldn’t know any better, which is why they’re forced to wait for U.S. News to tell them how much they would’ve paid if they’d applied the previous year.

(4)  Those of us who’ve been reading Krugman have learned that while “Supply and Demand 101” says one thing, empirical facts say that nominal wages and prices tend to be “sticky downwards.”

Nominal prices frequently do not drop much absent a serious crisis, even the November 1st example above isn’t perfect in this respect. Law schools are more likely to freeze hiring, freeze salaries, lay off (non-tenured) employees, or freeze tuition and let inflation eat at it before announcing a 30 percent nominal cut to attract applicants. Indeed, in 2011, only two private law schools reduced their nominal tuition over the previous year (University of Dayton and University of St. Thomas (MN)), Ave Maria held it constant, and another 19’s nominal increases were engulfed by inflation. Generally, nominal tuition growth has been slowing, but that’s the limit of what’s going to happen:

5.7% is the average nominal tuition increase for this period. The average deviation is 1.75%.

(5)  The disadvantages the buyers have also cut against law schools that want to signal price drops.

If a law school wanted to cut tuition to attract applicants, in the first place it would have to predict that it would get fewer paying matriculants during the next application cycle, announce it was planning to drop tuition the next year, somehow convey that to potential applicants (outside of U.S. News), hope that current students wouldn’t take a leave of absence to capitalize on the anticipated price drop, and hope the applicants don’t see it as a sign that the school is about to cut prices again, lose prestige, or fail and then still apply. The problem is, once students promise to show up, the law school has to choose to (a) cut tuition as promised, or (b) raise tuition because there’s “demand” for its degree, “services,” new buildings, etc.

(6)  Law students don’t set price ceilings and walk away if the law school raises costs ‘too high.’

If a law school sees a severe enough crunch in matriculants that affects its operating budget, it can simply raise tuition to cover the shortfall, as Cooley did this year. Why? Because the entering students don’t actually look at the tuition increase that occurs between when they apply and when they get their first bills, if it’s even announced. Between tuition and, especially, unknown living expenses, students have already committed to paying a lot of money, as much as the law school told them to pay. It’s like buying something at the grocery store and looking over the receipt when you get home and finding that they charged you more for an item than was on the price tag. Sure, you could’ve checked when you were at the register, but it’s not a big enough deal for you to care, and it’s not like you expected the store to charge you more when you weren’t looking.

Remember also that the consumer protection argument this phenomenon entails isn’t swaying too many judges to think that purchasers of legal education aren’t reasonably prudent consumers acting reasonably, even though the media still wonder whether it’s reasonable for purchasers to commit to buying a product before knowing the total cost and without knowing that the seller regularly raises prices at will.

As for current students, they’re hosed—not that they look at their tuition bills either. They too have capitulated and will pay whatever the law school feels like charging them, and it’s not as though they’ll transfer to cheaper schools, drop out, or protest in response, which leads to…

(7)  Exit, voice, or loyalty?

One of the hopes I’ve had over the last two years is to see law students wake up to tuition increases. That’s why my blog’s title is about tuition and why I’m painstakingly revising a page that lists every law school’s tuition increases, though I’ve long since expanded beyond the topic. The truth is, law students are willing to shoulder significant tuition increases without any protest. If Albert O. Hirschman’s book Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States were applied to law students, they choose loyalty over exit and voice.

While the closest thing to law school protests I can think of were at the University of Virginia a few years ago by some 3Ls who were talked out of attending a 0L function wearing t-shirts describing how much debt they had with no jobs, the only serious example of university students choosing voice that I can think of weren’t law students but were the campus Occupiers last year, mostly at California’s public universities. It’s telling that they were almost exclusively public university students, and they perceived the states’ decisions to cut the subsidies to their universities as abandoning an important, job-creating public institution. They weren’t concerned about spending on frivolous outlays like climbing walls, and they certainly weren’t going to ask whether jobs could be created without sending everyone to residential colleges. The protesters actually appear slightly conservative, not that the six-figure salaried Lt. Pike thought that while he was pitilessly pepper-spraying non-threatening protesters. The same sentiment goes for law schools: No one is demanding spending cuts, except those who aren’t applying, and they’re not going to come back when “November 1st” comes around.

For example, when Faulkner University increased its tuition by 43.1 percent over inflation in 2007, 22.8 percent in 2008, and 10.1 percent in 2009? No protest. New England School of Law increased its tuition by more than 15 percent two years in a row. Again, no protest. UC-Irvine might be a public-in-name-only law school whose students know that they’ll never receive any state subsidies, and its resident students paid $43,000 last year and don’t care.

Things are different today, and maybe the Faulkners and New Englands probably couldn’t get away with doubling their tuitions if they wanted to, but since law students don’t set price ceilings on how much they’re willing to pay, and given that they (wrongly believe they) are powerless once they enroll, they don’t have many options. They can drop out (exit), or they can demand transparent employment data, though that doesn’t address their personal circumstances so isn’t much of a voice.

But they won’t organize, and the students who are cunning enough to do so aren’t applying anymore. I fear that law students have lost their chance for self-help. From now on law schools will be admitting a combination of people savvy enough to play the scholarship game and people law schools know aren’t reasonable consumers, whether judges think they are or not.

(8)  Law schools have bondholders.

Unlike their graduates, law schools have some options for paying back the money they owe to their lenders. They are also allowed to file bankruptcy. Rest assured, law schools, particularly the free-standing ones, that are under their creditors’ thumbs are not going to announce large revenue cuts. For the free-standers, large tuition retrenching is more likely to occur after a Chapter 11 filing, and schools attached to universities are more likely to just be shut down by their central administrations once they realize that it’s not profitable anymore.

(9)  Speaking of which, most law schools take their orders from central universities that have their own priorities, e.g. profiting from law students.

Remember what happened to the former dean of the University of Baltimore Law School, Philip Closius, when he told the ABA that the university was hauling away 45 percent of the law students’ tuition and state subsidies for non-law school purposes? Central administrators know that students will pay what they ask, and when it’s no longer worthwhile, they’ll just close the program.

(10)  Law students are publically subsidized.

The NLJ article mentioned this, but it alone should tell us that we’re not in a “101” market, but it had to be said.


From now on, do not be surprised that average law school tuition is increasing even though applicants are not. It would take an unusual set of circumstances for any one law school to voluntarily cut its tuition and still expect to survive.

Class of 2015 Law Grads Will Have Six-Figure Earnings after All

Certainly that’s what the IRS will tell them in 2035 when ED cancels their loan balances on IBR. Of course it won’t be real income; it’s non-negative income that they’ll never see but will have to pay income tax on nonetheless. Don’t worry though, after they wipe out their savings and take second mortgages on their houses (they will own houses, right?) they will learn the true value of higher education, to say nothing of the Social Security system they will depend on into their dotage.

This joke popped into my mind when the powers that be at the Federal Reserve opened their ecclesiastic doors and told us that six-figure student loan debt isn’t a problem and certainly not a national crisis. Not that these same folks have any credibility after ignoring an $8 trillion land bubble and their mandate to ensure full employment over price stability. That doesn’t mean they’re wrong, but it does mean we get to laugh and hurl fruit at their expensive robes.

And laugh we will, for instance, when Zero Hedge plants a FRED graph of government-held nonrevolving debt growth, and proclaims, “Please mark your calendars accordingly as yesterday [August 7, 2012] the Chairman just guaranteed that student loans will be cause for the next ‘financial stability issue.'” (Emphasis original). Funny, yes; accurate, no.

Rather, it’s ED cutting its own loans and relieving banks of their FFELP loans, which transforms them into Direct Loans. Here’s the amount of government-held nonrevolving debt to GDP (bottom), all other nonrevolving debt to GDP (middle), and all nonrevolving debt to GDP (top).

All other types of nonrevolving debt are dropping as we’d expect when everyone’s trying to pay down their debts simultaneously, but mostly it’s government debt growing and taking up a larger share of total nonrevolving debt.

So why is the government issuing and buying all these loans?

(1)  Deficit reduction shell-gaming. When the government makes interest on your student loans, it “doesn’t have to raise taxes,” meaning the federal student loan program’s purpose has quietly shifted from “making college affordable” to secret, misleadingly voluntary taxes that allow politicians to avoid discussing who should actually pay for high per capita health care costs, to say nothing of all those aircraft carriers and air-conditioned tents in Afghanistan. Issuing a guaranteed loan is also a risk-free way for banks to make money—which they do—and the federal government wants in on that. Don’t worry, though. At some point in the next decade the government will tell you that the only way to bring the deficit under control is by making you pay VAT just to buy shoes.

(2)  Bank bailout. If the government guarantees a loan, cancels the guarantee, and then allows the debtor to discharge the loan in bankruptcy, the bank gets hosed. The benefit of buying up the loans is it takes that risk off the banks’ books. Remember, guaranteed loans are pre-TARPed, and direct loans are Auto-TARPing in that the government bails itself out by raising taxes to cover shortfalls to its creditors, something banks can’t do.

(3)  Giving borrowers better terms? Maybe, but FFELP loans have the same options as Direct Loans, e.g. they’re just as eligible for IBR.

And what of IBR, which opened this discussion? EduBubble intelligently points out that IBR socializes the debt. Not only do debtors pay taxes on their canceled debts but the revenue shortfalls must be compensated by everyone’s taxes, so debtors pay twice, once for their canceled student debts and again for others’ student debts. The latter isn’t going to be a big chunk of anyone’s tax bills, but it’ll be used as a pretext to enact poverty 1.0 taxes like VAT.

But let me soothe you: VAT is a political non-starter. Sure, Japan just doubled its VAT to 10 percent by 2015 to “reduce its deficit” (it won’t), but that country is run by masochists. In the U.S. of A., the nation’s elderly will descend on Washington like unpaid mercenaries if it tries to do something so stupid as make them pay sales taxes on their Social Security benefits. No, I suspect that by 2025 or so political gridlock caused by the taxes-on-rich-people-are-the-second-evilest-thing-in-the-history-of-evil caucus will cause our friends at the Fed to finally monetize the debt by printing money, which the taxes-on-rich-people-are-the-second-evilest-thing-in-the-history-of-evil caucus considers the evilest thing in the history of evil. Heckuva job evil-haters.

This comes as good news for our class of 2015 law grads, for the inflation will erode their debts, and they’re going to need it because almost paradoxically one of the biggest engines of inflation (the reduction of purchasing power of goods and services for the same nominal currency) is wage inflation (the reduction of purchasing power of labor for the same nominal currency). Given that we now live in the era of perpetual McJobs, here’s the hourly wage for three possible categories for underemployed law grads: retail, manufacturing, and construction over the years (2012 $).

Average Hourly Earnings of Production and Nonsupervisory Employees: Retail Trade

Average Hourly Earnings of Production and Nonsupervisory Employees: Manufacturing

Average Hourly Earnings of Production and Nonsupervisory Employees: Manufacturing

So what’s $20.00/hour worth? In full-time annual salaries that’s $41,600. Naturally, this excludes income taxes, payroll taxes, sales taxes, property taxes, health care taxes, rents to landowners, rents to intellectual property holders, costs for subsidizing imports, student loan payments, pollution costs, commuting costs, and global warming costs.

Where does this leave our folks who don’t see student debt as a crisis? Aside from Chairman Bernanke, we have two contributions: Eric Kelderman, “Student Debt Is Growing but Is Not a National Crisis, Speakers Say,” Chronicle of Higher Education, and Tyler Kingkade, “Six-Figure Student Loan Debt Reviewed in Study by Mark Kantrowitz, Showing Rapid Growth in Past Decade,” Huffington Post.

Starting with Kantrowitz:

“[News articles about students graduating with six-figure debt levels] have shock value and sensationalize the student debt problem, but the borrowers depicted in these stories are not representative of typical college graduates,” Kantrowitz writes, going on to add “Nevertheless, much can be learned by examining extreme examples. Extrema can help identify the strengths and weaknesses of the student loan system.”

In an amusing note he tucks in his paper, Kantrowitz acknowledges that he’s only talking about people who graduate with $100,000+, not people who have that amount. He does, however, have the decency to advocate for allowing the discharge of student loans, but that’s as far as he’s willing to go because arguing that the Direct Loan Program is probably doing more harm than good means arguing himself out of a job. Can’t have that. It’s much easier to wag fingers at families and say it’s their fault the government has given up on creating living wage jobs for young people and offers them a higher education system that essentially requires students to “buy” their jobs with time and debt dollars. A hundred years ago they called this “graft”; today, they call it “getting ahead,” or “upward mobility.”

The senior economist for the Federal Reserve Bank of Kansas City, whom the Chronicle reports on, Kelly D. Edmiston, is equally unhelpful.

“The typical student borrower is not in crisis,” … [T]he median student debt—the middle range for all borrowers—is less than $14,000 … The average student debt is significantly higher, at more than $24,000, due to the 25 percent of borrowers who owe at least $30,000 for their college education. Still, another quarter of student borrowers owe less than $6,000, Mr. Edmiston found, and less than 3 percent have debt exceeding $100,000.

Elsewhere I think Edmiston misses the meaning of the default rates, as more careful Fed economists analyzed earlier this year, but the point is how the dialogue has now played out since it began a couple years ago.

Debtors and Friends: “Unpayable debt and underemployment suck hosewater.”

Establishment: “…”

Debtors and Friends: “Really, unpayable debt and underemployment suck hosewater.”

Establishment: “…”

Debtors and Friends: “Do we have to set up tents in parks? Unpayable debt and underemployment suck hosewater.”

Media: “These people have lots of debts, some graduate with more than six-figures into glutted labor markets.”

Establishment: “Hm. Let’s see. Ah, according to my research only a few of you have an arbitrarily high amount of debt (say $100,000+) and since that won’t topple the economy—not that we have any credibility predicting that—we can ignore you. You’re all ants in a glass case as far as we’re concerned.”

Liberal Establishment: “Most of you will pay those loans back anyway, and we don’t care if that reduces your standard of living compared to earlier generations. Some jobs and a little wage inflation will solve all your problems. The real problem is people with large amounts of underwater mortgages, even though they can simply mail their house keys to the mortgagees and discharge the deficiencies in Chapter 7. You need to make better arguments.”

Three responses:

(1)  As Michael Hudson says, Debts that cannot be repaid, will not be repaid. Our 2015 grads will not repay their debts, IBR or no. Nor does it matter if it’s 30 million debtors or just one million. If the debts can’t be repaid, that’s a problem. I may not write about (or even think a lot about) prison abuse or drone strikes, but that doesn’t mean that I lack the compassion to form political opinions about the victims when I do read about them. It’s one thing to say that we as individuals don’t have the bandwidth to care about every single problem in the world equally; it’s another to say that because one problem is small compared to others, we don’t have to care about those suffering from it.

(2)  No, student debt isn’t exactly like the housing bubble, but that doesn’t settle the issue. If the Great Depression was like a spinal fracture, and the housing bust a femur fracture, then student debt is like anemia. Defaults, negative amortization, accounting shortfalls, IBR cancellations, overpriced educations, credential inflation, and opportunity costs of schooling will sap the economy’s strength if nothing is done. This is the benefit to the government of Auto-TARPing the loans: the losses are hidden.

(3)  Remember whom you are dealing with. Student debtors are an easy constituency to mobilize, and they are no less sympathetic to others who are suffering, e.g. underwater homeowners. Alienating them with condescension leaves political capital on the table for others to use. Like extremists.

The takeaway for our 2015 law grads is that the Establishment has spoken: Until the Monetary Miracle of ’25 and IBR cancellation of ’35, you will be an “extrema” for arrogant social scientists’ curiosity. Expect low wages and even less sympathy from the public. You are on your own.

Original Article: ‘The Juris Doctor is ‘Versatile’ Thanks Mainly to Numerous Logical Fallacies’ on the Am Law Daily

The Juris Doctor is ‘Versatile’ Thanks Mainly to Numerous Logical Fallacies,”

…can be found on the Am Law Daily.

In other news, there won’t be many new posts (to the extent I have time to churn them out) as I’m committing myself to updating the law school tuition data page. It can’t be done at once, so I’m doing it piecemeal. I’m going in reverse order and am up to Virginia.

For you, though, I’m showcasing one of those songs that’s been in my head for years but couldn’t place it. I heard it my local watering hole and the bartender told me what it was.

In the Dog Days of Global Warming Summer, the ABA Speaks

ABA President Names Task Force on the Future of Legal Education,” ABA Now

Debra Cassens Weiss, “No Fudging: Revising Standards Bars Law Schools from Publishing Misleading Consumer Info,” ABA Journal

On reading government white papers, one of my graduate school professors said, “It’s not what they’re thinking, it’s what they want you to think they’re thinking.” This characterizes what happens in August when the ABA House of Delegates holds its annual meeting, but the ABA announced two things: (1) concurring with the Section of Legal Education on its revised transparency standards, with sanctions, and (2) a new task force on the future of legal education.

The new standards are what they are. I’ve looked through the data and am surprised that so few people didn’t return the surveys at all (<5%, but the real story is the Puerto Rican law schools that either haven’t reported to the ABA or put little effort in doing so). As I showed last week, there are some statistical tools one can use to determine if people who work at law firms tend to actually be licensed attorneys and not paralegals or janitors. The latter would probably pay well, but now I’m just being cynical. And “Business & Industry” is as worthless a category as it ever was.

As for the task force, its got its work cut out for it. We’ve seen the Massachusetts State Bar Association bend over backwards to avoid suggesting that any of the state’s law schools close, consolidate, or reduce their enrollment to meet the state’s needs. In the end, though, there’s still an unwillingness to cut losses, by which I mean talking straight to underemployed recent (and not-so-recent) graduates and conceding that their law degrees are pretty much worthless. They’re unlikely to work in professional white-collar jobs absent serious policy reform, and they can put their loans on Income-Based Repayment so they can just go away.

If I recall, I don’t think I believed the ABA could put together any transparency requirements, so that’s good for them. However, I doubt the task force will recommend state bar authorities simply require undergraduate legal education for licensing rather than the current graduate-level one, reforming or abolishing the Direct Loan Program, revising the bankruptcy code, and some kind of contrition regarding the consequences of its needlessly lax accreditation standards.

For example, over the weekend, the Oregonian jumped onto the law school-trashing bandwagon and it even got a quote from New England School of Law dean John O’Brien, whose mentality reflects the ABA’s:

“It’s not the ABA’s job to police the number of law schools,” O’Brien said. “Law schools are like other businesses. Ultimately, that’s what they are. If there are people who feel there is a void that needs to be filled around the country, the process is to apply for ABA approval. If you meet those standards, you get approved.”

Even though the ABA could tighten bar passage requirements to ensure that law schools weren’t frivolously enrolling students on government loans, they don’t have to because they’re businesses in the “unregulated” market. For instance, why the ABA re-provisionally accredited the University of La Verne when barely half of its graduates passed the California bar last year (less than half if you exclude graduates who took other states’ bars instead) is colossal regulatory failure. The aforementioned Puerto Rico law schools appear to be failure factories, not that they send data to the ABA.

Point is, if the task force is serious, it’s going to have to start by justifying the La Vernes of the system and why it keeps accrediting them. If they’re “businesses” then why should they profit on debt?