Monthly Archives: May 2012

Should Everyone Go To College?

Well, I’m back. I was in Pittsburgh late last week for a memorial service for my Dad. And I spent the long holiday weekend doing not much more than running, eating and drinking — and taking advantage of the early summer hot and sunny weather here in NE Ohio.

So I’m back at it this early a.m.

And I noticed over the weekend some pundits opining in national forums on issues involving education. That good. Quality education is the driver for our informed democracy and for our economic prosperity in what really is now a global economy. But I’m slowly and somewhat reluctantly coming to the view that attending college isn’t for everyone.

One reason is that clearly not everyone is prepared for college based on their high school achievements. [Or lack thereof.] Here’s from an AP story:

Each year, an estimated 1.7 million U.S. college students are steered to remedial classes to help them catch up and prepare for regular coursework. But a growing body of research shows that the courses are eating up time and money, often leading not to degrees but to student-loan hangovers.

The expense of remedial courses, which typically cost students the same as regular classes but don’t fulfill degree requirements, run about $3 billion annually, according to new research by Complete College America, a Washington-based national nonprofit working to increase the number of students with a college degree.

The group says remedial classes are largely failing the nation’s higher-education system at a time when student-loan debt has become a presidential campaign issue. Meanwhile, lawmakers in at least two states have pushed through changes, and numerous institutions are redesigning the courses.

Clearly, the cost of getting a college education has become an important issue, one that will play out eventually during the fall elections. And it becomes an even bigger issue and concern if students go into debt while not obtaining a degree.

Related is the issue of whether everyone attending college is gaining the skills that employers are demanding these days. Getting a quality education just for the sake of being better educated should have value. Yeah, I’ll admit it. I’m a fan of the liberal arts. But it’s becoming tougher to justify if you are facing years of debt and no job, or one that may not require a college degree. [Assuming that you even graduate.] Here’s Robert Samuelson opining in WaPo, “It’s time to drop the college-for-all crusade“:

The college-for-all crusade has outlived its usefulness. Time to ditch it. Like the crusade to make all Americans homeowners, it’s now doing more harm than good. It looms as the largest mistake in educational policy since World War II, even though higher education’s expansion also ranks as one of America’s great postwar triumphs.

Consider. In 1940, fewer than 5 percent of Americans had a college degree. Going to college was “a privilege reserved for the brightest or the most affluent” high-school graduates, wrote Diane Ravitch in her history of U.S. education, “The Troubled Crusade.” No more. At last count, roughly 40 percent of Americans had some sort of college degree: about 30 percent a bachelor’s degree from a four-year institution; the rest associate degrees from community colleges.

Starting with the GI Bill in 1944, governments at all levels promoted college. From 1947 to 1980, enrollments jumped from 2.3 million to 12.1 million. In the 1940s, private colleges and universities accounted for about half. By the 1980s, state schools — offering heavily subsidized tuitions — represented nearly four-fifths. Aside from a democratic impulse, the surge reflected “the shift in the occupational structure to professional, technical, clerical and managerial work,” noted Ravitch. The economy demanded higher skills; college led to better-paying jobs.

College became the ticket to the middle class, the be-all-and-end-all of K-12 education. If you didn’t go to college, you’d failed. Improving “access” — having more students go to college — drove public policy.

We overdid it. The obsessive faith in college has backfired.

For starters, we’ve dumbed down college. The easiest way to enroll and retain more students is to lower requirements. Even so, dropout rates are high; at four-year schools, fewer than 60 percent of freshmen graduate within six years. Many others aren’t learning much.

In a recent book, “Academically Adrift,” sociologists Richard Arum and Josipa Roksa report that 45 percent of college students hadn’t significantly improved their critical thinking and writing skills after two years; after four years, the proportion was still 36 percent. Their study was based on a test taken by 2,400 students at 24 schools requiring them to synthesize and evaluate a block of facts. The authors blame the poor results on lax academic standards. Surveyed, one-third of the same students said that they studied alone five or fewer hours a week; half said they had no course the prior semester requiring 20 pages of writing.

Still, most of these students finished college, though many are debt-ridden. Persistence counts. The larger — and overlooked — consequence of the college obsession is to undermine high schools. The primacy of the college-prep track marginalizes millions of students for whom it’s disconnected from “real life” and unrelated to their needs. School bores and bothers them. Teaching them is hard, because they’re not motivated. But they also make teaching the rest harder. Their disaffection and periodic disruptions drain teachers’ time and energy. The climate for learning is poisoned.

That’s why college-for-all has been a major blunder. One size doesn’t fit all, as sociologist James Rosenbaum of Northwestern University has argued. The need is to motivate the unmotivated. One way is to forge closer ties between high school and jobs. Yet, vocational education is de-emphasized and disparaged. Apprenticeship programs combining classroom and on-the-job training — programs successful in Europe — are sparse. In 2008, about 480,000 workers were apprentices, or 0.3 percent of the U.S. labor force, reports economist Robert Lermanof American University. Though not for everyone, more apprenticeships could help some students.

The rap against employment-oriented schooling is that it traps the poor and minorities in low-paying, dead-end jobs. Actually, an unrealistic expectation of college often traps them into low-paying, dead-end jobs — or no job. Learning styles differ. “Apprenticeship in other countries does a better job of engaging students,” says Lerman. “We want to diversify the routes to rewarding careers.” Downplaying these programs denies some students the pride and self-confidence of mastering difficult technical skills, while also fostering labor shortages.

There are plenty of reformers out there these days with ideas about improving education. In fact, that has kinda become a growth industry since the business community jumped into the education game in the early 1980s with the idea that you could run a school as you would a profit center or a division of a larger business. Not.

So perhaps the time has come to question whether college is right for everyone.



Micah True: Run Free

Since my Dad died last week, I’ve been thinking a lot about life and death — about how I want to spend my days and then exit when my life clock strikes midnight.  And many of these thoughts surface while I’m running, especially when I’m hitting the concrete in the pitch black of the early a.m.

Yesterday while downing my first double Jameson, I read a story in the NYT that profiled a man — a runner — known as Micah True. His life and death provides an inspiring look at how an individual can chart his or her own course in life, make a real difference to others, and then leave behind a legacy defined by friendships and accomplishments.

Here’s an excerpt from the story by Barry Bearak, “Caballo Blanco’s Last Run: The Micah True Story“:

GILA HOT SPRINGS, N.M. — Micah True went off alone on a Tuesday morning to run through the rugged trails of the Gila Wilderness, and now it was already Saturday and he had not been seen again.

The search for him, once hopeful, was turning desperate. Weather stoked the fear. The missing man was wearing only shorts, a T-shirt and running shoes. It was late March. Daytimes were warm, but the cold scythed through the spruce forest in the depth of night, the temperatures cutting into the 20s.

For three days, rescue teams had fanned out for 50 yards on each side of the marked trails. Riders on horseback ventured through the gnarly brush, pushing past the felled branches of pinyon-juniper and ponderosa pine. An airplane and a helicopter circled in the sky, their pilots squinting above the ridges, woodlands, river canyons and meadows.

“We’re in the middle of nowhere, and this guy could be anywhere,” Tom Bemis, the rescue coordinator appointed by the state police, said gloomily. He was sitting in a command center, marking lines on a map that covered 200,000 acres. Some 150 trained volunteers were at his disposal, and dozens of others were there too, arrived from all over the country, eager and anxious, asking to enlist in the search.

“Coming out of the woodwork,” Bemis said wryly.

Not only did Micah True have loyal friends, but he also had a devoted following. At age 58, he was a mythic figure, known by the nickname Caballo Blanco, or White Horse. He was a famous ultrarunner, competing in races two, three or four times as long as marathons. The day he vanished, he said he was going on a 12-mile jaunt, for him as routine as a lap around a high school track.

But True’s mythic renown owed less to his ability to run than to his capacity to inspire. He was a free spirit who survived on cornmeal, beans and wild dreams, aloof to the allure of money and possessions. He lived in the remote Copper Canyons of northern Mexico to be near the reclusive Tarahumara Indians, reputed to be the greatest natural runners in the world.

His story was exuberantly molded into legend in the 2009 best-seller “Born to Run” by Christopher McDougall. Caballo Blanco, however private and self-effacing, was suddenly delivered to the world as a prophet, “the lone wanderer of the High Sierras.” To many, he represented the road not taken, a purer path, away from career, away from capitalism, away from the clock.

Micah True lived life his way and by his own standards. And he did it essentially “off the grid.” Good for him.

And even if you are not interested in True’s life, or in long-distance running, this article is worth reading. If you believe that there is no excellent writing in newspapers these days — or that long-form journalism is dead — this article will challenge those notions.

Here’s another excerpt:

MICAH TRUE’S CORPSE, encased in a body bag and draped over a brown mule, was taken through the forest and out to the main trailhead in midafternoon on Sunday, April 1. Maria Walton ran up a slope to meet it, calling out, “I love you,” and kissing the end of the bundle that appeared to be the feet.

Just then, a heavy wind began to blow. Dirt spun in the air. A hearse had been parked in an adjacent lot since morning, and the driver, dressed in a coat and tie, looked away to shield his eyes.

The mule was slowly led to the vehicle, and the body bag was lifted through the open door at the rear. Walton insisted that Guadajuko be permitted a farewell, cradling the dog in her arms and taking him over. “We’re going to see Daddy, your best buddy,” she said, sobbing.

Ray Molina, haggard and exhausted, hugged Walton and then leaned against his old Mercedes and talked about finding the corpse. “Micah was bloodied up, so I think he took a tumble and then a hypothermic night did him in,” he said.

Mike Barragree, an investigator for the state medical examiner’s office, had gone with the team that reclaimed the body. He speculated that “some sort of cardiac event” was the likely cause of death, and that turned out to be correct: idiopathic cardiomyopathy, a heart ailment.

The search and recovery mission was finally over. The remembrances had already begun. The evening before, Walton and Scott Leese and many of the Mas Locos hung out at a campground that also had a few small cottages. The moon was a half-circle. The stars were abundant. Someone had thought to buy beer.

For them, this was a requiem for a dead friend. They ate tortillas and eggs and canned stew, heating the food on an old white stove and subduing their sorrow with laughter. They each had a favorite Caballo Blanco story to tell, or two or three. The past flooded into the present.

Above all, their friend wanted to be authentic, they said, and no one could doubt that he had been. This was no small thing.

His death was terribly sad, and yet there was also perfection about it.

Micah True died while running through a magnificent wilderness, and then many of his closest friends came together to search for him, stepping through the same alluring canyons and forests and streams, again and again calling out his name.

All in all, not a bad way to go.


A Commencement Address Worth Listening To

One of the many things I fret about these days is the fact that many young people can no longer afford a college education, and that there are far too few quality jobs for those who do manage to get a diploma. Without putting too fine a point on it, if those trends continue, as a nation we’re f*cked.

Now I could take the next hour or so and expand on this issue as I have in this space previously. But since it is another perfect day weather-wise here in NE Ohio, I’ll let Robert Reich do the heavy wordsmithing.  Reich is a former secretary of labor and current professor of public policy at the University of California at Berkeley. He opines on The Huffington Post, “The Commencement Address That Won’t Be Given“:

Members of the Class of 2012,

As a former secretary of labor and current professor, I feel I owe it to you to tell you the truth about the pieces of parchment you’re picking up today.

You’re f*cked.

Well, not exactly. But you won’t have it easy.

First, you’re going to have a hell of a hard time finding a job. The job market you’re heading into is still bad. Fewer than half of the graduates from last year’s class have as yet found full-time jobs. Most are still looking.

That’s been the pattern over the last three graduating classes: It’s been taking them more than a year to land the first job. And those who still haven’t found a job will be competing with you, making your job search even harder.

Contrast this with the class of 2008, whose members were lucky enough to get out of here and into the job market before the Great Recession really hit. Almost three-quarters of them found jobs within the year.

You’re still better off than your friends who didn’t graduate. Overall, the unemployment rate among young people (21 to 24 years old) with four-year college degrees is now 6.4 percent. With just a high school degree, the rate is double that.

But even when you get a job, it’s likely to pay peanuts.

Last year’s young college graduates lucky enough to land jobs had an average hourly wage of only $16.81, according to a new study by the Economic Policy Institute. That’s about $35,000 a year — lower than the yearly earnings of young college graduates in 2007, before the Great Recession. The typical wage of young college graduates dropped 4.6 percent between 2007 and 2011, adjusted for inflation.

Presumably this means that when we come out of the gravitational pull of the recession your wages will improve. But there’s a longer-term trend that should concern you.

The decline in the earnings of college grads really began more than a decade ago. Young college grads with jobs are earnings 5.4 percent less than they did in the year 2000, adjusted for inflation.

Don’t get me wrong. A four-year college degree is still valuable. Over your lifetimes, you’ll earn about 70 percent more than people who don’t have the pieces of parchment you’re picking up today.

But this parchment isn’t as valuable as it once was. So much of what was once considered “knowledge work” — the kind that college graduates specialize in — can now be done more cheaply by software. Or by workers with college degrees in India or East Asia, linked up by Internet.

For many of you, your immediate problem is that pile of debt on your shoulders. In a few moments, when you march out of here, those of you who have taken out college loans will owe more than $25,000 on average. Last year, ten percent of college grads with loans owed more than $54,000. Your parents have also taken out loans to help you. Loans to parents for the college educations of their children have soared 75 percent since the academic year 2005-2006.

Outstanding student debt now totals over $1 trillion. That’s more than the nation’s total credit-card debt.

The extraordinary rise in student debt is due to two related facts: the cost of a college education continues to increase faster than inflation, and state and local spending per college student continues to drop — this year reaching a 25-year low.

But this can’t go on. If unemployment stays high for many years, if the wages of young college grads continue to fall, if the costs of college continue to rise and state and local spending per college student continues to drop, and if the college debt burden therefore continues to explode — well, you do the math.

At some point in the not-too-distant future these lines cross. College is no longer a good investment.

That’s a problem for you and for those who will follow you into these hallowed halls, but it’s also a problem for America as a whole.

You see, a college education isn’t just a private investment. It’s also a public good. This nation can’t be competitive globally, nor can we have a vibrant and responsible democracy, without a large number of well-educated people.

So it’s not just you who are burdened by these trends. If they continue, we’re all f*cked.


And true.

My Dad: A Modest Remembrance

Throughout my life, I’ve been fortunate in so many ways that I couldn’t even begin to list them all in this space. One, though, is the fact that I made it to almost age 65 with both of my parents alive, active and in relatively good health. That changed last night.

One of my three brothers, Tom, called me from Pittsburgh and told me our Dad was dead. He sat down with my Mom for dinner, slumped sideways, and died immediately, apparently from a heart attack. He was 93.

Intellectually, I knew that someday I would be on the receiving end of that call. But emotionally, that doesn’t make it any easier.

And I’m sure my Dad, Bob Jewell, wouldn’t want me to write this and post it in any public venue. He was so modest and unassuming that he would never want to be the center of attention, even in connection with his own death. Yet during my run this morning, I decided it was important to acknowledge his passing and in some small way celebrate his life. And who knows. Maybe after I labor over a few hundred words here, I’ll feel better. Or not.

Like many of his generation, he lived a quietly remarkable — yet unremarkable — life. And I say that with all possible admiration and gratitude.

He came of age in the Depression, and he was part of the The Greatest Generation. He enlisted after Pearl Harbor in the Army Air Corps and became a bomber pilot, dropping some heavy metal on our enemy in the Pacific. After the war he returned to the community where he grew up in Pittsburgh, married his childhood sweetheart, gained and maintained a solidly middle class lifestyle through hard work and the kind of personal integrity you don’t always see in business these days, and became head of a family consisting of my Mom, four sons and our wives, and nine grandchildren.

We’ll get together next week in Pittsburgh for a modest remembrance. That’s what he wanted.

And he’ll be remembered as a kind, caring and loving person, a dedicated husband and family man — and the best possible father.

Now I feel better.


Replacing Full-Time Jobs With Unpaid Internships

I know that plenty of graduates are moving this month from the Ivory Tower to the Real World without a job. That’s disappointing, scary and a reflection of the fact that we are still in the grip of a jobless economic recovery. And many graduates are carrying a shitload of student debt obligations from campuses along with a diploma.

So, unpaid internship anyone?

For many, the answer is yes. And I was at a meeting last week Inside the Beltway where many attending opined that this is a positive trend: a way for former students to gain some experience before striking a deal with an employer.


Here’s an interesting NYT article, “Jobs Few, Grads Flock to Unpaid Internships“:

Confronting the worst job market in decades, many college graduates who expected to land paid jobs are turning to unpaid internships to try to get a foot in an employer’s door.

While unpaid postcollege internships have long existed in the film and nonprofit worlds, they have recently spread to fashion houses, book and magazine publishers, marketing companies, public relations firms, art galleries, talent agencies — even to some law firms.

Melissa Reyes, who graduated from Marist College with a degree in fashion merchandising last May, applied for a dozen jobs to no avail. She was thrilled, however, to land an internship with the Diane von Furstenberg fashion house in Manhattan. “They talked about what an excellent, educational internship program this would be,” she said.

But Ms. Reyes soon soured on the experience. She often worked 9 a.m. to 9 p.m., five days a week. “They had me running out to buy them lunch,” she said. “They had me cleaning out the closets, emptying out the past season’s items.” Asked about her complaints, the fashion firm said, “We are very proud of our internship program, and we take all concerns of this kind very seriously.”

Although many internships provide valuable experience, some unpaid interns complain that they do menial work and learn little, raising questions about whether these positions violate federal rules governing such programs.

Yet interns say they often have no good alternatives. As Friday’s jobs report showed, job growth is weak, and the unemployment rate for 20- to 24-year-olds was 13.2 percent in April.

The Labor Department says that if employers do not want to pay their interns, the internships must resemble vocational education, the interns must work under close supervision, their work cannot be used as a substitute for regular employees and their work cannot be of immediate benefit to the employer.

But in practice, there is little to stop employers from exploiting interns. The Labor Department rarely cracks down on offenders, saying that it has limited resources and that unpaid interns are loath to file complaints for fear of jeopardizing any future job search.

No one keeps statistics on the number of college graduates taking unpaid internships, but there is widespread agreement that the number has significantly increased, not least because the jobless rate for college graduates age 24 and under has risen to 9.4 percent, the highest level since the government began keeping records in 1985. (Employment experts estimate that undergraduates work in more than one million internships a year, with Intern Bridge, a research firm, finding almost half unpaid.)

“A few years ago you hardly heard about college graduates taking unpaid internships,” said Ross Eisenbrey, a vice president at the Economic Policy Institute who has done several studies on interns. “But now I’ve even heard of people taking unpaid internships after graduating from Ivy League schools.”

To paraphrase the John Belushi character, Bluto,  in Animal House when told he was being kicked out of school with a GPA below 1.0: “Christ, seven years of college, down the drain.”

As a nation, our economy is heading down the drain if we can’t offer college grads and others more than an unpaid internship.

Of course, Bluto may have done OK with on. As I recall from the flick, he had an enthusiasm for food service.



Student Debt: The Next Crisis?

Sixty-two percent of Bowling Green graduates have debt that averages $31,515. Wow. That’s most likely enough to buy one of the better houses in Cleveland. Sigh.

I believe that a college education is an investment that pays off over the course of a working lifetime. And it’s an investment that pays big dividends to our economic prosperity, the strength and vitality of our communities, and to our free society.

Sadly, it’s an investment that state officials and taxpayers are starting to pull back from. And it’s becoming more and more difficult for middle- and lower-income students and their families to finance a college education without mortgaging their futures. Note to education administrators: There is a limit to how much students can — and are willing — to pay. This isn’t like hiring football and basketball coaches where money isn’t an issue.

Two excellent articles in the NYT examine the student debt crisis — while putting the spotlight on the issues involving education financing in Ohio.

Here’s from “A Generation Hobbled by the Soaring Cost of College“:

With more than $1 trillion in student loans outstanding in this country, crippling debt is no longer confined to dropouts from for-profit colleges or graduate students who owe on many years of education, some of the overextended debtors in years past. Now nearly everyone pursuing a bachelor’s degree is borrowing. As prices soar, a college degree statistically remains a good lifetime investment, but it often comes with an unprecedented financial burden.

Ninety-four percent of students who earn a bachelor’s degree borrow to pay for higher education — up from 45 percent in 1993, according to an analysis by The New York Times of the latest data from the Department of Education. This includes loans from the federal government, private lenders and relatives.

For all borrowers, the average debt in 2011 was $23,300, with 10 percent owing more than $54,000 and 3 percent more than $100,000, the Federal Reserve Bank of New York reports. Average debt for bachelor degree graduates who took out loans ranges from under $10,000 at elite schools like Princeton and Williams College, which have plenty of wealthy students and enormous endowments, to nearly $50,000 at some private colleges with less affluent students and less financial aid.


“If one is not thinking about where this is headed over the next two or three years, you are just completely missing the warning signs,” said Rajeev V. Date, deputy director of the Consumer Financial Protection Bureau, the federal watchdog created after the financial crisis.

Mr. Date likened excessive student borrowing to risky mortgages. And as with the housing bubble before the economic collapse, the extraordinary growth in student loans has caught many by surprise. But its roots are in fact deep, and the cast of contributing characters — including college marketing officers, state lawmakers wielding a budget ax and wide-eyed students and families — has been enabled by a basic economic dynamic: an insatiable demand for a college education, at almost any price, and plenty of easy-to-secure loans, primarily from the federal government.

The roots of the borrowing binge date to the 1980s, when tuition for four-year colleges began to rise faster than family incomes. In the 1990s, for-profit colleges boomed by spending heavily on marketing and recruiting. Despite some ethical lapses and fraud, enrollment more than doubled in the last decade and Wall Street swooned over the stocks. Roughly 11 percent of college students now attend for-profit colleges, and they receive about a quarter of federal student loans and grants.

In the last decade, even as enrollment at state colleges and universities has grown, some states have cut spending for higher education and many others have not allocated enough money to keep pace with the growing student body. That trend has accelerated as state budgets have shrunk because of the recent financial crisis and the unpopularity of tax increases.

Nationally, state and local spending per college student, adjusted for inflation, reached a 25-year low this year, jeopardizing the long-held conviction that state-subsidized higher education is an affordable steppingstone for the lower and middle classes. All the while, the cost of tuition and fees has continued to increase faster than the rate of inflation, faster even than medical spending. If the trends continue through 2016, the average cost of a public college will have more than doubled in just 15 years, according to the Department of Education.

And here’s the policy issue:

From 2001 to 2011, state and local financing per student declined by 24 percent nationally. Over the same period, tuition and fees at state schools increased 72 percent, compared with 29 percent for nonprofit private institutions, according to the College Board. Many of the cuts were the result of a sluggish economy that reduced tax revenue, but the sharp drop in per-student spending also reflects a change: an increasing number of lawmakers voted to transfer more of the financial burden of college from taxpayers to students and their families. (Local funding is a small percentage of the total, and mostly goes to community colleges.)

“To say that tuition goes up because the state doesn’t pay enough money, well, that is the taxpayers’ money,” said Ohio’s governor, John Kasich, a Republican elected in 2010 whose budget included cuts to higher education because of the end of federal stimulus money.

Donald E. Heller, an expert on higher education, said elected officials in both parties had figured out that colleges were one of the few parts of state government that could raise money on their own. If lawmakers cut state financing, the schools could make it up by raising tuition.

And in Ohio:

Ohio’s flagship university, Ohio State, now receives 7 percent of its budget from the state, down from 15 percent a decade ago and 25 percent in 1990. The price of tuition and fees since 2002 increased about 60 percent in today’s dollars.

The consequence? Three out of five undergraduates at Ohio State take out loans, and the average debt is $24,840.

If any state is representative of the role government has played in the growth of student debt, Ohio makes a good candidate. While other states have made steeper cuts in recent years because of the recession, Ohio has been chipping away at it far longer. It now ranks sixth from the bottom in financing per student, at $4,480.

In the late 1970s, higher education in Ohio accounted for 17 percent of the state’s expenditures. Now it is 11 percent. By contrast, prisons were 4 percent of the state’s budget in the late 1970s; now they account for 8 percent. Federal mandates and court orders have compelled lawmakers to spend more money on Medicaid and primary education, too. Legislators could designate a greater percentage of the budget to higher education by raising taxes, but there is no appetite for that. Governor Kasich has signed a pledge not to raise taxes, as have about two dozen legislators.

Some Ohio elected officials say state colleges and universities have brought the debt problem upon themselves.

They suggest, for example, that state schools are bloated, antiquated and don’t do a good enough job graduating students or training them for the work force. Some complain about the salaries of football coaches and college presidents, like Mr. Gee, who has a compensation package of $2 million a year as president of Ohio State. Mr. Kasich questions why all state universities need to offer every major, like journalism or engineering, instead of parceling those programs among the schools.

“It’s not just inefficiencies,” said the governor, an Ohio State graduate. “It’s, ‘I want to be the best in this.’ It’s duplication of resources. It’s a sweeping change that is needed across academia.”

And here’s from the second NYT article, “Slowly, as Student Debt Rises, Colleges Confront Costs“:

In a wood-paneled office lined with books, sports memorabilia and framed posters (including John Belushi in “Animal House”), E. Gordon Gee, the president of Ohio State University, keeps a framed quotation that reads, “If you don’t like change, you’re going to like irrelevance even less.”

Mr. Gee, who is often identified with a big salary and spendthrift ways, says he has taken the quotation to heart, and he is now trying to persuade Ohio State’s vast bureaucracy, and the broader world of academia, to do the same.

At a time of diminished state funding for higher education and uncertain federal dollars, Mr. Gee says that public colleges and universities need to devise a new business model to pay for the costs of education, beyond sticking students with higher tuition and greater debt.

“The notion that universities can do business the very same way has to stop,” said Mr. Gee, who is also the chairman of a commission studying college attainment, including the impact of student debt.

College presidents across the country are confronting the same realization, trying to manage their institutions with fewer state dollars without sacrificing quality or all-important academic rankings. Tuition increases had been a relatively easy fix but now — with the balance of student debt topping $1 trillion and an increasing number of borrowers struggling to pay — some administrators acknowledge that they cannot keep putting the financial onus on students and their families.

An important issue.

And one we need to address soon — and correctly — before it becomes the next crisis.

Especially in a state like Ohio, we desperately need a skilled workforce — and the kind of quality jobs that will keep them from relocating to other areas.

Hey. Somebody has to be able to afford to buy the houses in Cleveland and elsewhere.


Oops: A $2 Billion Mistake

I’ll crawl out on the limb with a chainsaw this morning and predict that no matter how bad a day you have at work, it won’t nearly match the recent experience of Ina Drew. Drew is — or maybe by now was — the Chief Investment Officer at JPMorgan who managed [or not] the failed strategy that cost the bank and investors some $2 billion, with the meter still running.

Here’s from Reuters:

JPMorgan will move to limit the fallout from a shock trading loss that could reach $3 billion or more by parting company with three top executives involved in its costly failed hedging strategy, sources close to the matter said.

The bank – the biggest in the United States by assets – is expected to accept the resignation this week of Ina Drew, its New York-based chief investment officer and one of its highest-paid executives, in the next few days, the sources said.

Wow. Tough way to exit a job that was paying more than $15 million a year. Let’s pray she doesn’t end up at Merrill Lynch as my Wealth Creation Manager. Sigh.

What makes this story all the more interesting is the reaction by JPMorgan Chairman Jamie Dimon. Dimon has been a highly visible critic of regulations and other measures foisted on Wall Street after bankers put the world into financial meltdown mode a few years ago.

Essentially, Dimon’s reaction: “My bad.”

Here’s from the LA Times:

Without even waiting a decent interval for mourning, JPMorgan Chase Chairman Jamie Dimon launched his defense campaign over the disclosure that he presided over a $2-billion trading loss in derivatives within days of the disclosure itself, choosing the comforting confines of NBC’s “Meet the Press” for the campaign kick-off.

Dimon’s theme was essentially as follows: “Hey, everybody makes mistakes — sure, we lost $2 billion, but we’ve still got billions more, and we’ll figure out this one ourselves without the need for any further regulations, thank you.”

His argument is plainly designed to distract from the right way to think about JPM’s fiasco, which is that it’s exactly the sort of thing that regulations should forbid banks from doing, lest they destroy the financial system — again.

Dimon certainly showed supreme skill in choosing his venue. In “Meet the Press” host David Gregory he had a questioner who is expert in the honored television tradition of taking interviewees at their own level of self-esteem. Also someone who is so clueless about how banks and investment markets work that he hasn’t got the slightest idea of what questions to ask, much less how to follow up on an answer.

Anyway, I know that complaining about the Titans of Wall Street does about as much good as peeing in your sleeping bag on a cold night. It feels good — but doesn’t accomplish much.

So I’ll let William Deresiewicz do the heavy lifting this morning. Here’s from his op-ed in the Sunday NYT, “Capitalists and Other Psychopaths“:

THERE is an ongoing debate in this country about the rich: who they are, what their social role may be, whether they are good or bad. Well, consider the following. A recent study found that 10 percent of people who work on Wall Street are “clinical psychopaths,” exhibiting a lack of interest in and empathy for others and an “unparalleled capacity for lying, fabrication, and manipulation.” (The proportion at large is 1 percent.) Another study concluded that the rich are more likely to lie, cheat and break the law.

The only thing that puzzles me about these claims is that anyone would find them surprising. Wall Street is capitalism in its purest form, and capitalism is predicated on bad behavior. This should hardly be news. The English writer Bernard Mandeville asserted as much nearly three centuries ago in a satirical-poem-cum-philosophical-treatise called “The Fable of the Bees.”

“Private Vices, Publick Benefits” read the book’s subtitle. A Machiavelli of the economic realm — a man who showed us as we are, not as we like to think we are — Mandeville argued that commercial society creates prosperity by harnessing our natural impulses: fraud, luxury and pride. By “pride” Mandeville meant vanity; by “luxury” he meant the desire for sensuous indulgence. These create demand, as every ad man knows. On the supply side, as we’d say, was fraud: “All Trades and Places knew some Cheat, / No Calling was without Deceit.”

In other words, Enron, BP, Goldman, Philip Morris, G.E., Merck, etc., etc. Accounting fraud, tax evasion, toxic dumping, product safety violations, bid rigging, overbilling, perjury. The Walmart bribery scandal, the News Corp. hacking scandal — just open up the business section on an average day. Shafting your workers, hurting your customers, destroying the land. Leaving the public to pick up the tab. These aren’t anomalies; this is how the system works: you get away with what you can and try to weasel out when you get caught.

I always found the notion of a business school amusing. What kinds of courses do they offer? Robbing Widows and Orphans? Grinding the Faces of the Poor? Having It Both Ways? Feeding at the Public Trough? There was a documentary several years ago called “The Corporation” that accepted the premise that corporations are persons and then asked what kind of people they are. The answer was, precisely, psychopaths: indifferent to others, incapable of guilt, exclusively devoted to their own interests.

There are ethical corporations, yes, and ethical businesspeople, but ethics in capitalism is purely optional, purely extrinsic. To expect morality in the market is to commit a category error. Capitalist values are antithetical to Christian ones. (How the loudest Christians in our public life can also be the most bellicose proponents of an unbridled free market is a matter for their own consciences.) Capitalist values are also antithetical to democratic ones. Like Christian ethics, the principles of republican government require us to consider the interests of others. Capitalism, which entails the single-minded pursuit of profit, would have us believe that it’s every man for himself.

Better go to the garage and see if I can find my pitchfork from the last Wall Street meltdown.

Something tells me me haven’t heard the last, or the worst, about this JPMorgan fiasco.

And let’s hope some of the other Titans aren’t in the queue, waiting for their turn to say: “oops!”