Along the lines of your final sentence, I suspect a lot has to do with the outsize influence of celebrities on our society. These are people who took great risks and enjoyed great rewards, and based on their own experience tend to preach a “follow your dream” approach to life, even though this will work out similarly for only a tiny percentage of the people who follow it.
For every aspiring actress who waited on tables and eventually got a break and became a big star there are a thousand who similarly waited on tables and never got a big break and by the time they were forced to give it up they lost out on their chance to be an accountant. But you hear a lot more from the first group than from the second, which has a negative influence on societal attitudes IMO.
[I once read an interesting article by a guy who followed around for a day an up-and-coming rapper and his posse. He felt this rapper would have been a lot better off being more disciplined about his money, and mentioned it to the rapper, who replied (paraphrasing from memory) “so-and-so [big time rapper] said you need to spend money like you don’t have to worry about it”. The writer replied that so-and-so was not a Certified Financial Planner, and the rapper responded that “so-and-so sold X million records, that’s how certified he is”.
That last rejoinder stuck in my mind over the years, because I felt the rapper was making a rational point which was not nearly as idiotic as the writer portrayed it. Specifically, that the wild spending was necessary to convey the image which would help him sell more records; as such it was simply a high stakes gamble rather than a complete lack of restraint.
But that said, it was a very high stakes gamble, and I would be surprised if that guy ended up with any money put away. (I don’t recall any of the names involved.)]
This is true. My point is that for a lot of people, things work out until they don’t. So a lot of people have a body of personal experience that reinforces the idea that what they are doing is working–and even many of the ones drowning in debt would say that it is working out for them even now: they have a home and their needs are covered and when there is an emergency, they make it work. And you can’t just reject all risk, either.
I wasn’t trying to say this behavior is wise, I was just explaining why I think it’s so prevalent.
I agree completely. I’m just discussing why we see this behavior–I think there’s more to it that just “most people are morally inferior and unable to make wise choices”.
Also true. This is what I was ttrying to say above when I said that one of the problems is the social taboo against talking about these things. We all have to flounder and figure it out. Worse, we use our observations of others to figure out what we are supposed to do, and as you point out, those observations are really distorted.
I think that in the US, at least, most people could have almost anything they wanted if they were willing to devote their lives to that one thing. I have students right now who are dedicating their lives to getting a particular car–even though it may be decades in the future. There are certainly people that work for years, who shape their life and career, around getting one thing. But very few people are really willing to sacrifice everything to get one thing–for good reason. The one things is rarely worth it. But my point is that we see that Bob at work goes on a fancy vacation every year, so we think that that means fancy vacations are normal in our income bracket–that we are entitled to them. But we don’t know that Bob never eats out, lives in a less desirable location than us, keeps his cars more years than us, spends hours researching how to get good deals on travel, etc. We see everyone around us indulging in something, and we feel like that means that people in general are entitled to indulge in everything–so we do. And we think it will work out because it’s working for them.
This is true. It’s also true that what is risky for one person may be prudent for another, due to circumstances you don’t know about. People insult English majors a lot for making a poor choice to get a useless degree–but I knew I wanted to teach, I always had a plan, and majoring in English was a reasonable and prudent choice. But if I knew I hated teaching and didn’t want to go to law school, it would have been foolish. There’s even more subtle things: maybe Suzy takes a risk and starts a small business, but she knows that if she loses her savings and has to start over, she can roll with that. She’s good with being frugal and rebuilding. Maybe her friend Sally would be devastated by the loss and it would derail her whole life–so she shouldn’t.
People are kinda in a lose-lose situation. If they play it safe by being frugal all the time, they set themselves up for being scolded if they should ever complain about lack of opportunity.
But if they take a risk to improve their chances and their failure results in harsh financial consequences, then suddenly they get scolded for making a poor choice. Even if the risk they took was one they are advised to take by everyone and their mama.
I went into credit card debt while living in Miami. I only made $35K/year in my postdoc, which might be OK in Bumfuck. But it was pennies in Miami. It could cover my basic bills, but it wasn’t enough for much more than that. I wanted new furniture so I could entertain guests without feeling embarrassed, so I put it on credit. My old car constantly needed repairs and public transit wasn’t a good option, so I would whip out the card to take care of my transportation. I had a physically demanding job with hellish hours, so money that would have been diverted into my saving account instead went to take-out places.
Then I got a job offer in VA. I went more in debt to fund the expensive move.
I was able to pay down my debt within a couple of years. Having a better salary helped a whole lot, but just escaping that high cost of living hellhole went a long way.
All the risks I took worked out in my favor but they could have easily not worked out. Buying new furniture was stupid, but then again, I still have every piece and don’t plan on replacing it anytime soon. I could have stayed in Miami until I had paid down my debt, but then I would have missed an opportunity and my efforts to acquire a non-hellish job would have been thwarted by the Great Recession. Who knows? Maybe I have a job I love rather than one I merely tolerate is solely because I was unafraid to use a credit card when I was 29.
So what you said Manda Jo is true for me. My risk-taking has panned out most of the time, and the advice I give others tends to reflect this good fortune.
Yes but in the specific case we’re talking about the perceived ‘bad decision’ of racking up $60k or 80k or whatever the example* in return for an education that doesn't increase earning potential commensurately, no it's not a good idea for the govt to be funding that. Just as obviously as the answer is 'yes' to the much vaguer question 'it it a good idea for the govt to spend money educating people?' But depending which education for which people and how many 's. The examples we’re dealing with here are the pretty clear ‘no’ cases.
So what system better optimizes people who can actually benefit economically getting higher education? Since I also don’t think non-economic, philosophical arguments in favor of education justify public spending at the tertiary level. It might be desirable for govt to spend on tertiary education where it increases economic output, net of costs, so makes society overall ‘a profit’ in $'s. If it’s a $60-80k with little change in earnings potential that's clearly not worth doing, 's and cents wise. Which is not solved by the public taking the $80k hit rather than the student. If anything that makes it worse by weakening the incentive of future students to avoid such outcomes.
*the average student loan debt for grads is high $30k’s, and many find it is worthwhile in terms of the increase in earning potential due to the degree, which isn’t to say there’s no problem, but maybe worth mentioning that combination of large debt and the education doing little to increase income isn’t universal.
Here is an interesting site giving the economic value of majors.
So, college students aren’t that dumb after all. And perhaps less expensive college would mean even more go into higher paying majors.
At least some of these have obvious social value.
It also pays to have diversity in what people major in. Everyone and his dog being CS majors in 2000 wasn’t good long term. Where would we be if everyone fled education majors because they didn’t pay enough? Teachers might be a bad investment in your book, but socially I think letting teachers go to college free would be a great investment.
And not everyone can do everything. Lots (most) CS people I know would make awful teachers.
Speaking of social value, if a student chooses a vocation that maximizes the chances of personally enriching themselves, that is one thing— good for them— but as a member of the public and taxpayer I would be quick enough to support reducing or eliminating the financial burden for students of Theatre or French Literature as much as Engineering or Law-- there is always the possibility of fostering some genuine talent there-- and for athletic scholarships I like the discus throw as much as football. I do not think education is ever a poor choice in which to invest public resources. Anyway, once upon a time it was possible to put yourself through college with some sort of part-time job, so there is some crazy inflation to blame for the price tag, not necessarily poor choices.
I’d almost go further and subsidize law and STEM majors less! After all, those students should eventually get sweet salaries to repay student loans.
Inflation is part of the problem, but I think taxpayer support is way down also. And Education is at the top of the list where “conservatives” still want even more cuts.
IIRC, tuition was $83 per quarter when I attended the Univ of California.
This is my point. We’re talking about a government program. It shouldn’t be seen as a business model.
There are plenty of banks that will lend money to people who will be able to pay back the loan with future earnings.
A government program should be seen as a means of educating people who aren’t able to qualify for a regular loan but who will provide other valuable services to the community if they’re educated.
The government is not a business, and it does not/should not make Return On Investment its criterion for what to spend money on.
You’re mixing up your terms. If you give money to people, they’re not expected to pay it back, so that’s irrelevant. If you loan money to people, that’s a different matter.
If we’re giving money to people, I’d rather give it to people who have more chance to pay it forward, by using their education to make a positive contribution to society, rather than to people who are going to use it to enrich themselves.
Maybe Suzy thinks that if she loses her savings and has to start over, she can roll with that. And she might be right. But she might be wrong about that one, too. What if she loses her savings due to a medical emergency that’s no fault of her own – an accident caused entirely by somebody else, say, or a stroke with no prior indications she was at risk – and winds up, not only broke, but unable to do her previous work and with, indeed, her whole life derailed? I can think of a whole lot of other types of things that could go wrong that could mean Suzy turned out to be wrong about being able to roll with her business going broke.
For one thing, funding only the people who will then be able to get really high paying jobs would be a bad societal decision, because the society also needs a whole lot of people in the lower paying jobs. If free college is provided to people training to be lawyers but not to people training to be kindergarten teachers, we’re going to wind up with way too many lawyers and nowhere near enough kindergarten teachers.
For another, deciding in year X which kind of training will produce high earning potential in year X + 10, let alone year X + 30, is a pretty sizeable gamble on its own.
Running a society isn’t like running a business. At least, not like running a business as most people in this society currently expect them to be run.
Anyone running a business under the current system expects to be able to fire unproductive workers, and not to hire in the first place anyone who they don’t expect to be productive; as well as to tell people how to behave on the job, and if the employee doesn’t want to do what the company’s doing to leave and go someplace else. It’s entirely impractical, and in at least my HO entirely morally wrong and also pretty drastically shortsighted, to drive Grandma and Granddad and little Timmy and physically-unable-to-hold-a-job Ann and poking-around-in-the-garage-maybe-or-maybe-not-inventing-the-next-Microsoft Sal to the border and toss them out.
By that logic, no one should ever do anything. Do you find entrepreneurship just inherently unwise? Was monstro a fool to take on debt on top of debt to move for a job that might not have worked out? Was I fool to major in English and become an English teacher–which I love–instead of a math teacher, a job that is without a doubt in higher demand and easier to get?
I kind of agree with both of you - and I think that’s because there’s two different types of funding.
There's the type where the kindergarten teacher can graduate without debt because he can attend a publicly funded, affordable university- and if he truly cannot afford even the subsidized tuition, there are grants to assist him. I've got no problem with that system.
Then there's the other type of funding, where people choose whatever college they want, and the college charges whatever tuition they want and somehow the taxpayer ends up paying for it, by providing loans that are forgiven at some point because it's difficult to repay $60K* worth of loans on a $42K salary. I do have some problems with that system - I think a lot of people would make different decisions if that loan money wasn't available or didn't have the potential to be forgiven.
*Or more- it’s not uncommon for parents to actually take out parent loans and expect the students to repay them
I didn’t mean that at all. I meant that there really isn’t a category of people who can be justifiably sure they can “roll with” a failure and pull themselves out of it. (Possible exception for those who are sure their families can, and will, make them small loans of a million or so. But those people weren’t taking any genuine risk in the first place.)
We need sufficient safety net to catch the people whose risks fail. And they shouldn’t be denigrated for that failure, if we would have praised them if their risk had paid off.
One advantage of doing that would likely be that there’d be a lot more genuine entrepreneurship; as well as a lot more people doing the work they’d actually love and are actually best suited for, which would lead to the work getting done better, as well as to lower medical bills and fewer headaches both literal and metaphorical both for the people who’d get into the right jobs and for pretty near everybody else who comes into significant contact with them.