Higher education’s price-earnings ratio looks like Nevada housing circa 2007.
Jerry Bowyer, 12.16.10, 03:15 PM EST Forbes
The overwhelming cultural consensus of the post-WWII generation was that if you are middle-class, then you simply must own your own home and your children must go to college. Out of that cultural consensus emerged a complex system of tax breaks and special lending deals designed to make sure that the number of Americans who bought houses and bachelor’s degrees was as high as possible–or maybe more so.
Many people now understand that this system of tax-and-lend has created a multigenerational housing bubble. But only a few have noticed that a very similar tax-and-lend system has also created a multi-generational higher education bubble.
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Phi Beta Iota: There is good news. The smartest of the smart have been dropping out of high school, not just college, and then learning what they need to learn online and through hands-on experience. Like most bubbles, including not just the housing mortgage bubble but also the DoD acquisition bubble, the DoD private military contractor bubble, and so on, this bubble rests on fraud being permitted–a lack of accountability for outcomes. In today’s world, with transparency emergent and soon rampant, accountability is going to be a fact of life. That is a good thing.