tag:blogger.com,1999:blog-5164886390834386622.post6936764883989932586..comments2023-10-30T08:41:06.178-07:00Comments on Inside the Law School Scam: 25 words or lessLawProfhttp://www.blogger.com/profile/05174586969709793419noreply@blogger.comBlogger103125tag:blogger.com,1999:blog-5164886390834386622.post-31531982952063797332012-02-06T09:36:24.572-08:002012-02-06T09:36:24.572-08:00(a) You believe "know nothing" is a good...(a) You believe "know nothing" is a good thing in an economy run on caveat emptor? Yet, you are also arguing for efficient markets. Your argument contradictory. <br /><br />(b) I am not a Keynesian. Nor am I a free market fundamentalist. I think you are the later.. So, that may be the source of the probelm here. <br /><br />Student loans are in fact a Neoliberal solution rather than a Keynesian one to the problem of how students can finance their education. The Keynesian answer would be to have the government cover the cost rather than passing it along to private-public hybrid solutions that saddle students with debt. <br /><br />(c) Your discussion over market efficiency is absolutely strange in the context of wage stagnation and deflation. Capitalism here is working perfectly. Its reducing the cost of labor. The problem is that labor is also the consumer. The problem is not inefficient markets. Its the internal inconsistency of the argument that you can cut wages, and expect the wage earner to buy more, which capitalism requires in order to work.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-13705425185834544512012-02-06T08:46:41.853-08:002012-02-06T08:46:41.853-08:00Bruh,
Both in the public and private setting, eas...Bruh, <br />Both in the public and private setting, easy credit distorts the market and causes a boom in bad investments. That's as far as I was taking the connection. Granted, I don't understand Keynes fully, but I've always considered my lack economics theory training an asset. Too much economics training makes you forget that when it rains people get wet. <br /><br />I'd welcome the links though.terry malloynoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-19825327231354563362012-02-06T08:43:05.581-08:002012-02-06T08:43:05.581-08:00Just to be clear: A Keynesian argument would e tha...Just to be clear: A Keynesian argument would e that the government should forgive the student loan debt to stimulate the economy. It would not be "put students into student loan debt".Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-74503984098244723682012-02-06T08:40:04.007-08:002012-02-06T08:40:04.007-08:00By the way, I really do not trust someone who clai...By the way, I really do not trust someone who claims to be in finance who calls student loans a Keynesian solution to college education. Keynes has nothing to do with private debt. Its about the government borrowing for covering public expenditures in the economy. You can debate whether that's a good idea or not, but it has nothing to do with the issue being discussed, which is individuals borrowing debt essentially on the private market whether they are purchasing it from the government as a pass through entity or a private bank. The approach is simply not Keynesian. The core argument there is not that the government is expending debt to drive up economic activity through the government's borrowing powers such as building roads, or, funding education directly after borrowing from another country, etc. It is setting up loans int he private sector way, with collection processes that are private sector collection processes. This is just too big a topic to ignore the misuse of language here. <br /><br />Bruh RabbitAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-47127009034404921432012-02-06T08:33:47.162-08:002012-02-06T08:33:47.162-08:00Private debt has nothing to do with government deb...Private debt has nothing to do with government debt. Keynes did not argue that students should have to take out student loans. This is a conservative argument. Keynes would argue that the government should ensure that students do not have to get into the debt into the private the first place. The effect of government debt does not work the same way as private debt. Whenever i see people treating them the same, i instantly question their understanding of economics. The rules between countries in government debt are simply not the same as the rules between private creditors such as banks (which is how the government is acting here with student loans or the loans you take out from banks) have with you. If you conflate the two, it means you do not understand the debt issue. It would take quite a bit of time to even explain it to you here. I may come back later with some links.<br /><br />Bruh Rabbit.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-68263734566781474362012-02-06T08:25:53.555-08:002012-02-06T08:25:53.555-08:008:06
I am the guy who you thanked. Its unfortunat...8:06<br /><br />I am the guy who you thanked. Its unfortunate.<br /><br />You are describing a rentiers economy, or a parasitic, or cleptocratic one, take your pick. They each come from different economic and political schools of thought, but they mean about the same thing. Private debt in a stagnant wage or deflationary wage economy becomes a tool for parasitic "growth." In this way, we really have no grown the U.S. economy in decades (depending on how you view things- since the 60s or 70s).<br /><br /><br />The main thrust is that this is occurring throughout the economy, not just in education.<br /><br />You aren't going to get rid of such an economy by caps on student debt alone. The only solution is to take away the incentive to get into such high debt.<br /><br />There are only 4 reasonable solutions to taking away the incentives for high debt:<br /><br />(a) wage increases<br /><br />(b) restoring the social safety net (including low cost education because that would eliminate the need for debt)<br /><br />(c) risk shifting (restore bankruptcy protection, increased consumer protection in terms of contract language to prevent absurd contract provisions, etc.)<br /><br />(d) Sustainable economics rather than conservative arguments over a continuing grow the pie through excessive risk taking economics.<br /><br />Its probably not going to happen. This country is very conservative both generally, and due to political pressures of money in politics.<br /><br />Which is probably why Law Prof focuses on the student loans since he's not apparently a conservative.<br /><br />The problem with that is that it doesn't solve the cause of the parasitic relationship. It will just make people more desperate. Not less desperate because the parasitic relationship exists in every aspect of the economy.<br /><br />Unless you get at the root, you are shifting the chairs around on the deck of the Titanic.<br /><br />Bruh RabbitAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-86199018781685339182012-02-06T04:18:10.357-08:002012-02-06T04:18:10.357-08:00WO, I'm a financial industry guy. The languag...WO, I'm a financial industry guy. The language of sovereign debt is part of my lexicon (e.g., watch <a href="http://www.zerohedge.com/news/6-hour-greek-meeting-ends-no-agreement-troika-demands-answer-11am-tomorrow-eurusd-drifts-lower" rel="nofollow">greece tomorrow</a><br />). Keynes. Sigh. <i>In the long run we're all dead.</i> Problem is, Bernakie and Geitner will be dead eventually, but I'll have to deal with the decisions they made while alive. Where this intersects with law school is debt: Easy money <a href="http://www.youtube.com/watch?v=d0nERTFo-Sk" rel="nofollow">boom leads to a bust</a><br />. <br /><br />MacK - Yes. Bad policy.terry malloynoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-33061719073438493012012-02-06T03:15:03.056-08:002012-02-06T03:15:03.056-08:00MacK - I am in complete agreement with what you sa...MacK - I am in complete agreement with what you said. But I was trying to make a separate but related point. The core proposition of Keynesianism is to use government debt through government spending to boost economic activity. And it worked. Magnificently. Fifty plus years of nearly uninterrupted prosperity. When we had contractions, debt stimulus quickly got us out of them. But spending borrowed money only works when you can borrow more money. In the last years of the Bush administration (tax cuts) and the first years of the Obama administration (stimulus spending) we borrowed and spent nearly $5 trillion dollars. We raised our debt/g.d.p. ratio from less than 70% to the current 101%. The debt/g.d.p. ratio is a rough expression of the ability of an economy to service debt. There are other factors - the percentage of debt owned by foreign creditors, the maturity profile of the debt, what percent of the debt is held by other government entities i.e. social security, the medicare trust fund, federal employee retirement plans. But should the debts of GSE's, Fannie Mae, Freddie Mac, the government student loan portfolio, be added in to calculate the federal debt? There is something magical about the ratio. At about 120% creditors start to question our ability to repay and become reluctant to buy our bonds. With 9% deficits and 2% growth we're over 120% debt/g.d.p. in 2015. Keynes also recommends cutting interest rates, but with 0% interest rates what's to cut. Come the next contraction (or if we still haven't solved this one) we're on our own. William OckhamAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-10752520373745374282012-02-06T01:09:45.423-08:002012-02-06T01:09:45.423-08:00The bigger problem is that excessive credit causes...The bigger problem is that excessive credit causes unwise spending and wealth destruction. This is for example the case with say the Irish property bubble - fuelled by easy lending - it drove up property prices that bore no rational relationship to the ability of the property to generate value - with the crash much of the wealth essentially evaporated.<br /><br />Student loans when granted too easily, and perhaps law student loans are an extreme example of wealth destruction. They persuade law students to pay excessive amounts for a commodity, their JD. They persuade individuals who are at the upper end of the ability spectrum to spend 3+ years engaging in a wasteful activity which will result in no more than 50% of them gaining an asset of any value to them, causing loss of income to the students and deadweight losses to the economy. In many instances they permanently divert from activities where they would be highly productive and indeed well paid the same individuals to long term tracks where they will be badly paid and underproductive.<br /><br />But debt is neither good nor bad, nor is there something magical about a 100% debt to GDP ratio. The big question is for what is the debt being incurred. Student loans are an odd example of apparently virtuous debt - debt that should increase the number of skilled people in society - that should improve social mobility - that allows the main beneficiary of the investment, the student, to repay the cost of the investment - that through a better educated workforce should fuel growth - but through incredibly lax lending policies, no-risk structures for the lenders (no bankruptcy and a federal guarantee), and a conflict of interest on the part of key mediators (the financial aid offices of colleges), is driving an orgy of wealth destruction - combined with some wealth transfers (but transfers less than the actual amount of wealth destruction.)<br /><br />In short a bad policy.<br /><br />MacKAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-24418720770856700412012-02-05T23:44:49.948-08:002012-02-05T23:44:49.948-08:00Terry Malloy @8:06 "Debt moves future consu...Terry Malloy @8:06 "Debt moves future consumption into the present. What concerns me is a consumer based economy where there is no longer the ability to consume because debt has swallowed our current consumption. I don't trust a rebound ..." Very well thought and said. But if you really want a fright consider that whatever Keynes has done to dig us out of this recession he won't be around to bail us out of the next one. Our federal debt is 101% of our g.d.p. It has been rising at 6-8% per year. At current rates it will be at 120% of g.d.p. in three years. Italy's ratio is 120%, as was that of Greece in 2008. If you have any time, well make that if you have a whole lot of time, "This Time Is Different" by Carmen Reinhart and Kenneth Rogoff is a comprehensive treatment of the subject. Debt fear has been given a know nothing reputation by the dangerous lunacies of Ron Paul and the simplicities of the Tea Party. But this book was published by Princeton University Press and Rogoff is a Harvard professor and the former chief economist of the IMF. This isn't an economics blog so I wiil not take space to mention it again. William Ockham.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-2389223410987709152012-02-05T20:06:20.648-08:002012-02-05T20:06:20.648-08:00Thanks for the thoughtful response 334.
Debt mov...Thanks for the thoughtful response 334. <br /><br />Debt moves future consumption into the present. What concerns me is a consumer based economy where there is no longer the ability to consume because debt has swallowed our current consumption. I don't trust a rebound for many reasons, not the least of which is a lack of emphasis on the debt-load of the average consumer. <br /> <br /><br />Specific to the law school scam, my debt service swallows almost all of my current income and therefore ability to consume. This impacts my ability to "form a household" and purchase goods and services from other parts of the economy. Basically, my law professors consumed my current labor in the past.terry malloynoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-82290203928385775082012-02-05T16:28:20.561-08:002012-02-05T16:28:20.561-08:00Here's some facts from someone 3-5 years out: ...Here's some facts from someone 3-5 years out: <br /><br />Graduate in 08 of that other Colorado Law School. <br /><br />On my second 6+month stint of unemployment since graduation. <br /><br />Haven't made more than $100K total in 3 years. <br /><br />Student loans have gone from 145K to 190K. <br /><br />Nice ROI, yeah?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-85727562557858841162012-02-05T15:47:08.792-08:002012-02-05T15:47:08.792-08:00Example of risk shifting: Bankruptcy Act of 2005 t...Example of risk shifting: Bankruptcy Act of 2005 that shifted risk to individual debtors rather than balancing between creditors and debtors. Denial of bankruptcy for student loans. Etc. Just in case people had not heard about risk shifting before.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-46566323197289935632012-02-05T15:46:31.806-08:002012-02-05T15:46:31.806-08:00MacK@1:21 - You are right and I have no quibble wi...MacK@1:21 - You are right and I have no quibble with your numbers or the horror of only creating 10,000 aottorney jobs per year over the next decade. My point was to take the governments numbers with caution. This particularly so when they give out summations of their findings intended for use as advocacy talking points The BLS's take away message was that unemployment went down 0.2% last month to 8.3%. Where in fact it went up 0.8% to 9.3%. If you dig through the law schools salary and employment numbers somewhere in the details you can often find numbers that undercut their conclusions. This in no way excuses the "bold print" points that they offer in their headlines. The recent BLS press release on unemployment is no more descriptive of the actual situation that the law school and NALP statements. Just be careful. William OckhamAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-50604043807836523682012-02-05T15:38:05.604-08:002012-02-05T15:38:05.604-08:001:58
Incidentally, this is the source of the disa...1:58<br /><br />Incidentally, this is the source of the disagreement between Law Prof and myself. It resulted in him writing an article about student loans the other day in response.<br /><br />The disagreement comes down to the fact that he's focused on the debt rather than the forces necessitating the debt like (1) wage stagnation/deflation and (2) the destruction of the middle class safety net.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-41390991829961697112012-02-05T15:34:04.534-08:002012-02-05T15:34:04.534-08:001:58
Debt replaced stagnant wages (now declining ...1:58<br /><br />Debt replaced stagnant wages (now declining wages) and cuts in middle class safety net infrastructure like the government providing low cost education. At the same time this has occurred, there's been a shift of the risk of any given transaction being shifted to the individual consumer. So, yes, debt is the engine that drives our economy not just now, but since the 1970s. Its also a byproduct of an increasingly regressive tax code that favors capital investment rather than wage earning.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-81558608243499616242012-02-05T14:05:12.338-08:002012-02-05T14:05:12.338-08:00Oh, please.Oh, please.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-58458412269067961802012-02-05T13:58:02.339-08:002012-02-05T13:58:02.339-08:00he other day, I met a girl here in the Los Angeles...<i>he other day, I met a girl here in the Los Angeles area that attends FIDM ( Fashion Institute of Design). She is taking out 30k in loans this year to pursue a degree in Jewlery Design. </i><br /><br />I am slowly coming to the conclusion that debt that no one can pay back is the only thing that is propping up this anemic economy. <br /><br />As an example, Rochester NY's largest employer used to be Kodak. They're bankrupt. Now the largest employer in Rochester is the university of Rochester, which charges $35,000 per year for a two year low ranked MBA program (a personal friend attends, over my loud protests. I actually don't know if we're friends any longer). 70,000 dollars to get business contacts in the rust belt. This country is past the point of rescue.terry malloynoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-17105558072720214062012-02-05T13:42:23.303-08:002012-02-05T13:42:23.303-08:00All stats have shortcomings. For instance, undergr...All stats have shortcomings. For instance, undergraduate debt is estimated on finaid.org as 24k. But that data is based on 2007-2008 data (and yet its still regularly quoted even on this blog) Emphasis here: it does not include private school debt, such as for profit schools like the ones Tamanaha speaks of (culinary schools like Le Courdon Bleu, Career colleges of America, and the University of Phoenix) are not included in these figures! That's equivalent to ignoring schools like Thomas Jefferson School of Law when criticizing law schools. The other day, I met a girl here in the Los Angeles area that attends FIDM ( Fashion Institute of Design). She is taking out 30k in loans this year to pursue a degree in Jewlery Design. These loans are federally backed but it willl not be reported in the average undergraduate student debt figure.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-59330706338243147262012-02-05T13:32:09.928-08:002012-02-05T13:32:09.928-08:00"Poster questioned", " the basic co..."Poster questioned", " the basic competence" "agree with their projections"too small and awkward keyboard.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-85206079740185844912012-02-05T13:24:01.103-08:002012-02-05T13:24:01.103-08:00@bruh rabbit. You don't see it, but I do. I di...@bruh rabbit. You don't see it, but I do. I didn't say that BLS's projections should not be questioned. But there is such a thing as good faith and bad faith. An earlier posted questioned the basic ocmpetence of those who work at BLS because he/she did not agree with their projectes. It is not likely that the commenter had studied the numbers or had access to all the data BLS considers. There is nothing wrong with questioning assumptions. But it is also right to consider the basis of the inquiry; does it grow out of superior knowledge or information that the entity in question did not have access to or can be shown to have ignored. Question away.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-26943474138152104452012-02-05T13:23:55.248-08:002012-02-05T13:23:55.248-08:00By the way, I think the most correct answer for th...By the way, I think the most correct answer for the legal market right now is no one has any idea what it might look like 10 or 15 years from now. There are too many unknown variables like will automation require more or less people? Don't assume less. Will outsourcing matter? Don't assume it will. By the same token, don't assume rosy outcomes either. When working with accountants, I often get best case scenarios, and worst case scenarios. That would be nice here to have those different risk assessments.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-27630373781597411052012-02-05T13:21:45.700-08:002012-02-05T13:21:45.700-08:00William Ockham:
The problem with your issue vis-a...William Ockham:<br /><br />The problem with your issue vis-a-vis the BLS numbers is that tehy did report the other "non-workers" elsewhere as you put it. The BLS is reporting hard numbers - for example for how many lawyers there are and how many there were 10 years ago.<br /><br />Their prediction of 100,000 new job for lawyers over a decade - if one has even a basic assumption of a 2% real GDP growth rate or a 1% overall employment growth rate is not that far off - it amounts to essentially no real growth, or even negative growth in legal employment, as a function of the size of the workforce. That is why the BLS number is scary - the current capacity is for about 5-6% annual growth in legal employment - 46-50,000 JD graduate a year, but they predict over a decade or so that there will be no more than 10,000 legal jobs per annum - even if 10,000 leave the profession a year, that is twice as many as the profession can absorb.<br /><br />Is there going to be an even greater drop in legal demand? Who knows - probably not despite all the stories, but a massive expansion seems unlikely and that is what the BLS number of 100,000 means. There is a real lack of numeracy in the profession I notice by the way.<br /><br /><b>ONLY 100,000 additional legal jobs by 2020 is an apocalypse for law schools when nearly 50,000 new lawyers are graduating per year. The BLS numbers are really scary!</b><br /><br />MacKAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-67289119617912307002012-02-05T13:18:31.398-08:002012-02-05T13:18:31.398-08:00MacK
I have gone as far as I am going to with you...MacK<br /><br />I have gone as far as I am going to with you on this sub issue. Either you get politics matters in this situation or you don't. I am certainly not going to play the I must meet MacK's shifting standards on what constitutes specific, especially when you start off with the heavily tilted view that there must be some great conspiracy for political pressure to exist. <br /><br />Bruh RabbitAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5164886390834386622.post-51450589281203661702012-02-05T13:04:53.791-08:002012-02-05T13:04:53.791-08:00Bruh Rabbit:
That's not specific, that's ...Bruh Rabbit:<br /><br />That's not specific, that's just an opinion. Show some intentionally skewed data from the BLS. I would not accept what you said from an associate or opposing counsel and I would not plead it.<br /><br />MacKAnonymousnoreply@blogger.com