On The US Becoming a Nation of Takers, Not Makers - Part II

To summarize where we were yesterday, Stephen Moore at the WSJ wrote an editorial about the relative numbers of government employees (who take wealth) vs. manufacturing, farming, mining, and other jobs that make wealth.  As someone who has worked in the US manufacturing sector almost all my life, I approached this topic from the perspective of hiring people into manufacturing companies and especially my world. 

But there are other perspectives that beg mention, too.  To begin with, many or most people have heard of Robert Kiyosaki's Rich Dad Poor Dad book and, well, empire.  I have read a few of the books, and I like where he comes from but I'm not a "zealot" about his ideas.  One of his major points, though, is that people can be divided along a line of how much financial risk they're willing to take in life.  In my mind, the opposite ends of this line would a entrepreneur who gambles everything they have to start a business that they believe to be "the next big thing", while the other end would be a municipal worker and union member.  Everything this latter guy has done is aimed at getting a job that "takes an act of congress" to be fired from.  The first guy is willing to bet everything, willing to fail and live homeless, penniless in a car, to get a shot at greatness.  The second guy wants a guaranteed job, guaranteed income, guaranteed retirement, - everything guaranteed.  One has no need for security while the other needs security most of all. 

I believe we need more of the first kind of person and fewer of the second.  As Moore puts it:

Don't expect a reversal of this trend anytime soon. Surveys of college graduates are finding that more and more of our top minds want to work for the government. Why? Because in recent years only government agencies have been hiring, and because the offer of near lifetime security is highly valued in these times of economic turbulence. When 23-year-olds aren't willing to take career risks, we have a real problem on our hands. Sadly, we could end up with a generation of Americans who want to work at the Department of Motor Vehicles.

I understand that these are tough times economically, and security is going to be more attractive than during boom times.  And to be honest, I have more of a tendency to want security and repeatability than I like in myself.  But America needs more Bill Gates and Henry Fords than we need Patty and Selma Bouvier. 

This security-seeking attitude has the added downside of removing these workers from the pool of business starters because the first 10 years after getting out of school and starting a career are also the years most will start families.  If there was ever anything that tended to keep young adults in their jobs, that's the big one.  

The graph of how private college tuition has increased at about triple the rate of growth of the cost of living reveals another problem.  The Federal Government is taking over student loans, and offers amnesty if the student works in the approved "government service" job for the required number of years.  Come work for the government and we won't even ask you to pay back your loans.  This can't fail to make more people dependent on the Fed government - which seems to be a major goal of this administration. 

Federally guaranteed student loans are one of the reasons why tuition has increased as much as it has, by providing a money hose from Fed.gov through the students to the colleges.   Now there are commentators making the case this will allow the Fed.gov leviathan to squeeze some private schools out of business by not lending their students tuition money.  They've already come out against the awkwardly-named "For-profit colleges" with proposals to prevent student financial aid.  Is extortion too strong a word?  Already, there are those recommending that the Fed.gov not loan to colleges or programs that aren't finding political favor.  If you're a professor who steps out of line on global warming or some other fad, your livelihood could be shut off; do you think the college will want staff that keeps them from getting students?  (What's the difference between a private college like Harvard that earns a profit and a "for profit" college?  Political connections?)

Finally, I should never imply that college is essential.  If anything, it's looking like a worse deal all the time. 

There are many jobs that simply can't be taught without the student doing the task.  There may be no better example for "you can't learn it by reading a book" than shooting.  You can read all you want, but sooner or later you need to master your physical gun handling.  As another example, I've ground a few telescope mirrors.  Like shooting, you can read all about concepts, but nothing other than actually doing it will teach you how to do it; it's a task overwhelmingly controlled by the feel, the sound, and the behavior of the glass in your hands.  Things like this were taught by apprenticeship before the gentrification occurred that says we need everyone to attend college.  I have tremendous respect and admiration for opticians, machinists and other workers who can exceed the accuracy of their tools and produce works of mechanical art.  On the opposite end, surgeons go through an internship and residency where they learn the hands-on work of surgery.  This is nothing if not an apprenticeship, for people who already have eight to 10 years of college.   

Go look again at the top graph in yesterday's post, the total spent on education vs. the improvement in measured results.  Any rational person would look at that graph and say public K-12 education has failed; no matter what we spend and what we do, the results don't improve.  As if to underline that, you'll find that colleges are teaching remedial classes more and more to try and get their incoming students up to college level (not that this is a problem for them; they simply collect more tuition).  The College Board (famous for their SAT) says up to 40% of students need remedial classes. Kevin, at The Smallest Minority has regular coverage on how bad modern education is, with the recurring theme "I say we take off and nuke the site from orbit - it's the only way to be sure".  Public education is the prime example of Pournelle's Iron Law. 

Every job has some specialized knowledge or skills that are required to do that job.  In rough terms, the more specialized the knowledge, the more of that knowledge needed and the larger the impacts of getting it wrong, the more you get paid.  There are, or should be, alternate routes to getting that knowledge or skill set.  A straightforward trade would be that you can get a recognized, standard degree in four or five years, or learn it on your own while working in the field in perhaps twice that time.  You could then decide whether it was better to roll up years of debt in school, or work at a lower pay rate while you learned the subjects. Instead, we have a system where the degree is used an excuse for the hiring manager.  If the new employee fails and costs the company too much, no one will say too much if the employee had all the qualifications on paper; on the other hand, if the manager offers the job to someone without the degree and they fail, the manager might get fired.  In our world, we say, "no one ever got fired for hiring an MIT grad".

Stephen Moore's essay points out a major problem.  We will not restore the economy and grow as long as risk-averse wealth takers out number the real wealth makers and risk takers.  This trend is going in exactly the wrong direction.