Obama/Dem proposal on direct student loans (cutting out banks)

[PipeDaddy]

http://www.washingtonpost.com/wp-dyn/content/article/2010/02/25/AR2010022503965.html#

I hadn't heard much about it at all until this article.

And this issue has long been one of my pet peeves, although I suspect from a different angle than Mr. Obama.

I think that our society, and indeed specifically corporate America, has overvalued the college degree. Society is pushing the idea that college is good for everyone, and some would go so far as to say that a college education is a right. That's laughable.

And it's almost as laughable as the belief in corporate America that you must have this degree or that degree to advance your career. Now certainly there are some careers where schooling is obviously necessary. But there are many more where that really isn't the case. And there are others that fall into the category of the necessary schooling being able to be completed in 2 years rather than 4. Sometimes less than that.

So with this overvaluing of the college degree has come the predictable rise in the cost of college education. And that has been furthered by the government handouts to anyone that wants to go to college. So universities get an abundance of government money to play with - guess what happens? College education is subsidized on a couple of levels, and guess what happens with subsidized goods? That's right, artificial inflation of its price.

The current setup of the student loan program is flawed, however. My answer would be to drastically scale back the government's involvement altogether - I suspect that isn't Obama's plan. I'm guessing his plan is a government takeover of that portion of the banking industry - let's just loan the money directly instead of letting banks do it. I think that's just as much a recipe for disaster as the current method.

[Slyhawk]

So with this overvaluing of the college degree has come the predictable rise in the cost of college education. And that has been furthered by the government handouts to anyone that wants to go to college. So universities get an abundance of government money to play with - guess what happens? College education is subsidized on a couple of levels, and guess what happens with subsidized goods? That's right, artificial inflation of its price.

http://images.google.com/url?source=imgres&ct=img&q=http://www.edweek.org/media/2006/12/12/17postsec-c3.jpg&usg=AFQjCNF2C8hf0s1IDGVJSF-aw9xDT1Yijg

This chart is not a slam at Pipe's profession, btw. It just shows how skewed prices become when the Feds interfere in a market.

[ISUFan98]

That's a great chart, Sly.

[PipeDaddy]

So with this overvaluing of the college degree has come the predictable rise in the cost of college education. And that has been furthered by the government handouts to anyone that wants to go to college. So universities get an abundance of government money to play with - guess what happens? College education is subsidized on a couple of levels, and guess what happens with subsidized goods? That's right, artificial inflation of its price.

http://images.google.com/url?source=imgres&ct=img&q=http://www.edweek.org/media/2006/12/12/17postsec-c3.jpg&usg=AFQjCNF2C8hf0s1IDGVJSF-aw9xDT1Yijg

This chart is not a slam at Pipe's profession, btw. It just shows how skewed prices become when the Feds interfere in a market.

Wow, that's a disturbing chart.

[Mr. Hawk]

Cue Pipe telling us that medicine is just "too unique" to apply market principles :)

[xr4ticlone]

Cue Pipe telling us that medicine is just "too unique" to apply market principles :)

Actually I think just the opposite is true. What that graph shows is what happens when you subsidize anything....education or medical care. However, I highly doubt that unsubsidized medical would mean lower doctor pay...mainly because Dr's have always made more than most professions. I don't think that the Gov getting out of medical care would mean Pipe is going to make $50K next year by any stretch.

[PipeDaddy]

Cue Pipe telling us that medicine is just "too unique" to apply market principles :)

Actually I think just the opposite is true. What that graph shows is what happens when you subsidize anything....education or medical care. However, I highly doubt that unsubsidized medical would mean lower doctor pay...mainly because Dr's have always made more than most professions. I don't think that the Gov getting out of medical care would mean Pipe is going to make $50K next year by any stretch.

Well, first of all this is yet another complete fabrication of MH's imagination - he has repeated it enough that he now himself believes that I once said it. And he keeps repeating it in the hopes that others follow suit.

But secondly, I agree with you in that overall doctor's salaries probably won't change much. However, there would likely be a redistribution in salaries since the current reimbursement rules heavily favor certain specialties more than others, independent of hours worked.

[Klink]

It is ridiculous putting apparel in that chart, why not throw landscaping labor in there too

[xr4ticlone]

It is ridiculous putting apparel in that chart, why not throw landscaping labor in there too

It's what everyone wanted...we shipped all the clothes over to the China. I agree putting things like that are not really comparable. I'd like to see the costs of automobiles in there.

[Pseudonym]

They slipped this into the health care bill, FYI

[Mr. Hawk]

They slipped this into the health care bill, FYI
shocker.

[Southsidehawk]

http://www.washingtonpost.com/wp-dyn/content/article/2010/02/25/AR2010022503965.html#

I hadn't heard much about it at all until this article.

And this issue has long been one of my pet peeves, although I suspect from a different angle than Mr. Obama.

I think that our society, and indeed specifically corporate America, has overvalued the college degree. Society is pushing the idea that college is good for everyone, and some would go so far as to say that a college education is a right. That's laughable.

And it's almost as laughable as the belief in corporate America that you must have this degree or that degree to advance your career. Now certainly there are some careers where schooling is obviously necessary. But there are many more where that really isn't the case. And there are others that fall into the category of the necessary schooling being able to be completed in 2 years rather than 4. Sometimes less than that.

So with this overvaluing of the college degree has come the predictable rise in the cost of college education. And that has been furthered by the government handouts to anyone that wants to go to college. So universities get an abundance of government money to play with - guess what happens? College education is subsidized on a couple of levels, and guess what happens with subsidized goods? That's right, artificial inflation of its price.

The current setup of the student loan program is flawed, however. My answer would be to drastically scale back the government's involvement altogether - I suspect that isn't Obama's plan. I'm guessing his plan is a government takeover of that portion of the banking industry - let's just loan the money directly instead of letting banks do it. I think that's just as much a recipe for disaster as the current method.

He was just on the TV extolling the virtues of getting rid of the people making profits off of these poor kids. Only the Gubmit can do right by these kids. :rolleyes:

[bearbull24.5]

Finally, I get some money

[crazed_hoosier1]

This chart is not a slam at Pipe's profession, btw. It just shows how skewed prices become when the Feds interfere in a market.

Yep, yep....a thousand times yep.

The fact that so many people have become convinced that paying for things we want/need by way of taxes and public sector bureaucracy is a path to affordability is a testament to the persuasive powers of its advocates.

Leaving aside Pipe's point about college education being overvalued (which I also agree with), how can anybody look objectively at our educational paradigm today -- and not just at the post-secondary level -- and consider it a bargain?

There's an obvious answer, of course: whether people consider something affordable or not has everything to do with how much of the bill they're actually shouldering themselves.

I imagine that most people who are on, say, a full-ride athletic scholarship would say that college is eminently affordable. And, for them, it absolutely is.

Healthcare just became more affordable for lots of Americans. But only because it became less affordable for lots of other ones.

Welcome to the new and improved America, ladies and gentlemen.

[crazed_hoosier1]

Cue Pipe telling us that medicine is just "too unique" to apply market principles :)

Actually I think just the opposite is true. What that graph shows is what happens when you subsidize anything....education or medical care. However, I highly doubt that unsubsidized medical would mean lower doctor pay...mainly because Dr's have always made more than most professions. I don't think that the Gov getting out of medical care would mean Pipe is going to make $50K next year by any stretch.

Well, first of all this is yet another complete fabrication of MH's imagination - he has repeated it enough that he now himself believes that I once said it. And he keeps repeating it in the hopes that others follow suit.

But secondly, I agree with you in that overall doctor's salaries probably won't change much. However, there would likely be a redistribution in salaries since the current reimbursement rules heavily favor certain specialties more than others, independent of hours worked.

This is a tricky subject, I know. And the first thing everybody needs to understand is that the medical profession is far from homogeneous -- just like the legal profession. Anybody who doubts that there are practicing attorneys who aren't making great livings need only go down to their local prosecutor's office and do a survey.

All in all, though, I think that the medical profession has made out very, very handsomely with the skewing of the healthcare marketplace over the past 4 or 5 decades. And, as such, I think on average the profession is overpaid.

That's not to accuse docs of price gouging, per se (a concept I really don't buy in general). But there's just precious little incentive in the healthcare finance status quo for providers to be frugal and efficient operators.

Probably a fourth of my company's revenue comes from the healthcare sector. And it is consistently the highest margin sector of our business....barring the occasional fluke job that goes gangbusters (which is rare these days, believe me).

Most of this is with hospitals and clinics rather than private practices, of course. But even that is changing. We recently completed a facility for an oncology practice, for example, that included two (nuclear) linear accelerators and a spare vault for a third.

This outfit spent money like it was as abundant as grass on the ground -- and, from what I could determine, it didn't bother them because of the profitability they anticipated from the radiation therapy stuff.

Hospitals have been this way for as long as I've been dealing with them. They'll spend money on facility-related things that absolutely nobody else in most other (private-sector) industries would.

[Slyhawk]

It is ridiculous putting apparel in that chart, why not throw landscaping labor in there too

Why? The price of apparel is indicative of where prices go when the market makes the decisions. You could probably put consumer electronics into this graph for the same result.

[crazed_hoosier1]

It is ridiculous putting apparel in that chart, why not throw landscaping labor in there too

Why? The price of apparel is indicative of where prices go when the market makes the decisions. You could probably put consumer electronics into this graph for the same result.

Isn't it obvious? In his opinion, those things are oranges to these apples because they're largely performed by cheap, foreign labor.

I understand the point well enough. Of course, I don't know what it's like in his town or yours, but in my town, a pretty high percentage of the docs are every bit as foreign-born as the landscapers.

Which is fine by me, I don't particularly care (so long as they're here legally). But it does go to show that labor isn't cheap simply because it's provided by somebody who isn't a native-born American.

And your point still stands pretty strongly in my eyes, regardless. Free markets keep prices affordable -- heavily regulated markets do not.

[LakeBull]

This is the same as the rest of the "Health Care" bill. It is just a power grab by the government. College administrators hated working with the horrible government administration of these loans, so we are giving the government a monopoly. Makes sense... You don't think the government by being the only source of this money might have more control over higher education and perhaps have the power to decide just who gets to go to college. No, they would never weld their power like that… And if you look closely at just what they are doing "loans" is a very loose word for these appropriations.


Things sure have changed since Reagan. He was worried about dealing with the evil empire. Obama is focused on embellishing it.

[drbutkus]

I'd love to see the history of legal expenses for our society. But I won't hold my breath.

Under Reagan, there was a distinct concern, and perhaps fear, that he would indeed steer the medical delivery system toward a market oriented approach, whatever that would mean. This discombobulated a number of physicians, particularly the younger ones (who are always the most worried about change in compensation).

For people who went through med school in the late 60's and into the 70's, the schools taught and developed cooperation rather than competition. The curriculum was completely devoid of any business education at all. You worked through med school, did your residency for ten thousand dollars a year, with the sense of a compact with society that, once in practice, pursuing your craft would be sufficient to make a good living.

Doctors feared having to learn and entirely new set of skills. And today, we may watch the same thing evolve. Obama must get to the medical students now to instill in them an acceptance of a structured style of medicine, defined hours, set pay, programmatic medical decisions made by diagnostic pathways established elsewhere by other people.

In short, he wants them to accept less in terms of economic gain, or potential gain, than I saw as a possibility when I graduated. But in return for what? I don't think they will find that practicing the art of medicine is valued. I doubt they will connect with patients the way I have.

But, and this is a big but, they won't have the MH's of the world constantly deriding them on message boards because of their salaries. So there is that.

[drbutkus]

Let's see:

Bankers are pushing back against "our" needed reforms to transfer the loan industry to the government

Doctors are trying to prevent health care reform.

Major companies, following the law, publish new earnings data showing the impact of the new law, and their executives get summoned to testify before congress.



The auto industry executives resist government takeover, and they get hauled before Congress.

Investment executives are demonized and the government, with no legal precedent, establishes a Compensation Czar with the ability to arbitrarily cap their incomes.

What's next, a People's Court?


I am so reminded of a story my wife's uncle told me: he was a vet in NW Iowa, came into some money, and moved to somewhere in Africa, where he had a fascinating career as a vet, primarily working for a large British owned cattle company. He left when, after much turmoil, the locals overran the company and evicted the British. To celebrate, the locals had a BBQ and roasted ALL of the seed bulls.

[Monster]

Public education is getting better! We're sending more kids to college than ever!

[PipeDaddy]

Actually I think just the opposite is true. What that graph shows is what happens when you subsidize anything....education or medical care. However, I highly doubt that unsubsidized medical would mean lower doctor pay...mainly because Dr's have always made more than most professions. I don't think that the Gov getting out of medical care would mean Pipe is going to make $50K next year by any stretch.

Well, first of all this is yet another complete fabrication of MH's imagination - he has repeated it enough that he now himself believes that I once said it. And he keeps repeating it in the hopes that others follow suit.

But secondly, I agree with you in that overall doctor's salaries probably won't change much. However, there would likely be a redistribution in salaries since the current reimbursement rules heavily favor certain specialties more than others, independent of hours worked.

This is a tricky subject, I know. And the first thing everybody needs to understand is that the medical profession is far from homogeneous -- just like the legal profession. Anybody who doubts that there are practicing attorneys who aren't making great livings need only go down to their local prosecutor's office and do a survey.

All in all, though, I think that the medical profession has made out very, very handsomely with the skewing of the healthcare marketplace over the past 4 or 5 decades. And, as such, I think on average the profession is overpaid.

That's not to accuse docs of price gouging, per se (a concept I really don't buy in general). But there's just precious little incentive in the healthcare finance status quo for providers to be frugal and efficient operators.

Probably a fourth of my company's revenue comes from the healthcare sector. And it is consistently the highest margin sector of our business....barring the occasional fluke job that goes gangbusters (which is rare these days, believe me).

Most of this is with hospitals and clinics rather than private practices, of course. But even that is changing. We recently completed a facility for an oncology practice, for example, that included two (nuclear) linear accelerators and a spare vault for a third.

This outfit spent money like it was as abundant as grass on the ground -- and, from what I could determine, it didn't bother them because of the profitability they anticipated from the radiation therapy stuff.

Hospitals have been this way for as long as I've been dealing with them. They'll spend money on facility-related things that absolutely nobody else in most other (private-sector) industries would.

To give you an example, the best one I can think of, of just how skewed things are when they are controlled by the government and not the free market:

1) Iowa physicians in general provide some of the best and cheapest care in the nation - they consistently rank highly in good outcomes and least expensive care, despite having an elderly and complex population
2) The response to this by the government is to reimburse Iowa hospitals and physicians the lowest rates in the nation.
3) Reimbursement rates, at least in part, would more logically provide incentives and rewards for providing good and cheap care.

The system is broken. And this health bill did virtually zero to fix it, instead simultaneously bashing insurance companies and giving them a windfall. It's a real head-scratcher.

[JohnGault]

Public education is getting better! We're sending more kids to college than ever!

Yes because college is now the new high school. An expensive one at that.

[JohnGault]

This will not give any insurance co. a windfall. The fines are way too small & therefore it will be cheap for anyone to play the system. In 10-12 years the insurance industry will be gone & the government will have to come in & "save the day".