The New Bubble: Higher Education

June 4, 2011 § Leave a comment

I believed it. I believed the path to the American Dream was through education, sacrifice, hard work, and faith in those three.

I still kind of believe all these things. But, I have a better perspective on the nature of education in America – and it’s a bitter pill to swallow.  Higher education is the only market that seems to have been growing by leaps and bounds in the last decade, and I have this tingling feeling it’s headed towards a major negative adjustment.

When I say that higher education is growing, what I mean is – on a less dramatic note – universities building giant brand new buildings, community colleges expanding their campuses, new colleges being founded all the time, online universities, and of course the traditional exponential growth in tuition and fees. But what is my main concern are the entities behind all of these wheels of growth and who, at the end of the day, will not foot any of the bill. The students will foot this bill, or their 90 year old selves will. And as the cost for a degree gets higher and the access and proliferation of degrees gets wider, the intangible benefit of being a highly educated person is being dragged in the mud. We (those of us in our 30’s) are in a pincer movement to make Rommel blush, we pay out our teeth to stay in a classroom longer so that when we get out we have no option but to ask for a huge paycheck due to our earning years being not only pressured by shortened time and the need to pay back on interested money – but by expectations of family and our own self starting of being educated that used to come with being financially stable after sacrifice of any sort. Costs are rising…. and Reward is falling,

I was around when the real estate bubble was hot, I remember hearing that the best investment any sane individual could make was to buy a home (even if they were going to get so above their head in debt) because a home’s value had never decreased. Me myself, I ignored them, watched the bubble grow into a monster that made the inevitable explosion even worse than the dot com bubble less than two decades ago. I then preceded to ignore the rain of bailout cries by the people who were ill prepared for the home’s inflated value not meeting their deflated wallet sizes. And I held a belief that I would pay thousands to get a better brain and more papers on the wall. They can’t take my brain away I thought.

What is happening, similar to other busts, is that students are taking out larger and larger amounts of debt to enroll in schools where they’re not promised anything in return. Academia doesn’t promise them a job, food on the table, a car in the garage, a good name, or even shoes. They promise an experience, that’s it. I want to say that this bust will follow in the some familiar repercussions. In the gold bust of California we found California, in the dot com bust of the 90’s we learned how to use the internet, in the housing bust we were left with built homes. I’m not sure what will be left after the education bust.

Maybe what will be left are super articulate people who are bagging your groceries and waiting your tables – waiting for the day their book will be published. Maybe the landscape will be filled with professors teaching professors teaching professors how to teach and profess. Maybe the masters degrees will get a bailout from the IMF (no, that’s impossible). Maybe we’ll find a new mineral on mars that allows for our form of monetary value to completely be done away with.

Or maybe they’ll take our brains back. I can see it now “Property of Sallie Mae”.

The same names seem to now be involved with all this new inflationary pseudo insurance promises of a better life (an education) that were being thrown around during other boom busts of my very short lifetime. A phd is alluring, it seems safe, it seems like the best thing to do with your future income. I’m just glad as hell I have my degree – it’s going to get worse before it gets better.  Can anyone say tuition limits? Can we all say together “accountability for our new religion of academia!”? Probably not, enough of us are making a shit load of money counting beans.

The cycle of the education bubble is a blotched bastard sitting in the Reno sun, and I believed it to be a gorgeous blonde in Monaco. Now I get to pay for having faith.


Borders Buster

February 19, 2011 § Leave a comment

So, Borders Books has announced they are busted and broke. They owe publishers and creditors it seems – hey, it happens to the best of us all. Not needing to dig into the demise much I can find many reasons for the failing, namely that the book industry is over and that the web was the beginning of the long slow walk for the Gutenberg renaissance. The execution has been threatening and approaching for decades, these days the New York Times is always on the ropes, Big Box Bookstores are dwindling, and periodicals are finding their way onto Issuu much easier than onto a grocery store shelf.

Sure I’m sentimental towards the feel of the paper, the dusty and overstocked bookstore of the 90’s and 2000’s. I’m going to miss their mammoth hardback economies of scale and their prevalence in every single strip mall landscape. Just like many things, I still expect to go to a single banner store and find all my music, literature, caffeine, and movies in a quick linear experience. It was rather “green” in a way, packaging all my shopping and errands into a one stop trip. Anyone who’s everyone under a design or economics ritual will tout the need for greater density, greater diversity, greater autocracy (maybe not) and these stores, such as Border Books, did that. It was this formula that made our country great, and Borders a successful brand. But, alas, it was unstable. It relied on Harry Potter for too many years and then the Twilight kids. Now, there are reliable online sources and handy little Ereads that put the Borders model the way of the dodo.

I was interested in digesting this headline by visualizing  the spatial voids Borders is leaving as it abandons it’s 138 stores (don’t worry there are roughly 400 more still alive for now). Voids meaning the sheer square footage left by the bankruptcy action and the company going to liquidation. Because the disappearance of 138 stores there is now 3,510,0073 square feet of perfectly good climate controlled enclosures. That’s an average of 26,391 square feet per store.  Sure, it’s small change in the big picture but this is a single company in a long line of strip mall and stand alone buildings. What replaces the 3.5 million square feet? We used to all fear the big monolithic bookstores (You’ve Got Mail), now I fear for the huge holes it leaves in the fabric between work and home.

Maybe, for the right price, I’ll rent out one of the stores here in Austin and move myself and the beagle into a sweet 25,000 square foot bachelor pad.

Huffington Post Gone in 2011

Wall Street Journal Article

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