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This was a pretty casual article, and the author does think the issue is exploratory, but there wasn't much depth of analysis. The graphs show only correlation

This was a pretty casual article, and the author does think the issue is exploratory, but there wasn't much depth of analysis. The graphs show only correlation between higher education and success, and if anything fit into the thesis that Thiel et al supports: people have a 'belief' in higher education (which explains the correlation--kids are told they HAVE to go to college, so the smart kids make sure they jump through all the hoops and get their degree) yet it doesn't truly educate the students in question.

Goladus 16y ago
I agree that there wasn't much depth of analysis. But the problem with Theil's thesis is that it doesn't really have much to do with what a bubble really is. There can be overvalued things that people believe in without it being a bubble. One of the big problems with a bubble is that it can "pop." There will be a widespread, more-or-less simultaneous realization that the core investment is worthless and the whole thing comes tumbling down at once, sending shockwaves through the whole economy. Asset freezing causes other businesses to fail, stock values plummet everywhere devouring life savings. This causes lots of harm to people and is why bubbles are scary. None of the people yammering on about a higher education bubble seem to be discussing the issue in those terms. If automobiles are overvalued and people stop buying them, there might be some pain as the market adjusts and the existing industry dies but it's not a bubble pop. It doesn't mean it's not something to analyze or worry about, the industrial revolution never "popped" and we still have the rust belt, but it's likely that throwing the word "bubble" around is just to get attention.
- GiraffeNecktie 16y ago
  I would think a bubble requires something that can be bought and sold (gold bars, equity, tulip bulbs, condos in Shanghai). You buy it with the expectation that you can resell it for a higher price. Or, more to the point, you accumulate and hoard beyond what is sane or reasonable in the expectation of higher prices. For any given individual its difficult or impossible to say what the real value of an education is going to be in the future. Even if there are no prospects for someone with a degree in linguistics today, it doesn't mean that the degree doesn't open a door tomorrow, perhaps in a related field.

Goladus 16y ago

I agree that there wasn't much depth of analysis. But the problem with Theil's thesis is that it doesn't really have much to do with what a bubble really is. There can be overvalued things that people believe in without it being a bubble. One of the big problems with a bubble is that it can "pop." There will be a widespread, more-or-less simultaneous realization that the core investment is worthless and the whole thing comes tumbling down at once, sending shockwaves through the whole economy. Asset freezing causes other businesses to fail, stock values plummet everywhere devouring life savings. This causes lots of harm to people and is why bubbles are scary. None of the people yammering on about a higher education bubble seem to be discussing the issue in those terms. If automobiles are overvalued and people stop buying them, there might be some pain as the market adjusts and the existing industry dies but it's not a bubble pop. It doesn't mean it's not something to analyze or worry about, the industrial revolution never "popped" and we still have the rust belt, but it's likely that throwing the word "bubble" around is just to get attention.

GiraffeNecktie 16y ago
I would think a bubble requires something that can be bought and sold (gold bars, equity, tulip bulbs, condos in Shanghai). You buy it with the expectation that you can resell it for a higher price. Or, more to the point, you accumulate and hoard beyond what is sane or reasonable in the expectation of higher prices. For any given individual its difficult or impossible to say what the real value of an education is going to be in the future. Even if there are no prospects for someone with a degree in linguistics today, it doesn't mean that the degree doesn't open a door tomorrow, perhaps in a related field.