Good Friday, 15, April 2022

Wrap

Markets are largely closed. The USD continued to trend upwards, $DXY now at 100.5.

Twitter

Elon ain't rich enough to spend $40b buying $twtr but pretty cool and good for him to do some more security fraud to unwind the bags at an even higher price and to cancel out the earlier security fraud (?)

— Elmer Spud (@PlugInFUD) April 14, 2022

Image

Henri Cartier-Bresson pic.twitter.com/CN4gnvTado

— Daniel Brami (@Daniel_Red_Eire) April 15, 2022

Funding for higher education

One of the arguments for conservatism and even Conservatism, when it had an ideology, is that the status quo ante has a magical property that no untested proposal has, which is that all its faults are already known and understood. In the Blair government of the 2000s, a decision was made to allow many more young people to go to university, but to fund them in the way that previous generations had been funded was considered too expensive.

The solution was to lend kids the money, and then get them to repay out of their (generally higher) salaries in the graduate-level jobs they’d go into. This was a disaster, which, surely, we should have foreseen. When 10% of a school cohort go to university, the value of a degree has to be higher than when 50% does, unless you believe that ability to get into university doesn’t correlate at all with ability to earn money.

Of course, you can’t get blood out of a stone, so repayment of loans is “income contingent.” In other words, the people who study sports science will never have to pay back any of their debt. The moral hazard this creates is highly visible now.

Having market lenders take the risk on students in financing their degrees would be fine. If you are accepted to do an MBA at Harvard Business School, you’ll have no problem finding private finance. The market would probably fund you to study computer science at Cambridge, with no problems. But Labour would never agree to such a model, which is why we have the mess we have today.

People would say, “but nobody will be funded to study arts subjects.” I think you’d find that Lit. Hum. undergrads at Oxford would manage OK.

The fundamental problem is that the educational establishment is extremely unwilling to accept that a university degree’s main value is due to its signalling ability, not the knowledge and skills imparted by dons. I don’t think anyone dares take on “The Blob” as Dominic Cummings so appositely called it.