BC vs. Fordham - IP Law, both sticker Forum

[dingbat]

This is why, despite the current economic toils, a poor person is more likely to attain the american dream in europe than in america - education is either free or the cost is negligible, so the price of admission to the gentrified professions are not a barrier to entry.

However, as for the public interest part, there are practical considerations. I've heard the economy described as "too many managers, not enough plumbers"
education for the sake of education is all well and good, but if you want members of society to be productive (without defining what that entails) it is important that they are given a practical education that fills needs for jobs.

When we set education policy, it should be designed to maximize jobs, which means encouraging proper diversification. That is, in my opinion, the biggest problem with education in our country.
As has been stated before, law schools graduate nearly twice as many JDs as there are new legal jobs opening up every year.
There are other professions that are chronically understaffed (actuaries come to mind as a profession that has 95%+ employment rates upon graduation)
If we could encourage some of those prospective JDs to become actuaries instead, it would be better for society as a whole

And really, this gets to my real concern. It's way inefficient (in a non-technical sense, policy-oriented sense) to send a bunch of people in one direction when another is better for them individually and for the public interest (which when maximized will help the individual). I think energy should be focused here as opposed to whether the current price of education is justified by an IRR analysis. At the individual level, the effects of debt are pretty clear. It reduces social and economic mobility. It depresses people. It makes them act more unethically. The broader impact is less well understood, at least by me. The issue when doing investment analyses, however, is that people do not exist into perpetuity. The short-term matters significantly more on an emotional level and practical level. This is why we see programs like IBR.

I asked the simple question because I felt like you and manofjustice followed each other down the rabbit hole. Your debate was interesting, but in terms of policy setting, not necessarily relevant. And since you were both interested in outcomes, it makes sense that the regulatory layer get its due consideration. We can get a lot more normative there.

Having lived in different countries with different economic systems and different approaches to tackling this problem, the truth is that the right way of doing something is not necessarily a good way.
there are pros and cons to every system.

I personally love the commentary in this thread: http://www.top-law-schools.com/forums/v ... 0&t=185951

The problem is that everyone wants cheap education, affordable healthcare, comfortable retirement, etc., but no one wants to pay for it. This is a struggle for every society and the solution that works in one place (e.g. free health care in UK/Canada) does not necessarily work in another place (medicare waste in the US)

This is a very, very long debate that we can have, but, unfortunately, implementing a feasible solution is nigh impossible.
I am of the opinion that the US suffers from diseconomies of scale and this impacts all facets of society.

[dingbat]

Simple question: why are so many people so comfortable with viewing education as a traditional investment?

My guess? Because people really want to be educated lest they resign themselves to a lower class, so they come up with ways to justify it. Historically, I don't think education was ever viewed as a traditional investment until maybe 10 years ago. Education isn't thought of as an investment below the undergraduate level.

Historically education was reserved for the privileged few who could afford it
Later on, those who were ambitious saw it as a way to a better life
So at that point it was seen as an investment.
Fastforward to the current era and it is now not just passively seen as an investment, but it is also analyzed as one.

Below the UG level, education is no longer seen as an investment but as a right (and a requirement)

I forgot a very major aspect. My above comment re education relates to the upper echelons of society.
On the lower end, education has always been an investment -> a child would be apprenticed out to learn a trade.
Even in the lower nobility, a child would often be sent to serve as squire to a knight, in the hopes that this could lead to something fruitful.

So yes, education has always been seen as an investment, even if it wasn't defined as such

[manofjustice]

This is why, despite the current economic toils, a poor person is more likely to attain the american dream in europe than in america - education is either free or the cost is negligible, so the price of admission to the gentrified professions are not a barrier to entry.

However, as for the public interest part, there are practical considerations. I've heard the economy described as "too many managers, not enough plumbers"
education for the sake of education is all well and good, but if you want members of society to be productive (without defining what that entails) it is important that they are given a practical education that fills needs for jobs.

When we set education policy, it should be designed to maximize jobs, which means encouraging proper diversification. That is, in my opinion, the biggest problem with education in our country.
As has been stated before, law schools graduate nearly twice as many JDs as there are new legal jobs opening up every year.
There are other professions that are chronically understaffed (actuaries come to mind as a profession that has 95%+ employment rates upon graduation)
If we could encourage some of those prospective JDs to become actuaries instead, it would be better for society as a whole

And really, this gets to my real concern. It's way inefficient (in a non-technical sense, policy-oriented sense) to send a bunch of people in one direction when another is better for them individually and for the public interest (which when maximized will help the individual). I think energy should be focused here as opposed to whether the current price of education is justified by an IRR analysis. At the individual level, the effects of debt are pretty clear. It reduces social and economic mobility. It depresses people. It makes them act more unethically. The broader impact is less well understood, at least by me. The issue when doing investment analyses, however, is that people do not exist into perpetuity. The short-term matters significantly more on an emotional level and practical level. This is why we see programs like IBR.

I asked the simple question because I felt like you and manofjustice followed each other down the rabbit hole. Your debate was interesting, but in terms of policy setting, not necessarily relevant. And since you were both interested in outcomes, it makes sense that the regulatory layer get its due consideration. We can get a lot more normative there.

What regulation would you suggest?

It's important to keep the justified costs in mind, lest someone suggest the way to fix the problem of having too many people go to law school is to raise the cost of law school even more, until fewer people finally go.

Besides, presumably any regulation will address the cost federally subsidized loans should cover. Such cost to be covered should be informed by an economic rational.

[jenesaislaw]

So yes, education has always been seen as an investment, even if it wasn't defined as such

I think this is conflating types of investments, which I don't think resolve to distinctions without a difference. I think what you describe with trade schooling is properly categorized as "personal investment" whereas buying a stock is what I'd call "traditional investment." Usually, you buy stock for its dividends and appreciation. For trade, you learn it to make money to survive, build prestige, and improve/maintain your station in life. For both you put something in wanting something out. Unfortunately, I'm struggling with the right words to explain this distinction, even though it's quite obviously different to my mind.

[jenesaislaw]

What regulation would you suggest?

It's important to keep the justified costs in mind, lest someone suggest the way to fix the problem of having too many people go to law school is to raise the cost of law school even more, until fewer people finally go.

Besides, presumably any regulation will address the cost federally subsidized loans should cover. Such cost to be covered should be informed by an economic rational.

Ha, I don't think I should publicly comment on suggested regulations here. We can have that conversation via PM.

[dingbat]

So yes, education has always been seen as an investment, even if it wasn't defined as such

I think this is conflating types of investments, which I don't think resolve to distinctions without a difference. I think what you describe with trade schooling is properly categorized as "personal investment" whereas buying a stock is what I'd call "traditional investment." Usually, you buy stock for its dividends and appreciation. For trade, you learn it to make money to survive, build prestige, and improve/maintain your station in life. For both you put something in wanting something out. Unfortunately, I'm struggling with the right words to explain this distinction, even though it's quite obviously different to my mind.

I understand the distinction you're trying to make. The issue is that in order to quantify ot measure the value the personal investment is to treat it as a traditional investment.

Simply put, unless you live in Bhutan, Gross National Happiness doesn't cut it

[manofjustice]

So yes, education has always been seen as an investment, even if it wasn't defined as such

I think this is conflating types of investments, which I don't think resolve to distinctions without a difference. I think what you describe with trade schooling is properly categorized as "personal investment" whereas buying a stock is what I'd call "traditional investment." Usually, you buy stock for its dividends and appreciation. For trade, you learn it to make money to survive, build prestige, and improve/maintain your station in life. For both you put something in wanting something out. Unfortunately, I'm struggling with the right words to explain this distinction, even though it's quite obviously different to my mind.

Let me try. With a traditional investment, what you get out of it is what it gives you. The stock goes up. The bond pays a dividend. That's the payoff. With a personal investment, what you get out of it is what you make of it. The trade school just gets you ready. You work, learn more, get better, and earn your payoff.

The trade school (or the law school), then, should charge about what it costs to get you ready, and that's it. It is completely out of line for the trade school to "rent seek" the future income you earn after leaving their tutelage.

[jenesaislaw]

Solid work. I suspect this thread will be cited some day...

[dingbat]

So yes, education has always been seen as an investment, even if it wasn't defined as such

I think this is conflating types of investments, which I don't think resolve to distinctions without a difference. I think what you describe with trade schooling is properly categorized as "personal investment" whereas buying a stock is what I'd call "traditional investment." Usually, you buy stock for its dividends and appreciation. For trade, you learn it to make money to survive, build prestige, and improve/maintain your station in life. For both you put something in wanting something out. Unfortunately, I'm struggling with the right words to explain this distinction, even though it's quite obviously different to my mind.

Let me try. With a traditional investment, what you get out of it is what it gives you. The stock goes up. The bond pays a dividend. That's the payoff. With a personal investment, what you get out of it is what you make of it. The trade school just gets you ready. You work, learn more, get better, and earn your payoff.

The trade school (or the law school), then, should charge about what it costs to get you ready, and that's it. It is completely out of line for the trade school to "rent seek" the future income you earn after leaving their tutelage.

That doesnt make sense.

The school says it costs $50k per year to get you ready so that's what they charge (I'm ignoring discounting/scholarships)
That is not "rent seek" as you put it
The school is not placing a levy on your future earnings.
It is not their problem that you need to borrow money in order to pay for it, not are they lending you the money.

It is the same as when someone sells a house, they do not charge you an ongoing levy. The fact that you had to borrow money and have to pay your mortgage every month does not mean the seller is rent-seeking.

You continually conflate several separate and distinct issues:
1) cost of law school for the student(tuition + COA)
2) method of payment (cash v student loan; pros and cons of student loan)
3) professor salaries
4) job prospects and potential salaries for new JDs

While these are related, they are still distinct issues. Each should be argued separately
As should 5) knowledge level / research of prospective students and 6) marketing practices & veracity of law schools (these are much more closely related)

[jenesaislaw]

Even if you don't like the phrase rent-seeking there, I think his other phrasing is consistent with your other posts here. Setting price for education should be based on the cost to educate at a desirable level rather than the return one expects to or actually does achieve, or an average or weighted average of all returns, over whatever time period.

Part of the reason that prices have risen so quickly for law schools (more than other higher ed inflation) is the societal perception of lawyers (i.e. earning potential). Schools have long gotten away with a massive information asymmetry that disadvantaged those who were trying to enter the profession with incomplete knowledge. They see sexy employment statistics, whether a great employment rate or high salaries, and it confirms their suspicions. Couple this with limitless federal aid with no real underwriting standards, and there are people willing to pay and people willing to keep pricing higher because the people willing to pay think (as the price-setters do too) it's a cut of future earnings.

Maybe it's rent-seeking, maybe it's not. It is bad for society regardless.

[dingbat]

Even if you don't like the phrase rent-seeking there, I think his other phrasing is consistent with your other posts here. Setting price for education should be based on the cost to educate at a desirable level rather than the return one expects to or actually does achieve, or an average or weighted average of all returns, over whatever time period.

Part of the reason that prices have risen so quickly for law schools (more than other higher ed inflation) is the societal perception of lawyers (i.e. earning potential). Schools have long gotten away with a massive information asymmetry that disadvantaged those who were trying to enter the profession with incomplete knowledge. They see sexy employment statistics, whether a great employment rate or high salaries, and it confirms their suspicions. Couple this with limitless federal aid with no real underwriting standards, and there are people willing to pay and people willing to keep pricing higher because the people willing to pay think (as the price-setters do too) it's a cut of future earnings.

Maybe it's rent-seeking, maybe it's not. It is bad for society regardless.

I agree that tuition should reflect the cost of education, especially considering that most law schools are non-profit.
I don't think any law school bases it's pricing on the earnings potential of law students.
However, the costs of operating law school have gone up. Therefore, they charge more.
Why the costs of law schools have gone up is a very different debate than whether or not they're overcharging or whether or not it is worth it for a student to attend.

It's easy to espouse platitudes (law school costs too much) but exploring the veracity of the platitude, or explaining the cause thereof requires more than just making a blanket statement and claiming it as fact.

That's the same kind of reasoning that has kids paying sticker at a TTT thinking they'll walk out with a 6-figure job while ranking below median

[flem]

Holy fucking tl;dr bros

[dingbat]

Holy fucking tl;dr bros

now tell me what you really think

[jenesaislaw]

I don't think any law school bases it's pricing on the earnings potential of law students.

That is flatly incorrect and amounts to simply burying your head in the sand. Even without knowing better, I can look at higher education inflation and law school inflation and see that one is more than the other. There are few explanations for the differences. Chief among them is that people have expectations about lawyer salaries. When you're in a position to set price, you've been successful and are more likely to discount the bad outcomes.

However, the costs of operating law school have gone up. Therefore, they charge more.

What costs have gone up? And why?

Costs have risen because they can. They have access to students who have access to money. There is no downward pressure whatsoever.

Still, I'm starting to go down the rabbit hole on your red herring. I'll play along a bit, but I'm not willing to go too far. If we can't agree that law school costs too much money right now, then it's just a waste of time to continue.

[flem]

Holy fucking tl;dr bros

now tell me what you really think

BC?

[dingbat]

I don't think any law school bases it's pricing on the earnings potential of law students.

That is flatly incorrect and amounts to simply burying your head in the sand. Even without knowing better, I can look at higher education inflation and law school inflation and see that one is more than the other. There are few explanations for the differences.

an argument I've heard is that there are less economies of scale in law school - unlike in, for example, business school you can't have one professor giving a lecture to a class of 400 students.
To be honest, I can't explain it either.

What costs have gone up? And why?

Costs have risen because they can. They have access to students who have access to money. There is no downward pressure whatsoever. There are old faculty members living on tenure that schools would love to get rid of, but can't.

I agree completely here. It is a bit of a chicken and egg question.

Still, I'm starting to go down the rabbit hole on your red herring. I'll play along a bit, but I'm not willing to go too far. If we can't agree that law school costs too much money right now, then it's just a waste of time to continue.

This depends entirely on how you define costs too much. While I really wish law schools didn't cost as much as they do, economically an argument can be made that the price of law school is actually too low (see cost/benefit analysis a few pages back). Remember, there's a big difference between emotions and economics.
More disconcerting for me is that New York Law School and New York University School of Law charge similar amounts for tuition, despite vastly different outcomes.