October 16, 2011

We Are the 99th Percentile

imageimageOccupy Wall Street is finishing up its fourth week in Zucotti Park (if they weren’t evicted yesterday), near Wall Street in Manhattan.  The massive protest against Wall Street excess has spun off Occupy movements across the United States, including our very own Occupy San Jose movement on the steps of City Hall. 

And that  in turn spread to, I kid you not, Occupy Palo Alto.  The very definition of the one percent has supporters of the other 99, or at least the 99 found the right location, location, location for the one.

Occupy Wall Street comes to Palo Alto

imageBy Jason Green, Daily News Staff Writer
Posted: 10/13/2011 06:09:44 AM PDT, Updated: 10/13/2011 06:09:51 AM PDT

Photos by Kirstina Sangsahachart/ Daily News

Some 150 people gathered Wednesday evening in front of a Palo Alto bank to lend their support to the growing Occupy Wall Street movement that has zeroed in on corporate greed and rampant unemployment.

Organized by the Peninsula Peace and Justice Center, the rally in front of the Bank of America on El Camino Real was one of several that took place across the Bay Area on Wednesday.

image"This is an upwelling of frustration, a deep-seated desire for substantive change and a keen awareness of just how unfair and unequal our country has become," said the center’s director, Paul George, as protesters sang and waved signs at passing cars. "I expect to see these kinds of demonstrations happening weekly, daily."

As with the demonstrations in San Francisco and San Jose, the Palo Alto rally was held in front of a bank that received a federal bailout but foreclosed on jobless homeowners. "They got $45 billion in bailout money," George said, motioning to the Bank of America behind him, "and they continue to evict people from their homes."

imageOne reason the movement has caught on has been the 99 percent message.  Signs from the Occupy groups tell their stories, and the Tumblr blog We Are the 99 Percent allows anyone to send in a photo with their tale of financial fallout.  (Click the image at left for a larger view.) And there are so many of these stories.  The enormity of misery and how so many people ended up near-destitute in these tales is what sustains both the demonstrations and those who add in their stories to the blog.

Even in the Real Bay Area, where It’s Special Here, people are living paycheck to paycheck.  We’ve discussed some of these ideas on Burbed before, such as the banks’ imagefailure to foreclose on expensive homes, the huge amount of shadow inventory keeping home prices high, and the requirement for two incomes in order to buy even adequate housing.  Now rents are shooting up in both San Francisco and Silicon Valley.

For the most part, people who follow a real estate blog do so because they plan to buy or sell property at some point.  They are most likely in a better financial position than the typical resident.  So given that most of us are doing better than average (We Are the Top 50%), and that with incomes and home prices near the top of the entire country (We are the 1%), how are you feeling about your own financial prospects? 

imageWhat do you think about them now that a number of economists are admitting that yes indeed, we are in a full-blown Depression?  The drop in homeownership rates suggests a Depression as well.  Do you feel you’re the “rich” “they” want to tax, or do you consider yourself “middle class”?  Does “middle class” even make sense in an economy as atypical as ours, where a sixty year old tract house on 6000 square feet can sell for over $800,000?  Or a two-income family taking home more than $200K a year has little disposable income after paying for living expenses?  Or as someone recently asked on patrick.net, if you lost your job today, in how many months would you be homeless?

Comments (80) -- Posted by: madhaus @ 5:18 am

80 Responses to “We Are the 99th Percentile”

  1. PKamp3 Says:

    Day 30 of the protests = day 1 in Palo Alto! Sent from my iPad.

    In all seriousness, the amount of wealth (and income) in the Bay Area is staggering. The IRS tags the top 1% as $380,354 which is only the top 1.9% here. In the RBA you have to make $460,495 to be the top 1%!

    This site’s commenters are definitely better off than the average Bay Arean. The fact that people think twice before sinking their life savings into a $1,200,000 ranch means that there are still people who actually try to ‘afford’ things, as opposed to ‘hope they can eventually afford’ things.

    OP, I think you mean, we are the 53% with your doing well comment, haha. Let’s see if that blog catches on (I suppose its potential crowd is much smaller!).

  2. arnold Says:

    These protesters should be protesting Obama and Washington for not doing a damn thing. These protests will do little and cause Obama to lose the 2012 election. Our so called president does not have a PLAN.
    The government is allowing class warfare. Don’t protest…..GET A JOB. Most americans think the protesters are just cry babies because they have no motivation to get a job. There are plenty of jobs just not enough Qualified people for those jobs with education. Unemployment for College Grads is 5% with no degree it is 12 plus %

  3. madhaus Says:

    Arnold, I think you’ll find that most Americans agree with the protesters. The actual unemployment rates are far worse than the numbers you provide as well. Couple that with several years of college grads unable to find appropriate work, along with their non-dischargeable school loans.

    It used to be possible to work one’s way through college with a part-time job. No longer. Even state schools are too expensive to avoid loans. So we now have an economy where a degree is required, but you’ll take on massive debt to get one, and then too many grads can’t find work.

    You’re damned right the government is allowing class warfare. By derugulating everything under the sun, letting lobbyists write laws, and dismantling agencies that were supposed to protect people from pollution, fraud, graft, poison, shoddy materials…. Yes, the government allowed the very wealthiest to declare class warfare on everyone else.

    And they’re winning. So why do you object when the rest of us speak up against it?

    PKamp3, the 53 percent site is just sad. All those struggling people with disease, debt, three jobs…. telling the reader to stop whining. Those people have been duped into thinking they’re succeeding. They’re not. They’re barely keeping their heads above water, but hey, they can feel superior to the “47 percent.” They must find the 99 percent idea really threatening: no us versus them, oh no!

    You may find this response site of interest.


  4. arnold Says:

    Madhouse what poll are you looking at?? The only people that would agree are people think that they are entitled to take from the people that have worked hard ..ie own a business and or just worked hard. I think they are a bunch of cry babies. They should protest against are worthless government’s socialist ideas…..Why do you think they have no clearly defined leader or purpose of the protest but to just say “Its not fair”. The protests will solve nothing. Everyone I have seen protest so far are people that think they deserve a good job because they have a College degree BS….GO FIND THAT J.O.B. There is a SHORTAGE of Qualified applicants. Go cry me a river

  5. SEA Says:

    “Unemployment for College Grads is 5% with no degree it is 12 plus %”

    The other day I was speaking to a recent college grad, employed, but she suggested that so far the ROI on the education is negative. Her question was quite simple: When is my education going to pay off?

    You’d think she’s an underwater home owner; bad investment never pays, even if she’s technically employed.

  6. arnold Says:

    you really think a ROI on a college grad is ASAP??? Typically 5-10 years depends on your degree. Problem is we live in a give it to me now the Ipad and the BMW at the age of 22 not in your 30’s. You must earn it you don’t deserve it…yes that takes TIME

  7. madhaus Says:

    Have a look at this college debt graphic, via Greg Fielding’s blog (link on right, Bay Area Housing Trends).

    Arnold, I don’t see you quoting anything to support your arguments, so why don’t you go first. I just don’t want to bury you in stats.

    You’re going to love this, PKamp3. No less than ten of the photos on We Are the 53 percent are either outright fakes or modified. Many of them have 2003 dates in the EXIF data, suggesting they came from a common site. You DO know the site was created by Erick Erickson of RedState (with a CNN gig); he who threatened to shotgun Census workers should they visit his house, and then claimed he was taken out of context? What a lovely guy. Take a closer look at the signs, as some of them have the same handwriting. The ones from “foreigners” don’t read the way English is constructed by ESL speakers, either.

  8. madhaus Says:

    In response to arnold #4.

    What do the protesters want?

    Why is it so important to you that they have leaders? Grass-roots movements (as opposed to astroturf) usually don’t. That’s a sign the movement is authentic rather than scripted (like, say, the 53% blog). They have indeed issued a manifesto, which has too many, not too few issues.

    As to your statement of who would agree with the protesters (“only… people think that they are entitled to take from the people that have worked hard ..ie own a business and or just worked hard”) , you are demonstrably wrong. Have you checked out the 1% site yet? None of them fit your definition, yet they all support the protesters.

  9. SEA Says:

    #6- What’s the IRR of her education, and how many years to the cash flow break-even point?

    Please outline your assumptions.

    Would she have been better off simply entering the work force out of high school?

  10. SEA Says:

    Does education pay?

    CR suggests that “Education clearly matters, but does it pay? I think it does, but it depends on the cost of education and opportunity costs.”

    Also check out the cartoon by Eric G. Lewis.

  11. * Says:

    this isn’t a great depression.

    the working class were jumping out of windows and hoards of people were lining up for food back in the 1920s/1930s.

    when the “homeless”, let alone regular people, no longer have cigarettes, cell phones, and other amenities it’s not a depression.

  12. SEA Says:

    But it is a depression when they cannot afford their drugs.

  13. madhaus Says:

    It was the stockbrokers jumping out of windows, *. And maybe you should check out your neighborhood food bank or soup kitchen, they’re busier than ever.

    There were no food stamps in the 1930s, either.

    Remember, we live in one of the few parts of the country that isn’t getting pummeled. Talk to people who don’t live in a Creative Class metro area. You ever been to someplace like Victorville? I know folks there. People are really hurting.

  14. Petsmart groomer Says:

    Hats off to Lorraine Schmidt of Mountain View, who is showing us how it should be done:

    “The system is obscenely corrupt and people are starting to wake up,” said the 57-year-old Mountain View resident, who sold her home in 2008 and has been living off the proceeds.

  15. Petsmart groomer Says:

    > And maybe you should check out your neighborhood food bank or soup kitchen, they’re busier than ever.

    They’re not the only ones. Check out these lines here.

  16. madhaus Says:

    Those food banks are happening places! Look at all those people waiting in long lines for Apples!

    Help the Unemployed -- Apples 5 cents

  17. SEA Says:

    “you really think a ROI on a college grad is ASAP??? Typically 5-10 years depends on your degree.”

    I was just asked the question: Why should I go to school for 6 years to wait another 10 years for a return on my investment.

    That makes me wonder, what kind of a discount rate do you need to wait 16 years for a return on investment? And how do we know that after 16 years it will pay off? What happens if it does not pay off after 16 years of investment–you know, as #7 points out, there are many administrative tools to squeeze the blood out of those turnips.

  18. Divasm Says:

    Getting back towards the original questions, I remember a while back a guy in Chicago posted to his blog commenting on Obama’s plan to tax the rich, with “rich” being defined as any households with a combined income of $250K annually. I can’t remember what he did, but his wife was a pediatric oncologist (which means that she was probably still in debt, plus not a person I would accuse of intrinsically taking the easy way out of anything).

    His point was that just to live in Chicago in a decent house and send their two girls to private school – which is seen as necessary there for the same reason it is in SF, to ensure their safety and decent education – it costs well over $250K annually, but he wasn’t “rich”.

    His tiny blog post went viral and he was inundated with people insulting him of complaining of his hardships while sending his kids to private school. I would guess, however, that many of us regulars here can identify quite well with his position. $250K annually in a major metropolitan area is not rich, at best it’s upper-middle-class.

  19. DreamT Says:

    Even if an education with its loans result in financial breakeven over 20 years, it still can make the difference between having a job you dislike and a low quality of life, versus a job you like and much greater flexibility. Hopefully some of you realize that the financial aspect of getting an education ought not to be the primary reason for getting one.

  20. The Gilroy Alex Says:

    I went and read all those people’s handwritten signs on that site linked here …. I was going to type something snide about learning to economize but it sounds like they’re doing that, as well as they can possibly imagine doing so.

    It’s a HUGE change of gears to realize the way to win the “American Dream Game” is to imagine you’re an immigrant from say, rural Uganda and how do you get the essentials for life?

    I shit in a bucket. No shit. In fact a well run “humanure” system is, I think, more civilized than the water system, no nasty flushing sound and only the clean smell of earth or wood shavings, no odd toilet gurglings, funky water smells, or Ty-D-Bowl. I go out and harvest corn, beans, etc., dry tons, OK maybe not tons but a few hundred lbs, of fruit in the fall, I am one of those people with a foot in the economy, sort of, and a foot in the new agrarian future.

    But!! It’s a HUGE change of gears for the average American to shift over to living this way! I had to fish and forage as a kid in the Starving Seventies, I battled Mean Mr. Malnutrition back then and so I have a certain “Been there, Done that” attitude about the coming times. But the average American has not been through this. At least not anyone less than 75 years old or so. When you read those people’s signs, you can see they did everything you’re supposed to do, did everything right.

    I can’t hold myself up as any better than them, because I also did everything right. I just did it a decade or two earlier. Even then, doing everything right hurt me considerably. I never realized any ROI on college, it was a complete financial black hole. Going to college held my wages down for the time I was in college, and held them down permanently afterward. If I’d gotten no degree, or if I had to get a degree, gotten one in music, I’d have been FAR better off. (With music you can give lessons and play for tips on the sidewalk, a far more lucrative life than is possible in electrical engineering.) I paid my student loans off. I paid HUGE taxes, something like 25% to the Feds and the rest of the taxes and deductions which I never got back raising the total to 40% of my gross income. In my favor, I came from a culture of thrift so I never used credit cards, got around by motorcycle which is a bit cheaper than a car, got clothes at thrift stores etc.

    If I’d been born 20 years later I can see myself as one of these kids. My $12k or so in college debt would have been their $30k or more. The “ace of the base” electronics job I had at $11 an hour, would today pay about $8. I managed to pay off my college (and all those taxes) by the skin of my teeth, in fact an inheritance I got in the early 90s paid for my first car, and what was left of my student loans, about $5k as I remember it. The car may not have been a smart move, but paying off the loans was – money was to be scarce there for a while.

    I don’t know what these kids can do. I honestly think preppers/scroungers/survivalists are formed as such fairly early in childhood. This formation occurs naturally in all kids in say, Amish, or rural Ugandan, societies. In our culture kids are imprinted as button-pushers early on. A few escape this, but most are not growing up gathering berries and playing with anthills.

    So, maybe the best we can do is learn how to get away from the money economy and back to Nature’s economy as much as possible, and to teach kids of all ages how to do this.

  21. SEA Says:

    “Hopefully some of you realize that the financial aspect of getting an education ought not to be the primary reason for getting one.”

    Do you work for a school?

    As far as that quality of life issue, there are too many who are overburdened with student loan debt.

    As always, look both ways before crossing the street. Don’t swim in shark infested waters. These are not lessons that are best learned the ‘hard way.’

  22. DreamT Says:

    “Do you work for a school?”
    No, however I like what I do for a living and I have a school to thank for that.

  23. SEA Says:

    It’s too bad all education investment doesn’t pay off so well.


  24. SEA Says:

    “But for 27-year-old Mike Kremen, a law degree landed him a job as an assistant manager at Radio Shack.

    Kremen graduated from Pace Law School about two years ago – right when the recession was picking up and the legal industry started to hemorrhage jobs. He’s still waiting for his first full-time legal job offer. He says he might be the only employee in the history of this White Plains Radio Shack who’s passed both the New York and Connecticut bar exams.”

    “See how well law school paid off for this guy?!?! He was licensed in New York and Connecticut, and ended up making $7.65 at Radio Shack!! This piece was published, on April 8, 2010.”

  25. DreamT Says:

    Yes SEA, it’s too bad indeed. Hope you’re having a good Sunday yourself.

  26. SEA Says:

    It’s too bad all education housing investment doesn’t pay off so well.

    Another example of bad investment.

  27. sprezzatura Says:

    I’m one of the lucky ones. I left college with no debt thanks to my family. I did take on debt for grad school, which I am paying off on time. It’s a drag but it was my choice to do so.

    I got an MBA because when I was out of work, I noticed that the people I knew with MBAs were having a somewhat easier time finding a job than I was.

    I’m getting paid better post-MBA and have a job I love. I have never done a full-out ROI calculation on my degree but I don’t feel that it was a waste of my time or money.

  28. madhaus Says:

    Okay, but everyone sharing your life decision stories, please include when you got the education. Because the cost has gone up a mind-boggling 450% in the last 25 years, while inflation has gone up… 100%.

    And it seems things got worse over the last 10 years.


  29. The Gilroy Alex Says:

    IF ….. parents will let their kids keep the money they earn from say age 14 on, the kid can generally finance their own college degree. Unfortunately, at age 14 it was hard for me to conscience keeping any money I made while my siblings would have gone to bed hungry. And if I didn’t spend my $2-$3 I made on a good day on dinner, it would get stolen anyway.

    But a lot of families, bizarre as it seems to me, did and do not have things that hard. They can let a kid put their savings in a bank account without anyone going hungry because of it. IF …. the family will let a kid earn and save it up, and let the kid stay in the garage or a garden shed or anything while they go to State…. the college degree can be done with no borrowing. If the kid gets their Bachelor’s and wants to go on, generally there are enough grants and teaching work to do advanced degrees without borrowing. So it’s possible, IF your parents have the mentality of immigrants. NOT so possible if they are typical Boomer parents: “F*ck you kid, I want you out of the house at 18, you’re not getting dick for college money because we spent it on fun, No you can’t stay in the garage while you go to State, you’re on your own!”

    College is great, but not worth going into debt for. A degree in music would have made much more sense for me, since it always = earning power. Engineering, high tech, I could have read about and built stuff etc as a hobby. High tech is a fine hobby, and I encourage people to learn about how things work. But to count on it for a living, is just pie-in-the-sky thinking. Music or leathercraft or basket-weaving, something solid, has to be learned to keep you in steady income.

  30. sprezzatura Says:

    Music == steady income? Are you nuts?

  31. PKamp3 Says:

    Haha, yeah, the 53% site is a joke… and you have to believe that whatever gets paid into the payroll tax is going to come out completely on the back end. It’s (almost) a given that promised benefits won’t be there for most of the people who pay into Medicare/caid/Social Security. I can’t buy that, and I am counting on $0 a month from Social Security when I go to collect.

    Higher education does lead to better results – but saying college degrees automatically pay off is disingenuous. But note (BLS Numbers, Sep. 2011, SA): No High School Degree 14.0% unemployment, Bachelor or Higher 4.2%. How much of that is self selection – people with degrees would have degrees anyway if they never graduated? Hard to say. It’s also dependent on which degree you choose – so choose wisely.

    One comment on education costs: if you want to see educational inflation increase faster (and have the government seize the rest of the student loan business for political reasons) allow student loan debt to be discharged in bankruptcy. Loan rates will increase overnight – it’d be good for those who actually can’t meet the debt burden, but bad for education costs and debt burden upon graduation.

    #30 – YHBT, haha. Read the comment again.

    #28 – Still paying student loans, majored in CECS. High tech is a fine day job!

  32. SEA Says:

    “How much of that is self selection – people with degrees would have degrees anyway if they never graduated?”

    How does that work?

  33. SEA Says:

    “allow student loan debt to be discharged in bankruptcy. Loan rates will increase overnight – it’d be good for those who actually can’t meet the debt burden, but bad for education costs and debt burden upon graduation.”

    How could educational cost burden increase if the debt could be discharged? You’re not actually suggesting that debt levels would go up if student loan debt were allowed to be discharged?

  34. PKamp3 Says:

    I mean that, to some amount, a degree may not matter at all. So you might be able to take some people from the universe of degree holders, take away their degrees, and they would get jobs anyway. That’s something that’s impossible to quantify, however.

    Yes, it’s possible that total debt would increase if loans were BKable. The student loan rate would increase if loans could be discharged, so if they same amount of money is taken out there would be a higher burden. However, it’s possible that the number of loans that get discharged due to BK would exactly balance it out (or even more BKs than repays, so it could drop), so it could go either way. The only thing that you could guarantee is rates would go up.

  35. PKamp3 Says:

    Oh sorry, I see what you meant! It should read: people with degrees & jobs would have jobs even if they didn’t have degrees.

  36. SEA Says:

    “The only thing that you could guarantee is rates would go up.”

    This is the ultimate debate in the housing industry. There are those who claim that when interest rates go up, the cost of housing will simply be more for those taking on new debt. You know, when rates are 10%, you’ll pay the same or more for that house, even if you cannot afford an extra 25 cents for a gallon of gasoline, or an extra dime for a gallon of milk.

    If student loan rates go up and if the debt may be discharged, my guess is that lenders would be very careful as to who they loan money to. Would you loan money to some student with no income?

    With higher interest rates I’d expect that there would be far less investment in education, and thus, less debt.

    Next we could discuss total servicing costs, both in terms of cash flow and interest expense. Lower debt with higher rates–which one wins in terms of total interest expense? Given the condition of the total economy, where people cannot afford an extra 25 cents for a gallon of gasoline, I simply don’t see how more money could be paid in interest.

    If we suddenly realize large increases in productivity, or a major advancement in innovation, then maybe increases in education investment would be justified.

    What do you think of that really big school, by number of students, is the investment, time and money, worth the end result?

  37. DreamT Says:

    “If we suddenly realize large increases in productivity, or a major advancement in innovation, then maybe increases in education investment would be justified.”

    Increases in education investment *predates* increases in productivity and innovation. Education has to be a loss-leader to be the most effective. Or did I completely misunderstood your point?

  38. SEA Says:

    #37- Let’s start here: What do you think of that really big school, by number of students, is the investment, time and money, worth the end result?

  39. The Gilroy Alex Says:

    #30 – Absolutely.

    In my own experience, I worked for minimum wage while going to college, gradually, got up to $5 an hour (this was in the early-mid 1980s) and had to borrow money simply to be able to eat and sleep under a roof while in college. If I’d aimed toward a music career, I’d have likely had the skills fairly soon to play on the sidewalk in the local tourist area, play the coffee shop circuit, etc and made more money. Getting the degree would have helped me get a well-rounded musical education, for instance they kind of force you to learn to read music. All kinds of clubs, restaurants, piano bars etc downtown. A decent piano player could make $40k or more and this was back in 1985 or so. Knowing music, being skilled on an instrument, means being able to get up on any given day and say “I’m gonna make some money!”. Try doing that as an engineer!

    Engineering is interesting and a fine hobby, but music has been around for thousands of years and it’s not showing any signs of going away.

  40. The Gilroy Alex Says:

    Oh, I need to add, working for a high tech company from when it was a handful of employees, my pay was locked at $5 an hour. It went up when I moved to their repair department, and only got to do that because they knew I could crank out a lot of work. Then, I started at $9.50 an hour, and gradually over a few years it went to $11. I’m sure that same job would pay about $8.50 now.

    There were no other tech jobs to go to so I could not just “go work for someone else”.

    Waiting tables would have been a big jump up (leftovers and tips!) and Radio Shack would have probably paid better without all that college nonsense.

  41. The Gilroy Alex Says:

    To go for the triple-play here, let me talk about a fellow named Samuel F.B. Morse. He’s the guy who got the telegraph working as a viable technology. He was an artist, and the telegraph, something like 20 years of very expensive futzing around and burying wires and laying cables out to islands, was paid for with art. Art was the bread-and-butter activity, engineering the expensive hobby that may or may not pan out. This was the early 1800s, just before the Industrial Revolution got big. This may well be the same sort of economy we’re heading back to.

  42. ms Says:

    Boomers are HELOCing their paid off, 1970s Prop. 13 houses on behalf of their kids’ educations.
    I see this all over the place.

  43. Alex Says:

    I’m not a lazy hippie but I support Occupy Wall St.

    I support it even more if there are slutty, hot redhead and Asian women around. =)

  44. ms Says:

    Geez, Alex,
    Shoulda been in Chatsworth in 2006…

  45. ms Says:

    “Occupy Palo Alto” makes it difficult to believe that “occupy” will work.

  46. The Gilroy Alex Says:

    I’ve seen University Avenue go into full-on police state mode. It was back in 2006 or so. There were some …. student protestors …. I forget what the issue was but it was something like a weak shadow of today’s Occupy movement. Just enough to just show a pip on the radar. So, some of these kids started doing their thing and the police response was amazing. All streets leading to University shut down. Cops everywhere. You could leave University Avenue but not enter, so shortly there were essentially no people other than those just leaving restaurants – they got the message and headed for their cars and home. Huge cop SUVs all over the place. I wandered around kinda playing dumb so I got to observe a bit, then I too decided to just go home.

    BofA just plain sucks. I called them the Bank Of Beavis and Butt-Head years ago and swore off ’em.

  47. SEA Says:

    Anyone with a child that’s been accepted into a top school, should, at least in my opinion, make it happen.

    Beyond that, the decision quickly gets far more complex, but in no case can I recommend a poor quality education for high cost, and one never can get the time back.

    I note that no one is coming forward to defend that large school…

    For those of you who seek to maximize benefit, here is Edward B. Fiske’s list of 2011 top music schools:

    * Berkele College of Music – A Mecca for the non-traditional and non-conformist.
    * University of California at Los Angeles – The leader among West Coast music schools.
    * Carnegie Mellon University – Unusual for its combination of arts and technology.
    * Curtis Institute of Music – The best school of music not located in New York.
    * Eastman School of Music – Leading school with ties to University of Rochester.
    * Indiana University – Leading music program in Big Ten country.
    * Juilliard School – The Harvard, Yale and Princeton of arts schools rolled into one.
    * Rice University – Small university with the Southwest’s biggest reputation in music.
    * New York University – NYU’s music programs are national leaders in all things arts.
    * Oberlin College – Combines liberal arts with a competitive music
    * Yale University – The Ivy League’s premier music school.


  48. Alex Says:

    ms, what’s Chatsworth?

  49. Greg Fielding Says:

    arnold writes:

    “Madhouse what poll are you looking at?? The only people that would agree are people think that they are entitled to take from the people that have worked hard ..ie own a business and or just worked hard. I think they are a bunch of cry babies.”

    It’s more complex than that when you look at society as a whole instead of as a collection of individuals. For example, if society can only provide 8 jobs for every 10 adults who want them, we have a fundamental problem. Any individual can be blamed for being lazy or told to start a business, but there still aren’t enough jobs for the masses. This is not sustainable.

    Consider as well issues like the exploding cost of college tuition, fueled by student loans that cannot be discharged in bankruptcy. This is a criminal racket that is saddling an entire generation with debt they will never be able to pay back – all because bank lobbyists will prevent congress from allowing BK discharges.

    This isn’t a movement about a few lazy individuals, but, hopefully, from the masses who realized they’ve been fleeced by the well-connected for 30 years. The income inequality gap has grown too large for there not to be a revolution of sorts. Maybe OWS is the start of it.

    And I’m no lefty. Here’s why I support it: http://bayarearealestatetrends.com/2011/10/17/why-i-support-occupy-wall-street/

  50. madhaus Says:

    Sure, you’re no lefty, Greg. Or did you forget what I called you when I put your other student debt piece on the front page of Burbed?

  51. Greg Fielding Says:

    I just checked… “This Greg Fielding makes too much sense. He almost sounds like a Socialist.

    It’s an interesting way to sell houses.”

    I’ve got kids – so I’ve gotta do whatever I can to pop the student loan bubble before they get to college!

  52. SEA Says:

    “if society can only provide 8 jobs for every 10 adults who want them, we have a fundamental problem.”

    While I appreciate the ‘want’ idea, let’s combine this in the education discussion:

    If society can only provide 8 jobs for every 10 adults who spent time and $$$$ on an education, an still owe $$$$, we have a fundamental problem.

    Sure, get your college degree and you’re more likely to be employed, even if your net return on that education is negative (unfavorable)–but you are likely employed! Oh, if you are one of the unlucky college grads who cannot get employed for some reason, sucks to be you, because those student loan obligations are not going anywhere. When you finally do get employed, you’ll just owe more.

  53. SEA Says:

    John G. Sperling is down to $1.1B.

  54. ms Says:

    Chatsworth is a city in the San Fernando Valley. During the years of the housing boom, Chatsworth became exponentially known as a centre of the American pornography industry.
    Shoot, I hope I don’t get banned, but there is your answer.

  55. Jane Says:

    Those who are saying the protesters should go get jobs, have you looked at the stats?? Do you know how many jobs have left the US never to return?? Unless they want to commute to China or India there are no jobs. Why because the wealthy keep wanting to increase their profit margins so they send their businesses over seas. All overseas business should have huge tarriffs placed on them, so high that they will break even to bring services and goods back into this country for sale. Then you would see that stop, because they aren’t selling a $200.00 pair of basket ball sneakers (that cost $1.00 to produce) to anyone in Indonesia. The 99% need to start boycotting, stop using their banks, pay off your debt or tranfer it to a credit union or local bank. Stop buying new, buy used or on e-bay from one another because here’s a news flash, whatever money the wealthy are taking in is not being re-circulated into the economy that is a fact. Corp American/Big Banks have pulled a good deal of wealth out of circulation that is why the middle class is disappearing. Only do business with the 99%. That should be the new motto. The are deliberately trying to collapse the economy so they can introduce a global currency under their New World Order.

  56. SEA Says:

    “For profit educational institutions attract otherwise unqualified, non-traditional students with the hopes of getting a college degree. Typically these students take out expensive loans and then find that employers are not too impressed with the degree. The students are therefore left with large debt loads and few employment prospects.” -Jim Chanos

  57. nomadic Says:

    SEA, wasn’t one of those large diploma mills recently sued for advertising that their grads find jobs, when really they were just fleecing the students? I thought I heard of a big settlement but don’t feel like looking it up.

  58. nomadic Says:

    Oh yeah, it was a culinary school. Just remembered as I hit “submit.”


    Fark filed the headline “Culinary School grads file a class-action lawsuit after discovering that shelling out $50k for culinary school only qualifies you for an $8/hr gig as a line cook” under obvious.

  59. SEA Says:

    Are you talking about that really large school?

    How about we start here:


  60. SEA Says:

    #58- From the link, “As we reported online last week, former CCA students recently received notice that the school’s parent company, Career Education Corporation, had agreed to pay out more than $40 million to settle the suit without admitting wrongdoing.”

    CECO is a major player in the industry. While I don’t analyze the restaurant industry as much as some others, the Le Cordon Bleu schools do appear to produce some very good results. Is it worth the cost? I don’t know, but I suspect the answer is yes for many students. I don’t personally classify the CECO schools as bad, but, as always, there are going to be those students who don’t make it.

    Two comments:

    First your article has a date of Wednesday, May 4 2011. This is before the major rule changes, which took effect July 1, 2011.

    Second, if you expand your search, you’ll find other lawsuits.

  61. madhaus Says:

    SEA, you’ve mentioned “that really large school” a number of times on this thread. I still have no idea what you’re referring to, unless it’s that story you didn’t post any link to in post #24. If that’s from Third Tier Reality, then provide a direct link, not the front page.

    Suggestion: if nobody responds to a comment, maybe there’s either nothing to say, or you haven’t provided enough information for a discussion.

    Related: There are many “law school scam blogs” (I spent all this money for law school and never got a law job). The New York Times did a great writeup about them this January. In particular, check out this article about a blog written by a Law Professor at a T14 school.

    The whole thing’s coming together with several of these LSSBs linking to OWS blogs.

  62. SEA Says:

    Here are the CCA disclosures about employment and graduation rates.

  63. SEA Says:

    #61- There is only one and it overshadows all others: UOP.

  64. SEA Says:

    From the Forbes link (#53) “Apollo is the country’s largest private university, but its shares have hit the skids over last 12 months, falling 30% (along with similar drops in share prices of Apollo’s competitors in the for-profit education world). The Department of Education closed its review of how the University of Phoenix, Apollo’s largest unit, handled financial aid funds after questions rose following high dropout and default rates. DOE said it made no adverse findings. Both Apollo’s founder, John Sperling, and his son, Peter Sperling, have been dumping shares over the past year. Stock drop hit John Sperling harder than son because the elder Sperling owns nearly double the number of shares as son Peter. John left humanities professorship at San Jose State University in 1976 to start the University of Phoenix; son Peter joined in 1983. Apollo went public in 1994. Today 400,000 students take classes for associate, bachelor’s master’s and doctoral degrees.”

  65. SEA Says:

    It’s like shooting fish in a barrel:

    The Department of Justice and four states on Monday filed a multibillion-dollar fraud suit against the Education Management Corporation, the nation’s second-largest for-profit college company, charging that it was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011.

  66. nomadic Says:

    #60, like the lawsuits against Le Cordon Bleu?

    I’d say I don’t give a crap, but I do – only because tax funds are going to waste supporting these schools. BTW, the original article I posted talks about the ridiculous new rules. Now schools lose Fed money if fewer than 35% of students pay back their loans. Big deal. Jerry Brown says at MOST 24.6% can default in the first 3 years for CA money.

  67. SEA Says:

    From #37, “Increases in education investment *predates* increases in productivity and innovation. Education has to be a loss-leader to be the most effective.”

    to #66, “I’d say I don’t give a crap, but I do – only because tax funds are going to waste supporting these schools.”

  68. madhaus Says:

    Long, long, long ago, among the many jobs I’ve had, I worked for a brief time for a small husband-and-wife firm that handled financial aid for trade schools. They did the paperwork, and they came after the people who didn’t pay back.

    The husband was like some dude out of a Firm-owned pizza joint. Big, hairy, quick to anger. He didn’t deal with the worker bees. The Wife handled us.

    I got this job (my title was Grant Accountant) as one of many I had while “working my way through college.”) It paid better than working in the cafeteria or library (I much preferred working in the libraries to cafeterias). It was all done with pencil and paper. No computer, not even a hint of one. Typewritten letters that said the same thing over and over, congrats on your loan, you didn’t pay your loan, you owe us X plus Y in interest and Z in collection fees for your loan.

    I think I lasted about two and a half weeks there. So many letters to young adults who weren’t paying back their loans to beauty school and the like. This was before the peak of the early 80s recession.

    I went back to working in the library and checking people into dinner.

  69. nomadic Says:

    #67, you’re over-simplifying.

  70. SEA Says:

    #69- If we went back 10-7 years, those crappy degrees were worth much more, at least initially. The economy was so hot that there was, roughly speaking, a good job for anyone with any degree, no matter the quality. The default rates remained low until, one day, there were larger problems in the economy, and not one school is to blame, but recent graduates from certain schools felt the pain more than graduates from other schools.

    One example where a guy is really upset is a person who went to a local community college for construction. He had a job in the industry, and once he earned his associate’s degree he was all but guaranteed higher pay from his current employer.

    Oops, cannot get that pay increase from a bankrupt entity. Oh, and when he went looking for other employment, it was not easy.

    Blame the school, I suppose.

  71. nomadic Says:

    There has always been an RBA-equivalent for schools. When has it EVER made sense to spend $50k on culinary school?

    BTW, on an un-related note, has anyone ever looked at the jobs filled by H1B visa holders? I checked several years ago and was dismayed by the number used for cooks in the big chain restaurants. I expected the majority to be used for skilled workers.

  72. SEA Says:

    #71- RRRRRealness!

    RRRRReal school = Stanford, and a few others => guaranteed to double your investment in 10 years or sooner.

    Real School = Down the range some => likely to get a good return on investment.

    Then we have all the other schools, which, like buying outside of the RBA, is likely a bad deal.

  73. SEA Says:

    “When has it EVER made sense to spend $50k on culinary school?”

    You can be in the educated and employed category instead of uneducated and unemployed. (See #2 “There are plenty of jobs just not enough Qualified people for those jobs with education. Unemployment for College Grads is 5% with no degree it is 12 plus % ” & #31 “No High School Degree 14.0% unemployment, Bachelor or Higher 4.2%.”)

    Which statistic do you want to be?

  74. nomadic Says:

    The jobs the culinary school grads (at least the sub-set we are discussing) were getting did not require specialized education. McDonald’s will train fry cooks. Those folks could get their low wage job without the debt.

  75. SEA Says:

    “Those folks could get their low wage job without the debt.”

    See messages #5, #9, #10, #17,…

    Although, the gal in #5 likely wouldn’t have got the job without her degree, but her gain probably isn’t worth the cost, at least not at this point. #17 discusses how quick a degree should payoff in terms of discount rates.

    Where is the break-even point in terms of pay? If one gets the same pay without the cost, as you suggest above, then it is clear to eliminate the cost. If you spend $1 to get a $0.50 return, it’s still a bad deal, but better than the first case. If you spend $1 to get a $2 return right away, and for many years thereafter, that’s a good education.

    The NPV of a given education requires some crystal ball assumptions, and #22 would insist on valuing how much a person “likes what he does for a living.”

    I know a guy who works for a police force. He spent $$$$$$$ on what I would consider a totally worthless degree from what I consider to be a totally worthless school. ***BOOM*** Almost instant promotion. A BIG PAY INCREASE for him. That’s your police force tax dollars at work.

    Hopefully it pays off for him, because, unfortunately, on the open market he’s likely to find the attitude outlined in #56.

  76. Petsmart groomer Says:

    > When has it EVER made sense to spend $50k on culinary school?

    CIA maybe?

  77. Petsmart groomer Says:

    > BTW, on an un-related note, has anyone ever looked at the jobs filled by H1B visa holders? I checked several years ago and was dismayed by the number used for cooks in the big chain restaurants. I expected the majority to be used for skilled workers.

    Looking at this, there does not seem to be that many cooks.

    One notable exception: Mayo Clinic with 67 H1-B petitions approved.

  78. ms Says:

    These cooks should work in SF, where the minimum wage is around $11.

    That said, you can be not young, have multiple degrees from a school as recognizable as The Farm, and still be working near that $11, because there’s no choice.

    Even if you weren’t addicted to heroin, it happens.

    Even if you didn’t major in something that became obsolete, it happens.

    Lots of stuff went obsolete relatively quickly.

    Aerospace engineering, system analysts, mortgage brokers, nurses, prison guards, financial letter-writers, and yes, pornography performers: All had a moment in which almost all made money. A few still are, but most now aren’t or soon won’t be.

    Who went or didn’t go to a school as acclaimed as The Farm or for that matter California Culinary Academy is irrelevant.

  79. nomadic Says:

    Potential help for students overloaded by school debt:

  80. SEA Says:

    #79- The biggest help will go to those who are just entering repayment:

    “Congress passed a law set to go into effect in 2014 that would drop the monthly payment to 10% of discretionary income and would forgive all debt after 20 years. The Obama administration would improve on the law by fast-forwarding the new terms to take effect in 2012, sources say.”

    That 20/25 year clock starts when the income contingent plan is started and the loan is in repayment, so the 20/25 year clock would start today if someone were to switch payment plan.

    Also forgiven debt, including accrued interest, is generally taxable. You know, since you didn’t have the cash to pay the debt, the IRS will hound you for the income tax due.

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