
The High-Heel Bubble never popped, and the Education Bubble may not either - yummyfajitas
http://crazybear.posterous.com/higher-education-may-not-be-a-bubble
======
kungfooey
The author only addresses one side of the equation. The other side is the
person who makes the loan. This bubble has a lot to do with the ease of which
a loan can be obtained - thereby driving up the price (see: Housing Bubble).

The bubble will begin to pop when enough students start defaulting on the loan
(by not working or getting paid under the table), not when potential students
come to the realization that it is overpriced.

~~~
yummyfajitas
It's quite possible that if the government guarantees for student loans are
removed, speculators will increase the price of loans and reduce education
spending a bit.

But I suspect the result won't be a bubble popping, but merely a leveling off
at a higher level.

~~~
lkrubner
Your remark is reminiscent of "Stock prices have reached what looks like a
permanently high plateau."

Are you aware what an awful history lies behind the idea of "merely a leveling
off at a higher level"?

That is not how markets work. Things go up and down, they do not stabilize for
any length of time.

The above quote is famous because it was terribly wrong, and it came from a
respected voice. In the USA, the recession had already begun, which later
developed into the Great Depression.

For context:

"Stock prices have reached what looks like a permanently high plateau. I do
not feel there will be soon if ever a 50 or 60 point break from present
levels, such as (bears) have predicted. I expect to see the stock market a
good deal higher within a few months." \- Irving Fisher, Ph.D. in economics,
Oct. 17, 1929

He said this 12 days before Black Monday.

<http://www.gold-eagle.com/editorials_01/seymour062001.html>

I recall some economics blog, it was either Calculated Risk or Paul Krugman,
pointed out several examples of "a permanently high plateau" being applied to
the USA housing market circa 2005-2008. It is remarkable how often this phrase
gets resurrected, and always just before some class of assets is seen to be
losing a great deal of its value.

~~~
yummyfajitas
_Are you aware what an awful history lies behind the idea of "merely a
leveling off at a higher level"?_

As far as I know, this sometimes occurs and sometimes does not.

Automobile consumption seems to have increased and remained stable and is only
likely to change in response to changes in fundamentals (e.g., oil prices
increasing).

In contrast, housing increased for speculative reasons, and the bubble burst
with no changes in fundamentals (i.e., it was not precipitated by a drop in
population).

I postulated a game theoretic reason why our current high-education state
might be locally stable (i.e., changing only in response to fundamentals)
rather than merely a bubble. Do you have any arguments against this besides
"other people made similar claims, and I can find a few cases when they were
wrong"?

------
rdouble
The bubble metaphor seems a bit overextended. Here it seems to mean any sort
of trend. By this article's usage, we've also been trapped in a long term
bubble of wearing pants, sitting in chairs, and drinking out of cups.

~~~
yummyfajitas
Upon rereading, I realize it isn't clear that I'm arguing that we aren't
observing a speculative bubble in education, but something considerably more
harmful. I've edited the post to (hopefully) make this more clear.

I merely used the term "education bubble" as a way of referencing a continuing
conversation.

~~~
rdouble
The article reads like current trends in higher education are as harmful as
wearing high heels.

~~~
gojomo
Isn't it possible they're _more_ harmful? Wasted life years, misalignment of
courses with interests, debilitating debt?

------
kevbin
My life-long, unscientific, uncontrolled observation of the sample space shows
a strong inverse correlation between heel-height and years of formal
education. A crude approximation of initial results shows a curious
trifurcation at 16 years:

{[0,12) => <Lucious, 8" Stilleto Pump, Lucite>

,[12-14) => <Ellie, 5" Pump, Leatherette>

,[14-16] => <Steve Madden, 3" Pumps, Leather>

,(16-]† => <Ferragamo, 4" Pumps, Italian Leather>

,(16-]†† => <Ecco, Flats, Natural Materials>

,(16-]††† => <Birkenstock,Sandal, Vegan BirkoFelt> }

† professional school

†† graduate school, science

††† graduate school, social-science/humanities

------
pavel_lishin
An individual has all the reasons to defect if they believe that their time
and money would be better spent, e.g., starting a company and profiting off of
it rather than sinking their time and money into a degree.

~~~
incomethax
Not only that, but an individual company (as a single rational actor) has
every incentive to hire workers with less "perceived" credentials and more
actual work credentials.

Part of the reason I believe the education bubble is a bubble and will pop, is
that the entire point of an accredited degree is to have a recognizable proxy
for someone's intellectual capability. The ease at checking a person's ability
prior to the internet and social media was in checking with their alma mater
if they had the degree that they had and therefore if they were as capable as
they claimed. Now it's even easier to check if someone has the intellectual
capability by looking at their blog/github repo/facebook/twitter.

With that in mind, I think its only a matter of time before that starts to
translate into educational institutions competing with industry for students.

~~~
hga
" _[...] the entire point of an accredited degree is to have a recognizable
proxy for someone's intellectual capability._ "

Indeed, but the college degree is used for this because most of the former
methods have been outlawed (or in the case of the high school diploma watered
down to uselessness).

I don't find it impossible to imagine the government outlawing the new sort of
Internet based investigations or enough people getting wise to the game to,
well, game it.

------
nicetryguy
I don't have to take out a 10 year loan to own high heels

As a college educated individual, this may be the dumbest thing i have ever
read

~~~
joe_the_user
Yes,

It's a transparent abuse of analogy.

"Bubble" is short-hand for a self-reinforcing financial/psychological dynamic
which drive irrational investment patterns. Not every trend is a bubble, not
even every exponentially-expanding trend is a bubble. Cigarette smoking, for
example, expanded exponentially to virtually every nation on earth once
tobacco was moderately widespread level. Epidemics often follow exponential
growth patterns too but are not "bubbles".

Bubble are specific to the investment process because the investment process
is where prevailing beliefs can drive short-term prices but long-term prices
requires more "fundamental" qualities. Just as much, since a bubble dynamic
requires not just high but expanding prices, bubbles are limited, at the
minimum, that total amount of investment funds of a society.

Now, it should be noted that the investors driving an "education bubble" are
not the "education consumers" - these consumers don't even have any money! The
real investors are the government and the educational institutions. Together,
this group is shoveling money into the education system with the expectation
of getting more back later, with interest. For-profit educational institutions
add to this dynamic by allowing unlimited further money to enter into the
equation. That government guarantees this racket and doesn't, itself, expect a
profit, only heightens this "problematic dynamic" (like the home-loan scam
only "pre-bailed out").

------
cageface
Women buy heels for their aesthetic effect, not because they are beholden to a
500 year old meme.

~~~
drcode
I'm not so sure- Men tend to prefer shorter women, aesthetically. Heels
therefore may be anti-aesthetic and more of an economic signal, though I can't
site any specific studies to substantiate this.

~~~
rdouble
Women don't buy heels to impress men, they buy them to impress women.

~~~
kevbin
A good shoe-picker impresses both men & women: Few men are capable of the
mental gymnastics required to overcome the effect of Salvatore Ferragamo or
Jimmy Choo on observed leg-body proportionality. Many women are aware of this
inability and impressed by successfully leveraging it.

~~~
rdouble
Only a certain type of man can tell the difference between a Jimmy Choo and a
Salvatore Ferragamo and that type is immune to the effects you are thinking
of. For the rest, the Payless knockoffs will do the trick.

~~~
kevbin
Agreed, males capable of differentiating between Choo and Ferragamo do not—to
a first approximation—figure into the first-order reproductive strategy of the
subject.

However, Choo and Ferragamo provide both offensive first-order and defensive
second-order improvements to a given shoe-chooser's strategy.

Well-designed shoes enhance leg-torso-proportionality without triggering the
"Hollywood & Vine" effect in the target.

Shoe-chooser cohorts (competitive or collaborative) incorporate their analyses
of the chooser's tradeoffs into their feedback and behavior. Expressions of
peer support ("props" in the vernacular) or criticism ("dis" in the patois of
the street) respectively enhance or degrade the chooser's perceived
desirability. A designer pedigree increases the probability of a "dis" being
countered by a "prop", mitigating the Ho-Vine effect and further increasing
the chances of the shoe-chooser successfully reproducing at her sub-optimal
leg-torso-proportion.

------
Gianteye
I'd rather the headline read "hasn't popped" versus "never popped". It implies
there's some force keeping the high heel bubble (whatever that may be) from
popping in perpetuity, and seems to draw a connection to the education bubble
doing the same.

This is like an article in 2007 reading "The High-Hell Bubble never popped,
and the Housing Bubble may not either."

~~~
jpadvo
That is exactly what he claimed -- that the situation with high heels is in a
stable equilibrium. Barring some kind of outside influence, stable equilibria
remain in their state indefinitely.

~~~
Gianteye
But the author doesn't state why that equilibrium cannot change. He states
that is hasn't, which is different.

It's the difference between a double blind experiment and an epidemiological
survey. One attempts to isolate a mechanism that is predictive, another
attempts to explain historical trends.

~~~
yummyfajitas
I don't claim that equilibrium can't change.

A speculative bubble is not an equilibrium. It will inflate and pop all on
it's own accord. The housing bubble inflated and popped without any underlying
changes in fundamental factors (e.g. population).

In contrast, a Nash Equilibrium based on signalling will inflate and remain
until some fundamental factors change. Women will continue to wear high heels
and people will continue getting unnecessary education until these activities
stop being a means of obtaining status.

------
scotty79
High-heel is not social pit you can't crawl out because of possible peer
ostracism.

Most of the movement men were conditoned to perceive as womanly comes from
simple mechanical attempts of a female trying not to fall of the high heels.

To quit that, all woman would have to pass on advantage of using fairly easy
way to tap into male conditioning for at least one generation.

------
Tichy
Isn't the solution to the education problem to simply party as hard as you can
for four years?

------
absconditus
I doubt that our economy would be seriously damaged if the "high-heel bubble"
popped.

~~~
sliverstorm
Considering what women's shoes cost, maybe it would...

