“The purpose of the education is to free the student of the tyranny of the present.”
~ Cicero
Written by Bryan Lutz, Editor at Dollarcollapse.com:
Last month, Scott Galloway, a fairly public and well-educated Professor from New York University gave a presentation at this year’s ‘TED Talks’ called:
‘How the US Is Destroying Young People’s Future’
Mr. Galloway is no fool. He’s received and lectured at some of the nation’s top universities. Yet, if you were to watch his talk you wouldn’t be watching an economist, or even a financial analyst do their work.
You’d be watching an entrepreneur cast their vision for America…
A vision which involves the pursuit of education.
And if you read this past Sunday’s message on Capitalism and Morality, you would’ve seen how I thought education to be a top priority for surviving and thriving during a collapse.
The more you educate yourself, typically, the more value you can provide to others. The more you get paid.
So, he’s going in the right direction.
And he knows his audience.
Most students are starving. They eek out their existence sweating over lectures, labs, and part-time jobs that pay minimum wage.
Some even work day and night through the summer saving for next year.
And that means, Galloway knows what his students need:
A higher minimum wage!
Without knowing the effect raising minimum wages has on the majority of fast food chains, warehouses, and retail stores Galloway recommends it across the board.
Here’s what actually happens:
When you raise minimum wages, businesses are forced to raise their supervisor’s wages as well as every employee. The result is less staff, which results in higher prices and poor customer service.
But higher minimum wages are needed because of the cost of living, he opins…
It couldn’t have been the result of anything else. For example, like what the Federal Reserve has done to our money. The more money is printed, the more asset prices, and cost of goods rise.
Plus, the rich use their access to easy money to buy those pricier assets like income real estate, and private businesses before their cost goes up.
Here’s the next piece his education puzzle:
Increase government subsidies to higher education.
Government subsidies to universities allow them increase wages of their administrators and teaching staff, while at the same time, they raise the price of tuition.
Because they know the government will provide more loans for starving students.
Lastly, Galloway believes the money can come from the stock market bubble…
Simply, tax those who make gains from “the bubble” and redistribute the wealth to education for all.
That can’t actually be done.
Many of the big gains in a financialized economy come from the derivatives market, which depend on counter-party risk.
And that means, there has to be money available to payout when someone makes a good option trade, or shorts a particular stock.
If there’s no money to pay out, that’s called… bankruptcy.
Maybe Galloway was talking about overvalued stocks, but he’d still need to work out the actual value of the stocks before shaving a little bit off the top.
Overall, Galloway has the right idea. Education is a top priority for the individual, and a hallmark of prosperous nations. But how he wants everyone else to execute on that vision is one fallacy after another.
