Posted on 04/12/2011 6:10:39 AM PDT by Titus Quinctius Cincinnatus
Fair warning: This article will piss off a lot of you.
I can say that with confidence because it’s about Peter Thiel. And Thiel – the PayPal co-founder, hedge fund manager and venture capitalist – not only has a special talent for making money, he has a special talent for making people furious.
Some people are contrarian for the sake of getting headlines or outsmarting the markets. For Thiel, it’s simply how he views the world. Of course a side benefit for the natural contrarian is it frequently leads to things like headlines and money.
Consider the 2000 Nasdaq crash. Thiel was one of the few who saw in coming. There’s a famous story about PayPal’s March 2000 venture capital round. The offer was “only” at a $500 million-or-so valuation. Nearly everyone on the board and the management team balked, except Thiel who calmly told the room that this was a bubble at its peak, and the company needed to take every dime it could right now. That’s how close PayPal came to being dot com roadkill a la WebVan or Pets.com.
And after the crash, Thiel insisted there hadn’t really been a crash: He argued the equity bubble had simply shifted onto the housing market. Thiel was so convinced of this thesis that until recently, he refused to buy property, despite his soaring personal net worth. And, again, he was right....
(Excerpt) Read more at techcrunch.com ...
self-educate. The rest is a mental cluster-__ck.
Excellent point, and about damned time somebody made it.
Boy are they squealing here in Pennsylvania over Tom Corbett’s 50% budget cut.
“Higher” education?
WAY too long and WAY too expensive.
When will see some no talent academics hauled before Congress for the unending upward spiral in the cost of education?
The idea of an elite league is it takes a certain level of performance to get in. Is Major League Baseball a failure because only a tiny percentage make it? Should everyone make it to the bigs?
First, the author of this article isn’t Peter Thiel. It’s Sarah Lacy.
Second, we’re looking right now for colleges for our older son.
The sticker price for the Ivies is around $50K per year.
Same at lots of other private universities.
But only folks in Obama’s class of rich folks ($200K+ income) typically pay full price at all of these institutions.
The ironic thing is that because of their large endowments, the Ivies often give much more financial aid than other schools charging similar tuition and fees.
I plugged my 2009 tax info into the Princeton financial aid estimator and found that they would give a very big chunk of their tuition, room and board, and books to my son in financial aid, and I’d have to pay a relatively small percentage of the overall $50+K of the annual expense. After taking into account the financial aid, what I’d have to pay amounted to something modestly more expensive than sending him off to the University of Maryland, College Park (around $8K per year without room and board, but our son could commute) (we’re Maryland residents and qualify for in-state tuition).
When we went to the Princeton presentation a few months ago, we were surprised to learn that families with up to around $200K per year in household income usually get financial aid.
And when I say “financial aid,” I don’t mean “loans.” The Ivies no longer provide student loans as part of their financial aid packages. It’s all grants. So, if they determine your Estimated Family Contribution should be $10K per year, then they’re going to give $40+K in grants.
On the other hand, the estimator for Johns Hopkins shows that I’d have to pay more. Hopkins is a great school, but not with quite the reputation of the Ivies. And then, Catholic University in Washington, DC, would offer less. Good school, but not at the level of, say, Hopkins.
Our data gathering tracks this principle generally: the more prestigious the school, the less you will pay to go there because the more financial aid you will receive.
And unless you’re sending your kid to the state university in your own state, public universities aren’t a lot better. With room and board, these often exceed $40K per year. Financial aid available varies widely, but my own data gathering indicates it’s not as generous as the best private schools.
Thus, the moral of the story is, the better the reputation of the school, the better a deal it will be.
All you need is for your kid to get accepted to an Ivy, LOL.
sitetest
I did not finish college and I have done very, very well in my 30 year High Tech career.
Enough said.
Oh great, another thread where people can brag about themselves and their kids!
“When will see some no talent academics hauled before Congress for the unending upward spiral in the cost of education?”
That won’t happen. Education costs are driven by government policy. For example, I got an MBA which my employer paid for 100%. Did my employer do this out to the goodness of their hearts? Companies have no heart. They did it because the tax codes made it too attractive not to do it. Did my company care what the courses cost? No. I could have gone to Lilly-put U or Harvard. They reimbursed 100%. Since they didn’t care one wit what the cost was the universities can charge whatever they want. I know adjunct professors making $60-80k and the retirement benefits (state) are unbelievable.
That’s just one aspect.
Now, from the school’s perspective, why would they want to lower their cost to students? Students can get loans out the whazoo. Do they care whether the student is saddled with debt? Caveat emptor.
College costs are too high.
Dorms are nicer than many peoples homes, new rec centers are built with water slides, etc...
And there are many overpaid, tenured, dead weight professors on staff also.
Higher education needs a new model.
“Education costs are driven by government policy.”
####
Correct, and therein lies my point:
The ridiculous charade of hauling oil company executives in front of Congressional committees, when the price of oil is driven largely by destructive government taxes and regulation.
More apropos would be to investigate Congress. Whatever the particular large problem of the moment is, in the United States, there is a very good chance it starts with government.
False analogy. Going to Harvard isn't about getting a better education, and it's not about getting there because you're just so durn meritorious that the Harvard admissions people were wowwed by your obvious intelligence and industriousness. It's about getting the Harvard name. Essentially, people are paying $200K for a piece of paper that says "Harvard" on it.
Ever hear of anything called "the Harvard number"? If not, then Google it.
I do the hiring at our company. And I couldn't care less what ‘expert’ or other so called wise man has to say about this - I've be in this business for 40 years and have made money for every company I've worked for. And I know for a fact these are not my ideas alone.
Overall Consideration Number 1 : How much of their education did this person work and pay for themselves?
Overall Consideration Number 2 : how many years has this person spent in a working environment (yes, bagging in a Supermarket counts).
Overall Consideration Number 3 : what courses did this person take (more important than number 4).
Overall Consideration Number 4 : grade point average.
Overall Consideration Number 5 : what college did they go to.
I only hire engineers and designers, and if I had $50 for every time I've heard, “how did you find so and so, they are great” I'd be quite wealthy.
Oh, and to finish my blasphemy, if someone can show me 10-15 years of good practical, accurate, creative work, I could care less whether they have a degree at all!
As for getting the Harvard name, so what? It's a winning brand name. People try to get jobs with big name corporations for the same reason. They want Coca-Cola or IBM or Google on their resumes. What's wrong with that? Has Harvard's cache diminished?
Anyway, I didn't bother with college and I'm doing fine. I'm not a big booster of college. I just think Theil's argument is goofy. And oh yeah, anyone who didn't see the dot com bust or the housing bust coming is a complete moron.
I've read that the Harvard endowment is so big that they could provide free education at the current size in perpetuity and never run out of money. I question "never", but none the less, they must have some serious money.
Fantastic post!! I have been worried about this for years, watching my husband and me struggle with student loan debt and being concerned for my children’s burdens in this area.
Yes, the Harvard argument that Thiel made was ridiculous.
However, the idea of an education bubble makes some sense. Except for engineering and law, I can’t think of many fields that might have a reasonable pay-back. Even medicine isn’t such a good payback anymore (mainly because of Obamacare).
I’ve seen signs of the bubble:
- an MBA was once a valuable pedigree - now they’re a dime a dozen.
- an increasingly popular trend is to complete the first two years in a community college and transfer the credits to a four-year institution. This way the core class requirements can be obtained on the cheap and the student only has to pay through the nose for the specialty classes.
- one of the decisions that are considered when a student selects a college is its status as a “party school”. I didn’t see this when I applied in the 1970s, and in the 1980s it was done as a joke. Now it’s a part of a school’s attributes. Apparently, college is now viewed as a pre-adult passage of time rather than a means in which to train for a career.
- the attitude from new college grads is more along the lines of ‘what can you do for me’ rather than ‘what can I do for my employer’. I’ve seen engineering grads who don’t know how to take a derivative, others who are unwilling to work overtime, and expect break rooms that have video games and ping-pong tables.
We have a leftist-academic-support, closed loop, higher education economy.
The sciences go along for the ride as long as they adhere to the political agenda. The graduates pay forever to support the Whakoes and enter the workforce largely brainwashed.
The fact that there even is a "Harvard number" suggests that getting into Harvard isn't so much about your academic abilities and whether you were in the jazz band as an extracurricular activity, but is instead more about who your parents are, and who you know.
Sorry, but schools like Harvard, the rest of the Ivy League, and a few others are, as Thiel hints at, more about the perpetuation of America's ruling than they are about providing a "quality education." Most schools can give you as good of an education - from a mere technical and information standpoint - as Harvard does. What most schools CAN'T do, however, is open the door to an elite law firm or trading house for you, based merely on the name on the piece of paper.
I'm sorry, I know there are some people who think this is all jim dandy, but seeing how the Harvard/Ivy League set has monumentally halped to screw up the country over the past two decades makes me think that it's time to end the game. We really don't need these people as an aristocracy, and it's time we start reforming our education system - from the ground up AND the mindset behind it - so that true meritocracy gets a chance.
Which means Thiel's argument is rubbish. You invest in Harvard to get access--and you get it. Where's the problem? As for having to grease palms to get in, welcome to the world. What? You mean sometimes getting ahead comes down to who you know? Next thing you'll tell me there's no Easter bunny.
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