Bill Gross Says College is Worthless
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PIMCO’s Bill Gross struck a nerve with market participants and politicians Tuesday after declaring college is a waste of time and money.
Gross says "college was great as long as the jobs were there," but now the jobs are gone. An undergraduate degree is nothing more than a "four year vacation" keeping 25 million students off the unemployment roll, he argues.
Some "Facts" to support his case are:
Fareed Zakaria offers a well-thought-out solution, Gross points out. Zakaria's solution is a program which focuses on technical education and apprenticeship programs instead of liberal arts.
Politicians on both side of the aisle are clueless on how to put America back to work, and few advisors from either party have even mentioned the structural long-term disconnects in employment, Gross notes. This disconnect is the "recognition that cyclical influences will no longer dominate the U.S. labor market. Manufacturing and goods exports have ceded enormous ground to China and other developing labor markets, as America’s reliance on services and high tech innovation has exposed gaping holes in an historically successful model."
Gross says industries like housing construction, real estate brokerage, banking and consumer retail employment, driven by excessive leverage and abuses, will never rebound to pre-crisis levels.
He claims job creation cannot rest on lower corporate taxes or a return to deregulation and government must help. An infrastructure bank to fund reconstruction projects is a commonly accepted idea, Gross said. Also clean/energy investments will help, although China is already a step ahead.
"Government must temporarily assume a bigger, not a smaller, role in this economy, if only because other countries are dominating job creation with kick-start policies that eventually dominate global markets," Gross says.
"The 'golden' days are over, and it’s time our school and jobs 'daze' comes to an end to be replaced by programs that do more than mimic failed establishment policies favoring Wall as opposed to Main Street." Gross concludes.
Gross says "college was great as long as the jobs were there," but now the jobs are gone. An undergraduate degree is nothing more than a "four year vacation" keeping 25 million students off the unemployment roll, he argues.
Some "Facts" to support his case are:
- College tuition has increased at a rate 6% higher than the general rate of inflation for the past 25 years, making it four times as expensive relative to other goods and services as it was in 1985. Subjective explanation: University administrators have a talent for increasing top line revenue via tuition, but lack the spine necessary to upgrade academic productivity. Professorial tenure and outdated curricula focusing on liberal arts instead of a more practical global agenda focusing on math and science are primary culprits.
- The average college graduate now leaves school with $24,000 of debt and total student loans now exceed this nation’s credit card debt at $1.0 trillion and counting (7% of US national debt). Subjective explanation: Universities are run for the benefit of the adult establishment, both politically and financially, not students. To radically change the system and to question the sanctity of a college education would be to jeopardize trillions of misdirected investment dollars and financial obligations.
Fareed Zakaria offers a well-thought-out solution, Gross points out. Zakaria's solution is a program which focuses on technical education and apprenticeship programs instead of liberal arts.
Politicians on both side of the aisle are clueless on how to put America back to work, and few advisors from either party have even mentioned the structural long-term disconnects in employment, Gross notes. This disconnect is the "recognition that cyclical influences will no longer dominate the U.S. labor market. Manufacturing and goods exports have ceded enormous ground to China and other developing labor markets, as America’s reliance on services and high tech innovation has exposed gaping holes in an historically successful model."
Gross says industries like housing construction, real estate brokerage, banking and consumer retail employment, driven by excessive leverage and abuses, will never rebound to pre-crisis levels.
He claims job creation cannot rest on lower corporate taxes or a return to deregulation and government must help. An infrastructure bank to fund reconstruction projects is a commonly accepted idea, Gross said. Also clean/energy investments will help, although China is already a step ahead.
"Government must temporarily assume a bigger, not a smaller, role in this economy, if only because other countries are dominating job creation with kick-start policies that eventually dominate global markets," Gross says.
"The 'golden' days are over, and it’s time our school and jobs 'daze' comes to an end to be replaced by programs that do more than mimic failed establishment policies favoring Wall as opposed to Main Street." Gross concludes.
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William H. Gross, Pacific Investment Management Company, LLC (PIMCO)Sign up for StreetInsider Free!
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