Author: Owen Sandercox

Education investors curb student debt

The topic of student debt has garnered quite a bit of attention in recent months, particularly on college campuses and on the campaign trail. With continually rising tuitions and a wobbly economy, the question of how students should pay for college is increasingly pertinent. Should the government foot some (or all) of the bill? Is it right that many students graduate drowning in debt? Is there a better way?

One rather provocative solution has made its way into the debate over the last few months, thanks to former Republican Presidential candidate Marco Rubio. The idea is that, rather than loading up on debt, students could sell a slice of their future earn- ings to investors who in turn would fund their education. In finance jargon, this is transforming student debt into ‘student equity,’ or ‘graduate stock,’ as described in the Economist.

Personally, I am extremely intrigued by the innovation of this sort of arrangement, which was origi- nally proposed by economist Milton Friedman in the 1950s. However, it is certainly not a universal cure and would likely not be a widely-implemented solution for various reasons.

For one, investors would be extremely reluctant to fund the edu- cations of students who didn’t show- clear signs of future financial success. However, if a free-market arrange- ment such as this could get more qualified students the education they deserve but lack the ability to pay for, then it has merit and should be welcomed by all, even if it doesn’t solve the entire problem.

Some have characterized the idea of student equity as “indentured servitude.” Personally, I disagree and think that selling portions of future earn- ings is an innovative solution to the problem as it stands now. In fact, a central benefit of the arrangement is that it gives students greater freedom in choosing a profession, because they would not feel as obliged to shoot for the highest salary possible straight out of college in order to pay off a mountain of debt. Whether they become a banker or a teacher, they would pay the same portion of their income.

Of course, this is precisely why the investors would have incentive to find students who are motivated, diligent, smart and show signs of future mon- etary success. Here lies another reason why the plan is brilliant: it efficiently allocates the funding from investors o students who would otherwise take out a loan, but show signs of making significant contributions to society.

For example, in today’s economy and job market, it is likely that the majority of these funds would flow from investors to students studying and showing great aptitude in highly technical fields, such as science, tech- nology, engineering and math because workers in these fields are some of the most highly valued workers today.

These places are exactly where funds for education should be flow- ing. In a hyper-competitive global economy and an age of phenomenal technological progress, any student who shows the motivation, work ethic and aptitude to get a degree in the STEM fields should be able to, regard- less of whether they can pay. The student equity solution will help us to reach that ideal.

Many would say that any student in the U.S. who shows the motivation, work ethic and aptitude in any academic field should be able to receive an education, regardless of whether they can pay. I agree, but our society is clearly not yet at that point.

Until then, I think any free-market solution that gets deserving students a college education should be welcomed. Converting student debt into equity is, undoubtedly, an innovative solution that could achieve this end.

Owen Sandercox ’19 (sander2@stolaf. edu) is from Sandy Hook, Conn. He majors in economics and statistics.

× Featured

Proposed SGA Constitution changes put to the vote

College prestige privileged over best fit

The fixation on the college “rankings” that come out every year has never made much sense to me. Why do people pay so much attention to arbitrary lists, when the true value of a college education depends on factors specific to each individual student? Why is there such a strong desire, especially amongst the nation’s best and brightest high school students, to attend the most prestigious, most selective or otherwise highest ‘ranked’ school?

Our competative academic culture emphasizes prestige above other factors in selecting a college. I believe that this fixation is not beneficial to the students, their experiences in college, the institutions themselves and overall the state of higher education in 2016. Yet, sadly, the trend appears to be increasing. According to a survey from UCLA, 70 percent of 2015 freshmen believed that reputation was “very important” when it came to choosing a college to attend. This is the highest level the survey has ever recorded since it started in 1967. The fact that so many students find reputation as one of the most important factors in choosing a school is largely believed to be a byproduct of the rise of these college rankings.

I find this notion – that it’s extremely important to attend a school with high reputation and prestige – as not necessarily true, and possibly detrimental to higher education as a whole as well as many students’ individual experiences in college. This is because such a fixation on prestige encourages students to bypass a school that might be a better fit for a school that is higher ranked.

The writer and well-known intellectual Malcolm Gladwell makes a very compelling case along these lines in his most recent book David and Goliath: Underdogs, Misfits, and the Art of Battling Giants. Gladwell tells us the tale of Caroline Sacks, a student from the Washington D.C. area who sailed through her high school curriculum, never receiving a grade less than an A and finishing near the top of her class. She applied and was accepted to her dream school, Brown University, where she chose to attend, rather than the University of Maryland, which was her backup school.

Caroline was passionate in the sciences, and had ambitions of pursuing a career in science. However, she ran into academic difficulties starting her freshman year in chemistry and organic chemistry classes. Despite being an intelligent, hard-working student who thrived in high school, she found the material tough to understand, and began to lose confidence because she was no longer one of the smartest students in the class. To use Gladwell’s terms, she was no longer a “big fish in a small pond,” but rather a small fish in a very big pond, as Brown is one of the most selective schools in the country.

Gladwell argues that had Caroline attended her back up school, the University of Maryland, she would not have lost confidence in her abilities to the extent that she did at Brown. He posits that the reason she struggled so much was because of a phenomenon sociologists call “relative deprivation,” which is the idea that we develop our impressions of how we are doing in comparison to our peers rather than the population as a whole. At Brown, Caroline’s peers were some of the brightest minds in the nation, and even though she struggled, she was surely still in an extremely high percentile of ability in science for the general population. Yet the effects of relative deprivation, due to Caroline attending Brown, were feelings that she was not good enough to pursue a technical subject such as science.

Gladwell’s main point is that while some individuals may thrive in an environment such as Brown, others who still have a high level of aptitude and work ethic may not because of relative deprivation. In other words, some students might do better as a bigger fish in a smaller pond.

So what’s the takeaway from this story? College rankings do matter to the extent that a student wants to know which schools have the “biggest ponds’ – which schools are most selective and prestigious. But I happen to agree with Malcolm Gladwell – our society fixates on the big pond far too much, and many of us are better off in the smaller pond.

Owen Sandercox ’19 (sander2@stolaf.edu) is from Sandy Hook, Conn. He majors in economics and statistics.

× Featured

Proposed SGA Constitution changes put to the vote

Conference celebrates disagreement

Last week, St. Olaf’s Institute for Freedom and Commu- nity hosted a conference entitled “Disagreement – A Sympo- sium for Constructive Political Discourse and Inquiry.”

The conference opened Thursday evening with Mark Kin- gwell, a professor of philosophy at the University of Toronto and his talk “Jerks, Asshats, and the Unstable Politics of Civil- ity,” in which he made a passionate philosophical argument for a higher level of civility in today’s political discourse.

The focal point of the symposium was Friday afternoon’s speech from Jonathan Haidt, a New York University profes- sor who studies social and moral psychology, and author of the New York Times bestseller The Righteous Mind: Why Good People Are Divided By Politics and Religion. Haidt sought to explain the rise of an increasingly divided America through the lens of moral psychology. He shared various data show- ing that Congress is more polarized than it has ever been, ide- ological purity is on the rise and there is less cooperation and more strife between the Democratic and Republican parties in the government than ever before. This is a big problem, according to Haidt, because a functioning and cooperative government is a crucial prerequisite to tackling more signifi- cant threats posed by the likes of ISIS or global warming.

“Hyper-partisanship is our most serious problem,” Haidt said.

Haidt’s lecture progressed from the psychological and moral roots of liberal and conservative ideologies to dis- agreement as it relates to free speech. Haidt addressed some of the recent controversies surrounding race and diversity on college campuses such as Missouri, Yale, Emory, Brown and others. Haidt’s view, which raised some controversy among students, is that a divide has risen between the “liberal left and the illiberal left.” In other words, Haidt thinks that the protests at schools that are already progressive institutions demonstrate that there is an increasingly large fraction of young, liberal college students who simply refuse to hear viewpoints other than their own. This is a problem, Haidt says, because a crucial and integral component of diversity is difference in political thought and opinion.

One of his most controversial points was the notion that words are not violence, and someone should not be punished

just because he or she says something on a political or social issue that offends someone else.

“Once you say that words that offend someone are violent, then again, a hundred years from now, the problem is going to be worse – we’ll never ever solve it,” Haidt said.

John Smith ’19, who attended all of the lectures with many other St. Olaf students found them relevant to life on campus. “The symposium couldn’t have come at a better time. In the wake of the email fiasco last week, students have free speech and discourse on their minds. To bring in speakers with vastly different takes on the same issue, disagreement, was very smart,” Smith said.

Following Haidt was Sarah Sobieraj, a professor of soci- ology at Tufts University, whose lecture also addressed the theme of political division but with a focus on the role that outrage, particularly in the media, has played in increasing political division. In this regard, Sobieraj explained that the role that media has played in our society has changed drasti- cally over the last 20 to 30 years. Market forces have shaped a landscape of media outlets that often report news with what- ever spin will get the most viewers, and therefore increase profits. This might be one reason why there is seemingly 24/7 coverage of Donald Trump.

St. Olaf Assistant Professor of Philosophy Jason Marsh was impressed with the quality of the speakers.

“I couldn’t be more sympathetic with the idea that we need to learn to disagree in better and more humane ways,” he said. “Despite certain disagreements that I had with some of the speakers’ points, that core point seems to me exactly right.”

sander2@stolaf.edu

× Featured

Proposed SGA Constitution changes put to the vote

Bernie’s financial plan overpromises

It goes without saying that politicians running for the nation’s highest office have an incentive to exaggerate the merits of the policies they plan to bring to the White House.

However, how often does a group of economists of a certain party gang up on one of their own because they believe that a candidate’s claims are unrealistic? This is exactly what recently happened in the Democratic Party.

Last week, four Democratic economists who served as the chairs of the Council of Economic Advisers under Presidents Obama and Clinton wrote an open letter to the Bernie Sanders campaign. They criticized the Senator’s promises regarding the potential economic impact of his plans, which include an expansion of public sector spending, a more progressive tax system and tuition-free public college.

In their letter, the four liberal economists specifically addressed an economics professor Gerald Friedman, who is often cited and praised by the Sanders campaign. Friedman works at the University of Massachusetts and he projects that Sanders’s economic plan would yield a 5.3 percent GDP growth per year over the next decade, more than double our current growth rate. Regarding these claims, the economists stated that:

“As much as we wish it were so, no credible economic research supports economic impacts of these magnitudes. Making such promises runs against our party’s best traditions of evidence-based policy making and undermines our reputation as the party of responsible arithmetic. These claims undermine the credibility of the progressive economic agenda and make it that much more difficult to challenge the unrealistic claims made by Republican candidates.”

Paul Krugman, a Nobel Prize winning economist and prominent liberal commentator, also gave his opinion. Krugman rarely hesitates to criticize the outlandish economic growth projections of politicians, and like the other economists, he posited that such far-fetched forecasts are a problem not only for Sanders, but for the Democratic party as a whole.

Krugman is no enemy of the left – in fact, the reason he finds Sanders’s claims concerning is because they undermine the left’s ability to argue that the Republican’s economic agendas are far-fetched. In a New York Times op-ed last week, he writes that “fuzzy math from the left would make it impossible to effectively criticize conservative voodoo.”

As someone who proudly does not identify with either the Democratic or Republican parties, I look for pragmatism in candidates: their desire and ability to compromise, break through ideological deadlock and to be rational, reasonable and level-headed, especially when it comes to economics.

Unfortunately, these traits have been difficult to find in this year’s crop of contenders, and it is frustrating to see claims such as these coming from the Sanders’s campaign. The fact that they are promising five percent growth is extremely far-fetched, especially in today’s macroeconomic environment which many economists view as a global slowdown in growth. Regardless, droves of people believe Sanders’s claims.

What’s even more frustrating is that many of Sanders’s ideas are very good; he is the only candidate that seems to touch on the corruptive and corrosive power money has in politics today. The truth is that these unrealistic claims demonstrate that Sanders is fishing for voters through over-promising, which, to my mind, is not a sign of pragmatism.

I worry that when politicians on one side exaggerate the merits of their economic plans it encourages other candidates to do the same.

Moreover, there are good reasons to defend a more progressive tax system: more public spending on infrastructure, more stringent regulation of the financial sector and breaking up too-big-to-fail banks. However, to say that our growth could magically double as a result of these plans reflects a failure to understand the state of the U.S. economy. These ideas are good, but they don’t have to be “sold with fairy dust,” to borrow Krugman’s phrase.

Just look at history. Since 1960, 10-year real growth of GDP per capita has hovered around two percent per year, with a high in 1969 of 3.5 percent and a 2014 low of 0.5 percent. Yet the Sanders campaign’s projection is that his economic agenda will result in a per-capita growth rate of 4.5 percent.

However, as Krugman says “There’s just no way to justify this stuff and for wonks like me, it is, frankly, horrifying.”

Owen Sandercox ’19 (sander2@stolaf.edu) is from Newtown, Conn. He majors in conomics and statistics.

× Featured

Proposed SGA Constitution changes put to the vote

Drones offer best choice for U.S. protection

An important, and often overlooked, topic in recent presidential debates is whether or not the U.S. should continue or expand our use of drone warfare in the fight against terrorism, or whether the tactic ultimately is more harmful than beneficial, and should be disbanded.

Arguments for the continuation of drone warfare include the stealthy ability of drones to attack precise targets, decimate terrorist networks and thwart the plans of attacks before they ever materialize. Under these presumptions, drone warfare is a precise, efficient strategy with which to fight terrorists, and has saved American lives without putting boots on the ground.

The collateral damage of drone warfare often calls into question their ethical implications. While drones are precise, and their U.S. operators are careful, innocent civilians have been killed during strikes. Many argue that brutal attacks with such potential for civilian casualties serve as motivation for more individuals in the Middle East to join terrorist groups. In other words, drone warfare elicits radical responses.

Drone warfare is neither neat nor foolproof, but is any method of war? I believe that drone warfare is the best option we have. Don’t just take my word for it, take it from a former director of the Central Intelligence Agency, Michael Hayden, who wrote an op-ed in the New York Times last week outlining why drone warfare should be embraced to create a safer America:

“The [drone warfare] program is not perfect,” Hayden writes. “No military program is. But here is the bottom line: It works. I think it fair to say that the targeted killing program has been the most precise and effective application of firepower in the history of armed conflict. It disrupted terrorist plots and reduced the original Qaeda organization along the Afghanistan-Pakistan border to a shell of its former self.”

Hayden makes sense. And for those who still feel a bit queasy about the thought of killing innocent civilians from time to time, I would remind us all to consider the intentions of the two sides here and the asymmetry of potential outcomes. The U.S. aims to kill terrorist leaders who are potentially plotting attacks on our soil.

Should just one terrorist attack materialize in our country, the lives of hundreds if not thousands of Americans would be threatened. In my view, the potential consequence of inaction dwarfs the notion that we should not try to kill terrorists with drones because we may kill civilians in the vicinity of said terrorists.

Don’t get me wrong – killing innocent women, children and civilians makes me queasy. But the thought of another attack like 9/11 makes me much sicker.

Terrorists have made plans time and time again to attack us on our soil, and have surely failed many times, many times likely thwarted by our military and intelligence bureaus. However, we have to remember that it only takes one successful attack for a massive loss of American life. We have a moral obligation to do all we can to stop terrorists before they fulfill their goals, which often entail American death.

Needless to say, I agree with Hayden – the targeted killing drone warfare program should be embraced. The state of the world today requires it.

However, Hayden’s most compelling point came in a discussion of the dangers of inaction. He said, in reference to his meetings with President Bush over controversial topics like drone warfare, “If we had boiled our briefings down, the essence would have been: ‘Knowing what we know, there will be no explaining our inaction after the next attack.’”

So should we embrace drone warfare? Yes. When objectively viewing the harsh reality and threats that terrorism poses to not only the U.S. but the world today, I frankly don’t think we have a choice.

Owen Sandercox ’19 (sander2@stolaf.edu) is from Sandy Hook, Conn. He majors in economics and statistics.

× Featured

Proposed SGA Constitution changes put to the vote