From Pecora to Camorra

Almost 30 years ago, Michael Lewis, the dean of business journalism, wrote, “The zeitgeist… is ripe for another Ferdinand Pecora.” As you’ll recall, the “Pecora Commission” was the press name of the Congressional inquiry into the 1929 Wall Street crash. The Pecora Commission is generally credited with creating the popular support that encouraged Congress to pass Glass-Steagall, the ’33 Act and the ’34 Act. Whether you love or hate the New Deal era, most Americans can’t imagine life without investor protections. We invest money as a matter of course; you may not do so on your own account, but that’s what 401ks and IRAs are for, and that’s how pension plans fund themselves. Most middle-class Americans rely on functioning capital markets, not the state, to fund their retirements.

As you’ll also recall, southern Italy is largely run by organized crime clans, most famously (within Italy) the Camorra. This culture of organized crime grew out of “amoral familism,” the phrase coined by Edward Banfield in the sociological classic The Moral Basis of a Backward Society. Under amoral familism, patronage networks centered on the extended family provide jobs and money to their members. You don’t really get hired into a job in a Camorra-controlled industry. Instead, Vinnie talks to Vito and they agree that as Tony’s nephew, dey gotta do sumtin’ for ya. Then you get a job as a garbageman for which you show up one week a month, making half of what a full-time garbageman would make in Milan. You implicitly make double the Milanese guy’s hourly wage; you kick up to Vinnie and Vito; it’s true the garbage tends to pile up, but the insiders are pretty happy with the arrangement.

Thus, we see two poles of social trust. In one, people tend to extend trust to institutions and unfamiliar people as a matter of course. In the other, capital (whether social or otherwise) is appropriated by insider networks in a context of widespread distrust. Vinnie and Vito help you out because you are a sufficient insider to enter into patronage networks. When you put money in your Vanguard funds, however, you’re not trusting Vanguard because you’re a member of the Bogle clan — you’re trusting the overall honesty of the system.

If trust in the system breaks down, in short, we go from Pecora to Camorra. Which way are we going today?

I believe Michael Lewis was wrong. It says so right on the name of my blog. I don’t think he made his prediction out of sincere belief, but out of sincere desire and wishful thinking. I don’t think we’re going to get a modern-day Pecora because we are no longer the kind of society that produces informed anger over the abuses he aimed to correct. I don’t mean that we’re morally decayed — maybe, maybe not. No, we’ve lost the kinds of elites who could act effectively against abuses. Our contemporary elites are too centralized to be politically accountable to diverse constituencies with conflicting interests, and far from decrying abuses, they see them as necessary and good.

After the financial crisis, we wound up with a bunch of state action, it’s true. But as an insider, I frankly question its effectiveness. Contemporary business crimes have no names. In 1929, it was not illegal to do many things that we would consider morally repugnant, like stock watering, pumping and dumping, or some forms of insider trading. Back then, Wall Street pushed back on regulators ineffectively. Today Wall Street owns the regulators; worse, the regulators simply don’t have the acumen to understand preposterous scams, never mind subtle, legal abuses. One of the big takeaways from the Madoff case is that Madoff was simply too prestigious for the complaints about him to register with regulators (one guy sent 5 reports over 8 years pointing out why Madoff’s returns were impossible, but the SEC decided he was a stupid crank and tossed his letters).

The specific prohibitions on the abuses identified by the Pecora commission were enactable because Wall Street was not totally insulated against demands for accountability from politicians. National politics was polycentric and politicians were beholden to regional bases. Glass-Steagal was sponsored by two Southern politicians; the 73rd Congress that passed these laws during the Hundred Days had its deep blue strongholds in the South, the lower Midwest and the Western states. The civic-minded, polycentric elite of the day had plenty of people in places like Cincinnati and Richmond who were capable of making coherent, effective demands for reform because they understood the issues. By contrast, contemporary Wall Street enjoys, and doles out, bipartisan support while being run by a national elite from everywhere and nowhere, and regional politicians are descending into gestural politics and fecklessness.

The problem is the the contemporary system isn’t exactly evil. I wouldn’t have been clubbable enough to make in into the 1929 elite because I have a hick accent, crappy teeth, no family money, and wouldn’t have passed for a Hahvahd Man. We really do live in a more open, meritocratic society. So why does it feel so crappy all the time?

I believe it’s because our elites are too consolidated and have too few internal disagreements to be capable of meaningful conflict. Essentially, we’ve gone from a political society to a managerial one, and in a managerial society, people have best practices, not opinions. And in a strange way, this has brought us full circle, to something we might call “amoral classism”. The elite class in this country believes as thoroughly as any 1929 patrician in its mandate to rule; however, the process of elite socialization no longer allows for the kind of internal conflict that kept the elites of the New Deal era relatively honest. We are thus left with a society consisting of elites and proles with relatively little in the way of a politically active, financially informed middle class. And this class solidarity is why, in 2009, no bankers went to jail. How could they? Who would send them?  Does Vito snitch on Vinnie?

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Clownward Mobility

Some people were born on third base, but what about those who squandered opportunities that aren’t coming back?

Today, we’re going to be looking into failures in the Boomer generation. Let’s set aside sad cases of mental illness and drug addiction — other than to note, of course, that Millennials in similar situations will be far worse off. Let’s look at what it likes when Boomers fail. (As usual, I’ll use “Boomers” to refer to people born 1935-1965: people whose lives began before deindustrialization became acute, our physical infrastructure began to degrade, and our position as the world’s net creditor disappeared).


Our first case is that of a journalist born to an executive of a major corporation. He almost wound up homeless. Unlike most of the others in subsidized housing, William McPherson had a Pulitzer in his hobo bindle. Mr. McPherson retired at 53, on a non-indexed pension with no price protections on his medical insurance, and lived to 84. He seems to have made good calls on AOL and Apple, and bad ones after that; but, in his own words:

I’d fallen under the spell of magical thinking. In my opinion, I didn’t squander the money, either; I just spent it a little too enthusiastically — not on Caribbean cruises but on exploring the aftermath of the fall of Communism in eastern Europe.

The pride here is palpable. He’s not like those other, lesser Boomers who boomed their money away on Harleys and trashy pleasures. He was out there living the life of the mind. Everyone wants to be a philosopher, not because it pays well but because they want to gain social status, even if only in their own minds.

Without being too hard on a sad, old man who died poor and alone, there’s a kind of narcissism that lives among people who always thought they’d have enough money. They don’t crave the approval of a circle of real subordinates as a clinical narcissist would. Instead, they need to see themselves as people who learn things, know things and are above the petty concerns of proles. Making a living is, to be clear, a petty concern of proles.

This attitude isn’t entirely discreditable. You could even say that it’s got a deep heritage in the values of Western society. However, universal freedom was never universal. This heritage was founded on widespread slavery and on the total domination of rural hicks by urban elites. I’m not here to litigate the justice of this system, only to point out the economic base upon which it rested. And you’d be wise to ask where in the economic system you are situated.

This was McPherson’s mistake. He thought that he was an aristocrat of the soul. Maybe this doesn’t require being an aristocrat of wealth, but you need enough to get by, and he didn’t have it.


History repeats itself, first as tragedy, then as farce. McPherson’s story is repeating itself in hundreds of thousands of cases, such as the case of Kathleen Wolf. Ms. Wolf didn’t wind up homeless. She merely had to downgrade to a small town in Iowa. Essentially, she thought she had money because she had cash flow to join a country club and wear Tiffany glasses, until she didn’t.

Now a philosopher-scholar and a California real estate agent are worlds apart. But we’re not talking about situations that are fundamentally economic different — indeed, they are universal across the Boomer generation.

People in the US ages 65 to 74 hold more than five times the borrowing obligations Americans their age held two decades ago, according to an analysis of federal data by the Employee Benefit Research Institute, a nonpartisan, nonprofit policy researcher.
Paying it off won’t be easy. Median savings for US households nearest retirement age has dropped 32 per cent in the past decade to $14,500, according to an analysis of federal data by the Economic Policy Institute, a left-leaning think tank.

Nearing retirement age? Savings of $14k? You’re going to be eating CARDBOARD. C. S. Hecht at Vox agrees:

When I was younger, I never thought I’d spend my golden retirement years living out of my car. For most of my life I had a roof over my head, food on my table, and steady work as a journalist and writer. I grew up living a middle-class life. I was able to live and travel to many places close and far from my native state of New York. Most of my adult life has been in California and Nevada, but I also traveled around the world to Europe and India after graduating college.

Then in my mid-40s, my life slowly started to unravel. I divorced my husband, and three remaining family members who were very dear to me all passed away, shrinking my safety net. I got rear-ended by a car and developed fibromyalgia. For years, every morning when I woke up, it felt like I had been run over by a Mack truck. Later, in my 50s, I went through extensive therapy to heal my fibromyalgia symptoms — but then developed osteoarthritis in my knees.

Then the recession arrived. I had been working primarily as a freelance writer, editor, and PR manager, but well-paying gigs rapidly slowed down. I was running out of money fast and needed steady work. Day after day was spent sending out hundreds of résumés and applications, but I rarely heard back and only landed one or two interviews. Unemployment shot up 5 percentage points in 2009, peaking at 10 percent the next year.

Eventually, I couldn’t scrape together enough money from savings and the occasional gig. I needed money badly, and when I turned 62 I applied for early retirement to activate my Social Security checks. At $672 a month, it wasn’t enough then, and it’s still not enough now.

None of these are “bad people” — they are simply people whose lives were utterly ruined by acting like they had more degrees of freedom than they really had; people who had no idea that they were living far better than they had any real right to expect. They didn’t save and they didn’t plan, and now they’re done here.

Getting back to my economic base statement. I know I’m a worker, and I do my philosophizing part time. It’s probably best if you do the same.

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Why are millennials so “obsessed” with “filtering their water” for “engineered nano-parasites”?

A day or so after I last hit “poast”, along comes Slate asking the hard questions. Why, indeed, are millennials so obsessed with securing a baseline standard of living? An admission against the article’s thesis is quickly lampshaded:

It’s true this generation has been shaped by a somber set of circumstances—more college debt, greater instability, lower pay on average.

But then, of course, Slate moves on to turn conventional wisdom on its head by pointing out that there’s really only one demographic that’s obsessed with work:

Yet certain segments of the population—rich college-educated men, in particular—have somehow bucked this long-term trend. This group has been working somewhat longer hours, and enjoying somewhat less free time, than people further down the socioeconomic ladder.

“Rich” is thrown out lazily. We’re supposed to believe that Thurston Howell IV has replaced monocle-polishing with round-the-clock dealmaking in order to compete with other formerly idle rich. Conveniently, Slate studiously avoids defining “rich”. To be fairer than they deserve, they are lazily copying The Atlantic’s similarly obscure use. I clicked The Atlantic‘s links so that you don’t have to, and I couldn’t find a useful definition everywhere, so it’s probably choosing some idiotically low income level, defining that as “rich”, and then interpreting the behavior of stressed-out providers churning code or deals at all hours as greed.

In any case, the facts don’t really support this thesis. Everyone works harder now and there’s hardly a difference between how hard the middle and top quintiles work. At my jorb, the office plankton doods seem to work pretty damn hard. I work harder, but that’s me.

Having thus eviscerated Slate with facts and logic, I thought I’d take a victory lap through the rest of the piece:

Thompson also mentions a Gallup report from 2016, which claimed that, “like all employees, millennials care about their income. But for this generation, a job is about more than a paycheck, it’s about a purpose.” Yeah, well, the same report also notes that 48 percent of millennials say overall compensation is an “extremely important” factor in the job hunt, and that 1 in 2 millennials would consider switching jobs if it meant getting a modest raise. Paychecks still have pull.

Here, the communists at Slate may be onto something. As I said in my previous poast, I change jobs a lot, and this is driven by money and the need to forcememe my way into having skills that I’d never be permitted to organically develop in a continuous career. For instance, if I were to stay at my current job, it wouldn’t matter that my team has created a product that produces about $10m in annual steady-state GP — I’d make VP when someone older retired or died, even if they’d been functionally dead for years. Meanwhile, I’d be exposed to skill atrophy or irrelevance risk, like a guy who built a nifty FORTRAN system in 1981 and wound up maintaining it into the eras of object-oriented IDEs, early web programming, and contemporary languages. At that point, you just hope your product doesn’t die before you do, and if it does, I guess Rob Rogers has some career advice for you.

Slate concludes that it’s all in our heads:

Journalists tend to be well-educated but not so highly paid, and strive in a field that’s both competitive and in decline—and that, too, has been the case for at least a couple decades. Which is to say, we’re more susceptible than most to “toil glamour” and the gospel of career fulfillment. If anyone’s obsessed with work, it’s us.

Thing is, that’s not just journalists. Career uncertainty, real estate inflation and guild card inflation have impoverished a generation, and the one before is doing exactly what Rob Rogers tried to do: holding onto their jobs because they’re too much trouble to fire. Put it all together, and if you want to thrive — you have to strive.

Life After Uselessness

Apologies to my readers — both of you — for my long silence. I’ve been busy with a typical millennial career cycle: I built a successful business with a defined life-cycle within a corporation, in the course of which I accrued skills and responsibilities that burnished my resume and prepared me for my next move. I’m now planning that move while still at my present job. Baby boomers, of course, don’t get this at all. Everything about this is scandalizing. I asked for and got “above-market” pay; I based my decisions on best practices and research, not worthless “experience” and groupthink; I based my work cycle on the project and product, not on facetime and shutting down at 5 pm (well, 4 pm — it takes a while to get going, then there’s a coffee break, and did you hear about Barb in Accounts Payable?)

Part of me would love to just chill and coast for 30 years of mediocrity. It’s not like, at 3 am, smoking Juul to stay awake and working on some deal that should have closed six months ago, I whisper to myself that I love the capital markets. But that choice isn’t on the table. I’ve just kind of accepted that changing jobs at least every 4 years, more like 2.5 at this point, is how things are going to be. That said, I also made a lot more money than I would have expected a decade ago, which is damned lucky because I’ve needed a lot more than I would have expected as well.

No matter how annoying they are, you have to feel a certain distant pity for the boomer generation. The ones who were predatory and constantly ready to rock got to make piles of money without much of what we today would consider hard skills or work ethic. Some such people died as they lived, while others in the expanded boomer generation of 1935-1965 got to enjoy their thoroughly undeserved fortunes to ripe old ages. That leaves the rest of them almost as big suckers as us millennials. They’re now starting to realize that they’re broke, poor and old, and there isn’t much between them and a grimly healthy old age of SROs and cat food for dinner. There’s no such thing as “deserve”, but hard as my heart may be from years of contemplating the cold equations of the business world, I can’t help but feel bad for them.

That said, if you too are finding yourself suffering a moment of weakness, this fellow’s miserable plight should lighten your spirits and get you feeling good and hateful again.

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Reminder about boomer tuition for those college days:

Boomer Tuition.jpg

As usual, here at theratfacedman, we’re intellectually rigorous enough to use an online inflation calculator that we googled in 5 seconds. That’s $719.72 in 2018 dollars. Estimated cost of attendance at the University of Houston is now $21,238-42,043 per year. True, we have iPhones now, and avocado toast, so I guess it’s not an apples-to-apples comparison, but one can’t help but feel an important fact about this guy’s life in comparison to ours has been glossed over.

Setting that aside, which is  impossible for student debt following the BACPA of 2005, we take a brief canter through jobs that are, of course, beneath a college man like our boomer author:

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As we know, only millennials — young people with debt, no savings, no pensions, and the need to establish careers — should work as baristas. Likewise, it’s a scandal that a college graduate born in 1959 should earn minimum wage. Jobs that pay 138% of minimum wage are for the little people in Xenophobia, USA (some of whom, admittedly, might be boomers of the kind who vote wrong) — not caricaturists!

Fortunately, our stalwart Solon has found the real villain:

boomercartoon3.PNG

I guess that trip to Xenophobia, USA has influenced Rob Rogers more than he realizes. Call me a xenophobe, but it’s never occurred to me to blame Vladimir Putin for my job history.

The awful truth about waking up in 2019 and finding that no one wants to purchase your makeshift electronics, or clumsy caricatures, or Estrada glasses, or whatever else you might be selling, is that society’s ability to pay for useless things is constrained. Lots of people way more creative and innovative than Rob Rogers failed at business. Meanwhile, he enjoyed 34 years of continuous employment at a major institution, which is about 11 times longer than I’ve spent at any job I’ve ever had. But, as he’s finding out the hard way today, no one actually had to continue employing him. It was nothing more than inertia. He had a job because he did it adequately and it wasn’t worth the bother of firing him. Unique value creation? Better cartoonists than he, by far, live as freelancers, excluded by birth and circumstance from the security that he took for granted for all those 34 years.

If you really are doing valuable work, you’ll carve a niche for yourself. That doesn’t mean you won’t be abused or suffer injustice or watch fools prosper. But you’ll have covered your downside risk in the institution you depend on. The worst advice you could give anyone is to allow exposure to overconcentration risk in your career.

Which brings me, in my solipsistic way, back to where I started this post. If you’re reading this — either of you — you’re not likely ever to be able to depend on an institution. Those days are gone. Promotion? What’s that? Career stability? Who he? Don’t make a cartoonist’s mistake; you can’t rely upon lazy social commentary to pay your bills forever. You have to rely on your bank account, your ability to fill it, your reputation among individual people who think you’re worth hiring and are in a position to do something about it. It’s cold out there in the juggalo-haunted hellscape and you’re only as good as your next gig.

Dismal Science (s3c0nd g1st p1st)

I had just been contemplating this on the tree of woe when a message hit my inbox from a survivor of the STEM hunger games. I am presenting it almost entirely unedited. Thank you, Derek Action, for your careful examination of the vital question: “Now that I do math good, how do I get money?”

You’ll note that Derek delves more deeply into logistical questions than an advice book is likely to do. This is valuable attention to a frequently neglected point. You’ll also note that Derek has obvious familiarity with all stages of the process, and I’m sure that he’d be up for answering specific questions about them. Congrats, Derek, for getting out with a win.

—-

If you studied a quantitative subject but didn’t go into finance because you didn’t want to “sell out”, but you’ve since discovered the Rat Faced Man, then this is for you. It is a guide I prepared with all the information I used myself to get from academia to a real job, and from a real job to a finance job with a top 2% starting salary. It mostly deals with the business of interviewing while you have a job.

I will include references to help with the technical interview preparation, which in finance is the equivalent of asking you to do a Rubik’s cube: you can easily impress the interviewer if you learned the solution beforehand, but otherwise, you will look like an idiot. The questions aren’t designed to test how smart you are, but rather to make you, and above all, the interviewer, feel smart. How else will you justify the big salary you will receive once you’re hired?

While interview skill certainly matters, interviewing for finance jobs is like a lottery, Consider that all the candidates who make it to the phone round will have strong CVs. The candidates who make it to the face-to-face interviews will be the strongest of the applicants. In the final rounds, it often comes down to luck: they will ask a set of brainteasers, and you may or may not know how to solve them. Candidates who luck out and encounter more questions they have prepared for (or previously encountered) will come out looking stronger than they actually are. Likewise, the smartest candidate in the pool could nonetheless have a bad day and flunk an interview. Interviewing (on both sides of the table) is a difficult skill to master, but as with most things, practice makes perfect.

This might mean you may not be able to get a finance job immediately after completing your degree, and you may not have the luxury to spend months interviewing. If this is the case, it makes sense to take a non-finance job with the aim to get back into finance after a year or so. It may even be easier to get into finance then: it’s easiest to find a job when you have a job. Try to spend at least a year at an employer, as spending less time at any one employer may look bad (this rule has exceptions, because multiple good positions in a short time might also indicate that a candidate is in high demand). Whether your first job is in finance or not, the ability to interview while working — a stealth job-search — is a valuable skill to develop. I will provide some guidelines here, mostly to do with the logistics of interviewing.

The most important thing is interview preparation. Think of it as being exam-ready. One is seldom as ready to take a calculus exam than the day before the exam. This is the position you have to be in when interviewing. If you are not exam-ready, you will definitely lose out to the multitude of other rat-faced candidates who are. Finding time to prepare is the hardest part of a stealth job-search. Think about it as having a second job. Put time aside in the morning or evening. If you have a lengthy commute, find a way to do preparation on the journey. The texts referenced in this guide are a great place to start. Don’t just read, you have to do the exercises. Find a sketch book to use or work on your laptop or tablet, but make sure you make preparation part of your daily routine for as long as you are interviewing. As with the calculus exam, you will not perform if you are not exam-ready, no matter how well you know the material. Unlike with the calculus exam, how well you do here will directly influence future income.

When you are exam ready, and if you have a strong CV, you will start getting invites to phone interviews. Very few finance houses will invite you for a face-to-face interview without doing a phone screen, therefore you need to be prepared for this preliminary stage. This can be difficult to do if you are in full-time employment. You need to find a place where you can take a call, where you will be undisturbed for 40-60 minutes, and where you will be able to do mathematical brainteasers with pen and paper. The best place to do phone interviews is in an office with a table with the door closed, while using a landline. This is also the hardest place to find when you are in full-time employment, unless your employer won’t get suspicious when you book meeting rooms around lunch everyday for long, private phone calls. Sitting in a coffee shop is another option, but it might be hard to find a quiet one where the risk of being disturbed is zero. You will have to scout for locations that are walking distance from your place of work, but not too close to risk discovery by your colleagues. Try and arrange the phone calls after work as far as possible. If it is not possible to do them after work, you will need to use your lunch period. Consider that an interview might take 40-60 minutes (allowing for the interview to start later than agreed), which might be your entire lunch. You also need 5-10 minutes to walk to your location, and 5-10 minutes to walk back. Moreover, you will need a clipboard or writing book with a hard cover to do the brainteasers and will need to carry it out of the office without arousing suspicion.

Some interviewing guides state that you should never use a mobile phone for phone interviews, as a landline will always have better quality. This is true, but in the case of a stealth job-search landlines are a luxury. Expect to use your mobile phone, but find a good headset with a good microphone. It may even be worthwhile to invest in a separate microphone, as the microphones that come with most headsets are sub standard. If you are often sitting outside, research a product known as a “dead cat” wind muff. My personal preference, while stealth interviewing in London, was to go and sit on a bench near the river, in a semi-secluded area. Oddly, rainy days were the best; there would be few other people present, meaning I could sit under my umbrella and do the interview relatively undisturbed, cold fingers aside. I flirted with the idea of using a phone booth, but I didn’t know whether anyone still used those and thought being inside one for 60 minutes might arouse suspicion.

If you pass the phone rounds you will get invited for face-to-face interviews. This can either take the form of a single interview, or a day of interviews (known as on-sites or superdays). For superdays, the best is to schedule them on Fridays or Mondays. That way you can take a day’s worth of leave under the guise of a long weekend, and avoid suspicion. One-hour interviews are more annoying, as you have to take a half-day or full day’s worth of leave, which is an expensive way to do things. Few financial houses would be willing to accommodate you by having these interviews after hours, but it is worthwhile to ask. While I recommend only using your annual leave days for interviews, some individuals engage in more risky behaviour like scheduling interviews on the same days as doctors’ visits, or by lying outright and taking a sick day. This can have very serious repercussions, and you will have to evaluate the risks for yourself. Your risk will depend on how replaceable you are.

With all of the above, there is the risk that your current employer might find out you are interviewing. This may or may not be a bad thing, depending on how you act, and how they act. In the worst case scenario they will, unbeknownst to you, become aware that you are job hunting and take actions to replace you. It is more likely that they will be too busy to notice, or that they will confront you if they do. If confronted the best strategy is to be upfront.

When asked whether you are interviewing, casually answer in the affirmative and point out that you are always interviewing. Interviewing keeps one on one’s toes, it is a great way to ensure one is up to date with the latest techniques in your field, and it helps one to estimate one’s value in the market. Say you have a personal policy to go for at least two interviews a year, regardless of your intention to take another job. There is a difference between job hunting and interviewing; you are merely engaging in the latter. It is a confidence trick, if you don’t act like someone who got “caught out”, you won’t be someone who got caught out.

References:
Crack, T. F. (2008). Heard on the Street: Quantitative Questions from Wall Street Job Interviews. Self Published.
Joshi, M., N. Denson, and A. Downes (2008). Quant Job Interview: Questions and Answers. CreateSpace.
Wilmott, P. (2009). Frequently Asked Questions in Quantitative Finance. Wiley.

Scam in your Inbox

The tuition and fees listed below go into effect on July 1, 2017 for all degree programs at our Hyde Park, NY campus.

First Semester Freshman  
Tuition* $14,690
Application $50
Supplies $755†/$620††
Board**  $1,775
General Fee+ $740
Total $18,010/$17,875

I’m not what you’d call a “mathematologist”, but according to my iPhone, $17,875 * 8 = $143,000 to learn to cook. Don’t worry, though–you can borrow the money at a mere 7.9%, meaning that at $1,500/month, you can pay it off in 30 years. This will cost you a further $82,000 in interest.

$1,500/month is $18,000/year. It’s hard to put a price on education, but on the other hand, you can put a mean annual wage on a cook, and that wage is $24,410. Let’s be reasonable, though. A graduate of a CULINARY INSTITUTE surely won’t be stirring vats of prole chow in the basement of a Sodexho factory! They’ll be 90th percentile and earn the princely sum of $35,090. (Of course, that’s 42nd percentile overall.)

So let’s recap. If you go to cooking school, you borrow full freight, and you get a prestigious cooking job when you’re done, you get to keep $17,090 after your student loan nut. For a single, childless person filing in Illinois claiming the standard deduction and the maximum educational tax credit, there’s tax liability of about $5,000/year, so make that $12,090. You’ll be living on $1,000 a month for 30 years. Of course, that’s $10,680/year more than you’d make if you were a median cook earning $24,410. In that case you’d owe $4,338 in tax, leaving you with $2,072 to live on for an entire year. (This is about the GDP per capita of Uganda).

How’d this happen in the richest country in the world? No, not Qatar, the USA! Some would have you believe that this happens because kids don’t do enough chores. These people are imbeciles. What they’re doing is like trying to bail out a ship that’s been hit by a torpedo. The truth is that the USA has a highly productive population, but very few “producers” are allowed to keep much of what they’ve produced. We thus have the strange spectacle of a rich nation full of hardworking people who are poor.

I’m singling out schools for this treatment because the social function of schools is education, not profit. Obviously the faculty and staff need to get paid, but there’s a sort of social consensus that schools are places to get help. This consensus is reflected in law — Harvard isn’t taxed as though it were a huge investment company, though maybe it should be. But there’s an inchoate sense in which hospitals, doctors, universities, schools, etc. are places where people used to be able to go for help, but no longer can. They’re no longer havens in a heartless world, only another venue for incessant, hostile competition.

This has been a long time coming. Financial institutions are also growing increasingly scammy. Perhaps it’s no wonder that one of the most famous movies ever is on just this topic– or that it’s a fantasy.

“I’m Too Smart to Be Poor!”

These days, the old “go to college” life script is failing. But what about the “become a professor” life script? Even during the long, palmy Boomer afternoon, people knew that professors were poor, didn’t they?

Come to that, what valuable skills do academics have, exactly? It’s true that many academics have deep insight into interdisciplinary cultural analysis, but it’s not clear who’s going to pay for that or why. Essentially, in becoming an academic, you are betting that something will turn up, because society is morally obligated to pay for academics.

I don’t want to make too much fun of this–this is a type of decision-making that made some kind of sense in a simpler world. In the brief interval of, say, 1950-1975, ratfacing somewhat receded and people could rely on their intuitions of “decency” and “propriety” as genuinely effective heuristics for making life decisions. There’s a sense in which it’s tragic that this came to an end; there’s a certain nobility to an urbanizing population working out its small-town, stiff-necked Protestant values and creating vast quantities of positive externalities for all to share and enjoy.

That said, however, I absolutely do want to make fun of various rats manqués who expected social justice sinecures and are instead finding out that universities are run by people who “Think Different“, in the sense that they care very much about posturing as humanitarians and giving their customers curated experiences while ruthlessly exploiting workers, business partners and even their own families.

Therefore, let’s all laugh heartily at the miserable lives of failure facing the people whose job market looks like this:

University of Illinois-Chicago.
Visiting Lecturer-German Basic Language Program Director for AY 2017-2018.

The Director will coordinate 14 sections in the blended basic German language sequence (first through fourth semester), supervise and train about 10 teaching assistants, teach three advanced language and culture courses, and participate in departmental events, such as the High School Day.

Qualifications: Candidates must be ABD (PhD preferred), have a strong teaching record, and have a background in Second Language Acquisition or a related field. Native or near-native competency in German is required. Preference will be given to candidates with experience in language program direction, materials development, and computer-mediated learning.

Currently this is a 67% position for $28.000 and benefits are prorated.

Reminder: this is around 35% of what a McDonalds manager makes in Chicago. At least it’s slightly more than welfare–although after student loans, it’s probably a wash. No wonder revolution is so much on the academic mind. #FightForFifteen!