Poor? No.

Culture, Economy, Media, War and Politics

To me, the most interesting reaction to the recent Guardian/Glenn Greenwald reporting on the US Government’s vast, creepy, and stupid engagement in various programs of indiscriminate eavesdropping is the shock and disbelief evinced by, mostly, partisan defenders of the President to the effect that there is something deeply disturbing and unbelievable about the idea that a “high-school dropout” could have advanced, succeeded, and come into a six figure salary. Nevermind that the technology industries have always valorized the dropout narrative and that there are prominent tech billionaires offering substantial grants to kids who skip college in order to do something useful with their lives. I’m reminded of some educational activists who point out that in the eyes of the New York Times et al., $250,000 a year is too poor to live in Manhattan, but a teacher making fifty grand is an entitled sinecure living high on the hog. The point is . . . no, the question is: is $200,000 a lot of money to make in a year? Well, in the eyes of the professional classes and their media interlocutors, the answer is: no, if you’re the right kind of person; yes, if you’re not.

The people who express these doubts in the media, who find it so extraordinary that a guy with a mere GED could make what still passes for a decent living in this country, and indeed, find it in a sense offensive that this should be the case, as if the lack of a particular kind of credential is in fact a moral demerit that renders personal financial success not merely suspect but anathema to the proper order of an economy, are the sort of people who eagerly get on board with notions like, “every child should have the opportunity to go to college.” You can ignore the word opportunity; it is a mere formalism. They mean, everyone should go to college. (The obvious economic rejoinder is that if the thing is no longer scarce, it is no longer valuable. Witness, ladies and gentlemen, the Bachelor’s degree. But I digress.) Usually this exhortation is coupled with some vague notion that we—America, if you were wondering—are being outcompeted by China in the war to endow our children with “the skills they will need for the jobs of tomorrow.” No one ever quite gets around to mentioning what those skills are. I assume they mean computers. And it appears, InshSteveJobs, that what a guy or gal needs in order to figger out them crazy computers, is not a college degree, but access to a computer.

In fact, the universalizing of college education has completely elided the distinction between credential and skill. In the days when college was just finishing school for men of a particular class, there was a lot less confusion. I’ll confess to being a conservative sympathizer in certain domains, but I don’t pine for those days. They were shitty. Nevertheless, there was a very real recognition that reading history didn’t make a man fit to be a banker; it made a man clubbable, and then he learned to be a banker. But I propose to you that if Edward Snowden had a BA in English and Creative Writing from Oberlin College and went on to become a high-paid analyst at a defense contractor, no one would say boo about it, even though he would be in a practical sense no more qualified, and hell, probably less so, than any randomly selected dropout blogger. Guys, I know whereof I speak.

What about a degree in visual arts and documentary filmmaking—here I will reveal my conservative sympathies and laugh that such things exist—qualifies a person to judge, one way or other, the professional and vocational qualifications of a person to be a data systems/IT guy? Did you even set up your own home WiFi? Was Edward Snowden a qualified employee? I don’t know, but the dispositive evidence one way or other has nothing to do with whether or not he got into Phi Beta Kappa. The sheer de haut en bas snobbery of it is pretty astonishing, especially as it comes from the sort of technocratic centrists and liberals for whom class distinction is supposed to evaporate in the upward movement of social progress. Hey, I think the IT guy who fixes my copier who probably has a 2-year degree from somewhere makes more money than I do, but you know what, I’m just a manager, whereas he has skills.

You Can’t Spell Revenue By Principal Operations Without Venal

Culture, Economy, Education, Plus ça change motherfuckers

Diane Ravitch, now an indefatigable opponent of the weirdly popular idea that the proper formative model for The Children, Who Are the Future is a combination of factory feedlot and highway weigh station, finds the Washington Post lambasting the State of Texas–yes, that Texas–for “reduc[ing] the number of end-of-course exams required for a diploma and loosen[ing] the required courses for graduation.” Needless to say, the Chinese (“increased international competition”) make an appearance, as does the, uh, the, uh, the spurious notion that “an auto technician or sheet-metal worker” needs something called Algebra II. The fact that the Post editorial board uses the term “auto technician” suggests a gang of 24-month BMW leaseholders who haven’t exactly been frequenting the local Meineke for the $29.99 fluids brakes & rotation special, but, you know, whatever. Look, we all know that these people are assholes, but Ravitch is wrong to suppose that they also don’t know what they’re talking about. She’s kinder than I am. Unfortunately Diane, they’re just assholes.

Now I am an agèd 32, an icy planetoid careening through the scattered disk of the Millennial Generation, far, far from the warm, YOLO star at its core, and I can’t remember whether I ever took Algebra II, or if it had anything to do with getting a job. I do, on the other hand, know a thing or two about financial accounting and corporate finance. Also, I have an internet connection, and therefore access to the Washington Post Company’s Investor Relations Page and Annual Report. So lemme first lay something graphical down upon ye:

That is to say that 55% of their gross receipts come from boondoggling students. But the Post is a business, and you don’t measure a business by revenues alone. You gotta look at income, and the nice folks at Investor Relations are kind enough to provide revenue and income by operating segment, and right now, the picture of the Education segment resembles a particularly terrifying Bosch. In 2010, the segment booked $360 million in operational income. In 2011, it dropped to $96 million.

In 2012, it booked a $105 million loss.

Damn, girlfriend, don’t take my word for it. What’s management got to say?

Education Division. Education division revenue in 2012 totaled $2,196.5 million, a 9% decline from $2,404.5 million in 2011. Excluding revenue from acquired businesses, education division revenue declined 10% in 2012. Kaplan reported an operating loss of $105.4 million for 2012, compared to operating income of $96.3 million in 2011. Kaplan’s 2012 operating results were adversely impacted by a significant decline in KHE results; a $111.6 million noncash goodwill and other long-lived assets impairment charge related to KTP; and $45.2 million in restructuring costs. These were offset by improved results at KTP and Kaplan International.

In response to student demand levels, Kaplan has formulated and implemented restructuring plans at its various businesses that have resulted in significant costs in 2012 and 2011, with the objective of establishing lower cost levels in future periods. Across all businesses, restructuring costs totaled $45.2 million in 2012 and $28.9 million in 2011. Kaplan currently expects to incur approximately $25 million in additional restructuring costs in 2013 at KHE and Kaplan International in conjunction with completing these restructuring plans. Kaplan may also incur additional restructuring charges in 2013 as the Company continues to evaluate its cost structure.

When a company starts to “incur additional restructuring charges” as it “continues to evaluate its cost structure,” you can be reasonably sure that, in the poetical language of MBAs everywhere, their Revenue Model Is Fucked. Pace WalMart and its giant un-staffed aisles of rotting meat, you cannot make profit on cost cutting and labor arbitrage alone. At some point, you have to sell shit that people want to buy at a price somewhat greater than the expense of actually putting it on the shelves. But this is the sort of fundamental logic of the marketplace that the parishoners understand even as the high priests of late capitalism keep yammering about miracles from their corner pulpits. Every braid shop in DC gets this basic equation, with or without Algebra II. Meanwhile, the WaPo group is booking $100 million dollar goodwill impairment expenses for one subdivision of its Education segment. Oh, I guess that means they have been completely misrepresenting their asset base too, huh. You mean to tell me that KTP (Kaplan Test Prep) doesn’t actually have hundreds of millions in goodwill? Like I said, not idiots. Just assholes.

Well, we’ve wandered far enough afield. The Washington Post, the newspaper, is a loss leader for the Washington Post, the company; damn, they ought to just reorganize it as a marketing division, eliminate sales and ad revenue altogether, and deduct the whole thing as a business expense. And so, anytime you see the Post editorializing about something that directly affects the core businesses (roughly speaking, training scams and cable TV), you should ask, cui bono? Which roughly translates as, NO, FUCK YOU!

You see, when even Texas recognizes that even these United States are still filled with “auto technicians” and welders and waitrons and janitors and a hundred million other mooks just trying to work a job and pay the rent and afford a beer and the WaPo’s cable box at the end of the day, well, that’s a lot less need for test prep; it’s a lot fewer kids getting shoveled into pointless 2-year Kaplan Higher Ed (KHE) ~~pogroms~~ programs in dental veterinary respiratory therapeutic office support. The thing about “rigorous” curricula and expensive testing is that it provides a busted gas cap through which rent-seeking corporations can siphon more money out of the unsuspecting public.

I mean, when you think about it, schooling is actually a pretty low-rent activity, right? Considered at its most fundamental level. You build a center-courtyard building with a bunch of identical rooms. You buy some books. You divide everyone up by age and you hire 1 staff person per 15-20 kids to talk all day. Whatever your opinions on the particular merits of universal education, this is a remarkably efficient delivery of an effectively universal service. You hire some janitors and some cafeteria ladies and maybe a coach, and then the only annual service contract you’ve got to worry about are the nice guys who fix the boilers. YO, HOW’S A DIVERSIFIED EDUCATION AND MEDIA COMPANY SUPPOSED TO GET ITS NUT UP IN THAT?

Well, what you do is you get everyone all hepped up about the devilish Chinese eating our kids’ lunch, and you add a little taste of cryptoracism about achievement gaps and such, and you get politicians and schoolboards and affiliated business roundtables and chambers of commerce to insist that without seventeen different kinds of tests, all of them proprietary, all of them supported by teacher training (fee for service) and software packages (licensing, fees, service, updates) and, for the rich kids, more test prep (fee for service) outside of school, ad inf., well, like we said, CHINA! Look out!

So basically, the guys at the Washington Post, well, they don’t know enough higher order math to go make money at their own investment firms. You gotta know, like, calculus. But they do know that selling Algebra II is one small step toward making back that $100 million loss.

Je suis moi-même plus probable d’être ivre

Culture, Media

One of the questions we might ask before concluding that David Brooks little ethical Area 51, dba “Humility”, at Yale is some sort of uniquely middlebrow, learning-annex hack job is just how unique it is, because this is an Ivy League, after all, and I suspect the course catalog is pretty well-larded with these sorts of PoliSci Rocks-for-Jocks offerings by notable alums. Brooks just has the bad fortune of being uniquely self-unaware enough to title an otherwise bland exercise in celebrity “intellectual” egotism Humility. If he’d called the class, “AmHist Colloquium: 201: The Decline of the Eastern Protestant Establishment from World War II to the Reagan Revolution,” no one would’ve said boo, and exactly the same gang of future legislative aides would’ve taken it. If you find yourself making fun of David Brooks or Yale, you probably don’t understand what either institution represents, or what their respective purposes are in the American life of the mind. Where do you think the sort of people who put David Brooks on the Times op-ed page and NPR Fridays and so on come from, Pomona? Bard? Who do think nods sagely at all those Tom Friedman columns you find so gloriously incoherent?