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Bring Down the Ruling Elite
The Market Oracle ^ | Aug 07, 2010 - 05:32 AM | Gary North

Posted on 08/07/2010 8:26:18 PM PDT by Milhous

Ruling elites as recently as 1600 appealed to God to justify their continuing rule. This was called the divine right of kings: rulership beyond any earthly court of appeal. That began to be undermined in the second half of the seventeenth century. A century later, Enlightenment democratic theory had replaced the divine right of kings. The divine right of Parliament or the divine right of the People replaced it.

This forced a major strategic change on the ruling elite. The ruling elite has to pretend that it does not exist. It formally acknowledged the legitimacy of the People as the final court of appeal. This involved training and screening the judges.

Basic to maintaining this deception has been control over the media. Also vital has been control over the schools – compulsory attendance laws, teacher certification, tax funding, and school accreditation. Above all has been control over textbooks.

This control is ending in the area of printed media, especially newspapers, which are dying. Control over TV news is fading. Digits are killing them. Now control over education is about to be undermined. Same reason: digits.

COMPETING DIGITAL CURRICULA

I have recommended to Ron Paul that he hire a director of curriculum development in one of his educational organizations. The director should then contract with Ph.D.s to create a comprehensive K–12 curriculum. Once it is ready, Paul's organization can post it online for free. I have presented this plan here.

Some parents will want courses taught live. Paul could also put together a faculty of graduate students with M.A. degrees or retired Ph.D.s to provide real-time lectures. The exams can be administered digitally. Record-keeping is digital.

He could charge a minimal $250 per course and split the money 50–50 with the faculty member who teaches it. This should be a profit-seeking venture. It could easily generate $25,000,000 a year. I have explained this here.

Free academic software now allows this. It's called Moodle. Any medium-size organization can now afford to create an online high school or even a university with this open source software. The Mises Institute now has its own online program called Mises Academy. People pay a minimal $250 to take a weekly class. Dr. Tom Woods is teaching a course on Roosevelt's New Deal this fall.

The existing system of government-funded education is facing a technological challenge. The Web can deliver content for free. The model for this is Salman Khan's wonderful Khan Academy. Students from all over the world start with 1 + 1 = 2, and go from there through calculus. It is all done with free 10-minute YouTube videos.

He did this in his spare time just because he wanted to. Now he has funding to create an entire curriculum.

In contrast, this is the model of today's high school.

Right? Right! You know it. I know it. We have known it all our lives. It never improves. It gets more expensive. It gets less efficient. We know it has no hope. Every few years, reformers announce a "new, improved" approach. It is not widely adopted, and wherever it is adopted, scores get worse. They will call for reforms forever. The system will just get worse.

It is paid to get worse. Tax money is automatic. No one stands up locally and runs for the school board on this platform: "Let's cut the budget by 10% next year, and another 10% the year after next." That would be considered the equivalent of blasphemy. Yet we know the tax-funded schools will not improve. Anyone who is so naïve as to believe that the Next Great Reform will be successful throughout the country probably ought to be institutionalized – at a minimum, he should be kept away from sharp objects.

THE COLLAPSE OF THE ACADEMIC CARTEL

The problem has been that private schools, also burdened with physical classrooms and buildings, are expensive. Not many parents have been willing to pull their children out of the tax-funded schools and enroll them in a private academy. They grin and bear it. "Our schools are not like those other communities' schools. Ours are highly rated." Really? Rated by whom? When? Using what methodology? How long ago?

Who produces the textbooks? New York publishing firms staffed by anti-capitalist Leftists? The same textbooks used in those other communities' schools? You don't say!

With the Web, a PDF file can be downloaded for free. This PDF can be a textbook. If it's in the public domain, it's free. You can print it out. Cost: toner and paper. Maybe you will want to buy a 3-hole punch and a $7 binder. After all, that 3-hole punch is a permanent investment. Amortize it over a 30-year period. You can afford it.

Do you want a video-based course? Salman Khan offers them.

How about MP3 audio files? There are free MP3 hosting sites. Anyone can post lectures.

MIT has put 2,000 mini-courses online for free. Did you know this? It's here.

Local colleges have resisted this. If you were a faculty member of Podunk State University, would you want the whole world to see you and your peers online, 24x7? Would you be confident that parents and students would then be willing to pay $50,000 to get a degree from your backwater institution?

So, university faculties are now in a difficult position. They must justify the absence of online lectures and course plans. Silence is embarrassing. The story of MIT's program is getting out. They will have to argue that MIT's online curriculum is a fluke, that a normal university would not be wise in posting its lectures and course notes for the general public to view free of charge. Yes, MIT can do this, but it's different. It's different because. . . . Well, anyway, it's different. It's not fair to use it as a model. Why not? Because it's the best. The academic world knows it's the best. As an MIT T-shirt says: "Harvard: Because not Everyone Can Get into MIT." The best doesn't count.

By the way, Salman Khan went to MIT and then the Harvard Business School. Now look what he's done. What's Podunk State to do?

Podunk State knows it is delivering a substandard product. It knows that it can keep its doors open only because tax money subsidizes its program. If it is possible to provide digital education, with digital exams, digital grading, and digital record-keeping – and it is – then what does Podunk U bring to the table that (say) the 100 best colleges and universities could not do better? What is the justification for Podunk State?

Accreditation. That's it? That's it.

The collegiate system is a cartel. It is now being threatened by the University of Phoenix, with its 500,000 students at (probably) $10,000 each per semester. The academic community sees the threat of profit-seeking universities. With 15,000,000 students enrolled, it would take only three-dozen University of Phoenixes to teach them all. Let's be generous. Say that 100 schools could do this. What would happen to the other 4,000?

Cartels always collapse. Only the threat of government violence against "cheaters" can sustain cartels. The collegiate cartel in the United States is maintained by a series of Federal government-recognized but privately run accrediting agencies – agencies staffed by members of the cartel. Here is the list.

What breaks cartels? Price competition.

PRICE COMPETITION

Decades ago, management expert Peter Drucker observed that whenever a new production technique lowers costs by 90%, it comes to dominate. The old producers can fight it, but they cannot prevail.

He said that existing producers can fight by pointing to the prestige of owning an expensive version. This is an appeal to the rich. It is an appeal to status. If you want an example of the status-dominated argument, see the response of the faculty at the University of California, Berekey, to the sensible suggestion that the campus offer distance-learing degree programs.

People who are really self-confident about their status do not play this game. I remember seeing an interview of Denzel Washington. He showed his watch: a Casio. "It cost $35, and it keeps perfect time." That kind of statement sends a chill down the spines of people working for Rolex.

Today, the cost of delivering a good education has fallen by far more than 90%. It has fallen to the cost of bandwidth. Bandwidth keeps getting cheaper.

Back in 1997, Drucker gave an interview to Forbes. In that interview, he offered this assessment and prediction.

Thirty years from now the big university campuses will be relics. Universities won't survive. It's as large a change as when we first got the printed book.

Do you realize that the cost of higher education has risen as fast as the cost of health care? And for the middle-class family, college education for their children is as much of a necessity as is medical care – without it the kids have no future.

Such totally uncontrollable expenditures, without any visible improvement in either the content or the quality of education, means that the system is rapidly becoming untenable. Higher education is in deep crisis.

If he was correct, the large physical universities have only 17 years to go.

Do I think they will disappear this fast? No. Why not? Because control over education is the #1 control device of the ruling class. It is even more important than the control over central banking.

The American educational system absorbs something in the range of 6% of the country's GDP, which means over 10% of the private sector's output. The finished product is a curriculum built on the presuppositions favored by the ruling class. State-funded institutions teach respect for state funding and the bureaucrats who control the flow of funds.

If state-funded education were ever to end, the major means of control by the ruling class would end. The ruling class will not surrender this control without a fight. But it will lose this fight.

The tools of this fight are digital. The basis of this fight is ethical: the right of parents to control the content of their children's education. The state-funded bureaucrats know this. They have fought ever since the foundation of the modern educational system in Prussia after 1810 to insulate their class from political control, while collecting tax money. This is the basis of the doctrine of academic freedom. It means freedom from interference by taxpayers and politicians.

By severing payment from control, the educrats have gotten themselves a sweet deal. Like the Congregational ministers in New England before 1819, they are on the state's payroll, but they insist on autonomy.

The cost of this arrangement is skyrocketing. The educational cartel is facing a revolt. Parents who don't like the content of tax-funded education are breaking ranks. They are teaching their children at home. This was fought by the states in the 1980s, but a series of court cases undermined the laws against home schooling.

Now budget cuts are forcing public school districts to adopt distance-learning programs. This is the death knell for the system. The tax-funded schools are facing budget ceilings. Meanwhile, education is getting steadily cheaper.

Dr. Art Robinson's Robinson Curriculum costs $200 for K–12. It's a one-time payment for the entire family. Yet it could be placed online and given away for free. The curriculum is self-taught. Students who pursue it can quiz out of two years of college, as his children did. They can enter college as juniors at the age of 16.

Of course, a wise parent will not send a child off to college at age 16. So, the child can take the last two years in a program such as Louisiana State University's distance learning program, or at Excelsior College, a private online campus.

Total cost of college? Under $11,000. The student can work part-time and pay his way through college.

Or else he can ask his parents to foot the bill of a conventional on-campus program ($50,000 to $250,000). He can also take on $20,000 in personal debt, which is now the national average.

If he flunks out, all this money is down the drain. Yet about half of students who enroll as freshmen do not graduate.

Which approach makes more economic sense?

What are you buying? An education or a shot at status? Is it a Casio or a Rolex?

There are not many Rolex-type watch firms. There are only about three-dozen Rolex-type universities. They enroll about 2% of the college population.

What is the future for the 4,000 others? Extinction or adjustment to the world of digits.

Digits are cheap.

A DIGITAL DAGGER

This is a digital dagger at the heart of the ruling elite. As this spreads, it will be the end of the nearly monolithic educational worldview, a worldview that rests on the assumption that ideas must be controlled, and that this control is best accomplished through screening. Such screening procedures must be in the hands of gatekeepers. These gatekeepers must be certified by other gatekeepers and protected by the state.

The Internet has destroyed most of the walls that give power to control over the gates. The center will not hold. The many competing views of how the world works will act as acid for the worldview of the power elite.

The historical mark of the collapse of the strategy of gatekeeping, after 5,000 years, was Matt Drudge's 1998 story about "Newsweek," which had suppressed the story of the unnamed intern and Bill Clinton. Soon, she was named. Then Clinton was impeached. His Teflon charm let him avoid conviction, but his reputation never recovered. He will always be remembered as the smiling rogue with a roving eye and a cigar. This is not what a member of the ruling elite expects after his successful lifetime effort to shinny up the greased pole of political success. It takes all the fun out of it.

We need an image that represents the digital transformation. I think it ought to be Alex Jones's bullhorn. He posts those video clips of him and some of his supporters standing outside a Bilderberg meeting or some other closed-door conclave of the ruling elite. He has his trusty bullhorn in hand. He shouts at them. He tells them that the People are watching. They don't know what to do about this. The video will be on YouTube within a few days – maybe hours.

Are the People watching? A few may be. Probably not all that many. They are watching funny videos, or pornography, or some other entertainment. But, from the point of view of the ruling elite, nobody is supposed to be watching a Jones video. They hate him and his bullhorn, but they can do nothing about it. Yes, someone hacked Jones's YouTube video of "The Obama Deception" in mid-July, removing it after 6,000,000 hits, but that merely annoyed him. It did not stop him. It is back up.

CONCLUSION

We are living in the era that will go into the textbooks. If I had the influence to name it, the way that historians designated 1946–1991 as "the Cold War," I would call 1995 "the end of the gatekeepers." It is the Berners-Lee era, but that reference is too obscure.

Every ruling elite rules on behalf of a basic idea, and this idea usually has a slogan. I think the ruling idea today is this: "the mixed economy." Digital technology and state bankruptcies are going to unmix it.

Karl Marx called capitalism's system "the cash nexus." Others summarize it as "money talks." I call it price competition.

The ruling elite has justified its claim to sovereignty and therefore legitimacy in terms of superior technological wisdom – the unique possession of an elite. One institution stands as a testimony against such a claim: Wikipedia. I think it will still be around in 2100. I don't think today's ruling elite will be.


TOPICS: Culture/Society
KEYWORDS: education

1 posted on 08/07/2010 8:26:19 PM PDT by Milhous
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To: abb; conservatism_IS_compassion
ping
... The ruling elite has to pretend that it does not exist. It formally acknowledged the legitimacy of the People as the final court of appeal. This involved training and screening the judges.

Basic to maintaining this deception has been control over the media. Also vital has been control over the schools – compulsory attendance laws, teacher certification, tax funding, and school accreditation. Above all has been control over textbooks.

This control is ending in the area of printed media, especially newspapers, which are dying. Control over TV news is fading. Digits are killing them. Now control over education is about to be undermined. Same reason: digits. ...

2 posted on 08/07/2010 8:28:04 PM PDT by Milhous (Confusion to our enemies.)
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To: Milhous

Biden Gump


3 posted on 08/07/2010 8:29:22 PM PDT by FrankR (It doesn't matter what they call us, only what we answer to....)
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To: Milhous
This was called the divine right of kings: rulership beyond any earthly court of appeal. That began to be undermined in the second half of the seventeenth century.

It still exists in Thailand.

4 posted on 08/07/2010 8:36:05 PM PDT by killjoy (Life sucks, wear a helmet.)
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To: Milhous

Interesting article. Thanks!


5 posted on 08/07/2010 8:43:55 PM PDT by ConjunctionJunction (I can see November from my house.)
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To: Milhous
Thank you. I have the moodle site bookmarked, will probably set up a server, and go more opensource on the entrenched ruler wannabes.

I've audited about 120 hours of the MIT lectures and more of the Google TechTalk lectures. Free information, freely given and freely passed is a great thing.

Stealing intellectual property, on the gripping hand, is something different. Folks need to learn the difference and respect it.

/johnny

6 posted on 08/07/2010 8:46:59 PM PDT by JRandomFreeper (Gone Galt)
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To: RayChuang88
ping
Like the Second Wave TV networks (or for that matter smokestack industries), our mass education systems are largely obsolete. Exactly as in the case of the media, education will require a proliferation of new channels and a vast expansion of program diversity. A high-choice systems will have to replace a low-choice system if schools are to prepare people for a decent life in the new Third Wave society, let alone for economically productive roles.
- "PowerShift", Alvin Toffler

7 posted on 08/07/2010 8:49:12 PM PDT by Milhous (Confusion to our enemies.)
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To: Milhous

ping for later


8 posted on 08/07/2010 8:52:56 PM PDT by Red Boots
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To: Milhous
John Dewey, American educator, philosopher (1859-1952):

"The children who know how to think for themselves spoil the harmony of the collective society which is coming, where everyone would be interdependent. "

9 posted on 08/07/2010 8:59:08 PM PDT by Vince Ferrer
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To: Milhous
The problem is that the costs for the state educational system are hidden, and institutionalized to the point that it is embedded into state constitutions. Online education is cheap, but public education is "free."

Yes, a revolution is coming eventually, but it will take a long, long time to overturn the necessary legislation. But this economic crisis is a good time to start planting the idea of the breakup of the educational system.

10 posted on 08/07/2010 9:04:44 PM PDT by Vince Ferrer
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To: Red Boots

ping for later


11 posted on 08/07/2010 9:28:27 PM PDT by Psalm 144 (We have, therefore, to resolve to conquer or die. - Samuel Adams)
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To: Milhous

bump for read


12 posted on 08/07/2010 9:28:31 PM PDT by Louis Foxwell (They are the vultures of Dark Crystal screeeching their hatred and fear into the void ....)
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To: Vince Ferrer
The powers-that-be are going through a reality check. For instance, at least a trillion dollars is needed by the state of Illinois alone to pay for its public pensions.
Six Amazing Facts About Illinois State Pensions:
  1. Almost All of These Multi-millionaire "Servants" Are Educators.
  2. Every One of These "Servants" Are Tax Funded Multi-millionaires.
  3. Illinois Taxpayers On The Hook For At Least A Trillion Dollars in Taxes to Pay For State Retirements.
  4. Sixty-three State Employees Had Pensions Greater Than President Clinton's Pension.
  5. Average Years Worked In University System for $100,000 Pension: 29 Years.
  6. Average Pension For 35 Years Worked In University System: $160,444.
Options open to politicians (eg the people) are rapidly dwindling. It's getting to the point where politicians may either commit political suicide by managing economic collapse or do nothing and ensure a chaotic economic collapse. My money's on the do nothing camp.
13 posted on 08/07/2010 9:44:15 PM PDT by Milhous (Confusion to our enemies.)
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To: Milhous

It all begins locally. Support your local candidates and state candidates and congressional and US senate candidates. That’s what I’m doing. Lets get real folks in there at all levels. We need to get off of our asses and work for this.
Defeat the RINOs in the primaries and the rats in November.


14 posted on 08/07/2010 9:46:33 PM PDT by RedMDer (Throw them all out in 2010... Forward with Confidence! Forward!)
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ping


15 posted on 08/07/2010 9:47:06 PM PDT by Britt0n
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To: Milhous

For later read...


16 posted on 08/07/2010 9:48:09 PM PDT by WKUHilltopper (Fix bayonets!)
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To: Milhous

Irony of ironies...I earned my teaching certification through a company that uses Moodle. I thought the technology was just amazing!


17 posted on 08/07/2010 10:00:19 PM PDT by Aggie Mama
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To: JRandomFreeper
I thoroughly enjoy watching MIT OpenCourseWare rock starz such as Walter Lewin. A typical lecture available on youtube blows the competition clean out of the water.
"Harvard: Because not Everyone Can Get into MIT."

18 posted on 08/07/2010 10:08:11 PM PDT by Milhous (Confusion to our enemies.)
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To: Milhous

ping


19 posted on 08/08/2010 1:04:21 AM PDT by Brouhaha
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To: metmom

Ping.


20 posted on 08/08/2010 1:34:49 AM PDT by conservatism_IS_compassion ( DRAFT PALIN)
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To: Milhous
At least 15 years ago - probably longer - I predicted the demise of the brick-and-mortal school. That was before the internet took hold, and I was thinking in terms of CD-Rom distributed educational software. Now in hindsight, the net has taken on the job.

And the more curricula are out there, and the cheaper those curricula are, the less legitimate the brick-and-mortar school will be. It's not a question of if but when parents wake up and realize that the cost of an education - including college - would pay parents handsomely to homeschool K - college graduation. It would seem that the technology would also interest churches in a revival of sectarian education . . .


21 posted on 08/08/2010 1:45:28 AM PDT by conservatism_IS_compassion ( DRAFT PALIN)
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To: Milhous

If you learned anything about good management and/or sales; you learned from Peter Drucker. Absolutely one of the greats.


22 posted on 08/08/2010 2:10:11 AM PDT by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: Milhous

Why in the world would he deal with Ron Paul and his organization?

Honesty is one of the cornerstones to Peter Drucker’s teachings.


23 posted on 08/08/2010 2:12:45 AM PDT by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: conservatism_IS_compassion
when parents wake up and realize that the cost of an education - including college - would pay parents handsomely to homeschool K - college graduation.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

I **DOES** PAY HANDSOMELY!!! We have lived it! ( Yes, I am shouting. I would like other Freepers to hear this.)

My own homeschooled kids entered college at that ages of 13, 12, and 13. The two younger graduated with B.S. degrees in math at the age of 18. The older of these two earned a masters in math at 20.

Think about the extra earnings those extra 4 years in the workplace represent! Four extra years ( depending upon whether you consider their entry-level pay or final years before retirement) add up to a hefty quarter of a million to possibly) 1 MILLION dollars.

The oldest was a nationally and internationally ranked athlete and only went to college part-time. He still finished his B.S. degree in accounting at the same age as his government schooled contemporaries....but...He now works part-time ( while getting a master in accounting) as a coach and makes $60/hour!

As for the cost of homeschooling, even in the days before computers in the home, we rarely spent more than $200 to $300 on textbooks and supplies. We **SAVED** at least that amount in the school clothing we did not need to buy.

24 posted on 08/08/2010 2:50:13 AM PDT by wintertime (Good ideas win! Why? Because people are not stupid.)
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To: conservatism_IS_compassion; Milhous

As a newly-minted amateur journalist, I briefly contemplated taking some J-school courses at the local U. Why bother, I asked myself. I regularly mingle with graduate journalists, and so far, I’ve seen nothing they learned in school that appears worth the price.

In all modesty, I’ll put my reportorial skills up against any “journalist” in the state of Louisiana.

I think I’ll stick to studying on my own.


25 posted on 08/08/2010 6:32:30 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: conservatism_IS_compassion; 2Jedismom; 6amgelsmama; AAABEST; aberaussie; adopt4Christ; ...

Ping


26 posted on 08/08/2010 6:37:04 AM PDT by metmom (Welfare was never meant to be a career choice.)
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To: conservatism_IS_compassion; 2Jedismom; 6amgelsmama; AAABEST; aberaussie; adopt4Christ; ...

Ping


27 posted on 08/08/2010 6:38:11 AM PDT by metmom (Welfare was never meant to be a career choice.)
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To: Milhous
Decades ago, companies could hire people fresh out of high school, give them tests of literacy and IQ, and place them appropriately. Lots of people got their education via correspondence school or night school on the side while they worked. Then came the Griggs v Duke Power Supreme Court decision, which said that any employment test which flunked disproportionate numbers of minority applicants was illegal discrimination.

Now, companies must require college degrees in order to make their applicant pool hopefully contain people who can read and write at a functional level. Pretty soon, they will need to demand Masters degrees to accomplish this purpose.

Eliminating this one requirement would collapse much of the Left's power. What would happen soon thereafter, once an "accredited" degree was no longer necessary, is that business groups would establish their own accrediting groups to rate the worth of degrees from various colleges, controlled for SAT score. If a top-1%-SAT student with a Harvard degree is not more valuable than a top-1%-SAT student from Penn State, then fewer parents will be interested in paying a huge premium for Harvard. If a top-1%-SAT student is offered a starting salary out of high school similar to what a college grad gets, then the allure of college fades.

28 posted on 08/08/2010 6:56:36 AM PDT by PapaBear3625 (Public healthcare looks like it will work as well as public housing did.)
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To: wintertime
Think about the extra earnings those extra 4 years in the workplace represent! Four extra years ( depending upon whether you consider their entry-level pay or final years before retirement) add up to a hefty quarter of a million to possibly) 1 MILLION dollars.

A person's teens and 20's are when his energy is at its peak. The more of that period are spent in advancing a career, the better off he'll be. Also, if people are financially established by mid 20's, it makes it more likely that they'll marry and have kids in their peak fertile years. Delaying marriage and kids until 30 is killing the middle class. Plus many couples decide to only have one kid because of college costs.

29 posted on 08/08/2010 7:03:41 AM PDT by PapaBear3625 (Public healthcare looks like it will work as well as public housing did.)
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To: PapaBear3625
Delaying marriage and kids until 30 is killing the middle class. Plus many couples decide to only have one kid because of college costs.

That's the Marxist plan. Destroy the family.

One good way to do that is to keep kids in school over more years, and make it too expensive to marry and have kids.

30 posted on 08/08/2010 7:14:18 AM PDT by wintertime (Good ideas win! Why? Because people are not stupid.)
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To: conservatism_IS_compassion

I will finish up 26 years of homeschooling in another five years. no question that the options have expanded and one can have a very different homeschool education now than when I started.

Nice.

For about 1500 a piece you can give your child a tremendous education and with the people you want your children to be with.


31 posted on 08/08/2010 3:27:30 PM PDT by Chickensoup (I am absolutely done. I am a conservative libertarian.)
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To: Chickensoup

ping


32 posted on 08/09/2010 4:44:11 AM PDT by RJR_fan (Christians need to reclaim and excel in the genre of science fiction.)
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To: Milhous

bttt


33 posted on 08/09/2010 6:17:57 AM PDT by aberaussie
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