Congratulations, chumps!

Dear Class of 2014 – Congratulations, Chumps!

You are heirs to a great society, a great economy, a great government, and more snaky illusions than you can shake a stick at.

Memorial Day gives us an opportunity to salute those who protect the people who rip them off. Without a moment’s hesitation or thought (which is the only way to do it) they rush to the barricades or recruiting offices. Germans, French, Vietnamese; royalists and revolutionaries; Protestant, Catholic and Muslim; Nazis, Bolsheviks and Democrats; mad kings; evil dictators; oligarchs, patriarchs and string pullers – all the world’s elites should pause a minute and give thanks to the poor suckers who do their bidding.

And you, the Class of 2014, after 12 years in primary prison-like schools, and another four or more in college, now you are ready to take your place among them.

But let’s look at what you are getting yourselves into.

Specifically, let’s look at the financial system. It’s not at all the same financial system that your parents came into, by the way. And it has some new features that are going to make you the biggest chumps in history.

Did I mention the ‘Cantillon effect’… ‘intertemporal discoordination’ and ‘Baumol’s disease’? These are just ways economists have tried to understand the financial distortions and economic perversions caused by today’s money system. Look, I don’t have time to explain the entire universe to you, but here is what you need to know:

The whole system is rigged against you.

Bill Bonner on markets, economics & the madness of crowds

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Even college itself. Did you ever wonder why you went to college? And why was it so expensive? You pay an average of $30,000 per year, plus another $10,000 for room and board! As I explained on Friday, the unlimited credit of the post-1970s period favoured talkers and meddlers over doers and makers. For 90% of people, real wages have been flat since 1968. The other 10% had jobs that were mostly for college graduates, jobs in finance and administration. That’s why you’re here, because you wanted to be in that small group of Americans with rising incomes.

The last four years should have been the best years of your life. You were as alert, energetic and strong as you ever will be. And what did you really get for it? Did you learn more in school than you would have learned in real life? I doubt it.

Real life is tough. Infinitely complex. Unlimited in its subtlety and ambiguity. You never know when you’ll be tested in real life, and never know what the test will cover. So you have to be on your toes. In college, you can get through courses with Cliff Notes and cram sessions. In real life, you have to use your brain.

In college, life is stripped down, simplified to the point of caricature. People are turned into stick figures. History, politics, sociology, psychology, government, economics – all are reduced to simple narratives that can be taught, studied and learned. An infinite variety of facts and nuances must be distilled to just a few; the flesh must be boiled off the bone. What you end up with is bare, with 10% useful insights, and 90% claptrap. And we don’t even need to mention literature, art, and gender studies.

Now that you are graduating, you must think you know something. But unless you’re in the sciences or engineering, what you know is probably not worth knowing. It’s not how real life works. And the longer you spend in school studying this artificial world, the less able you are to function in the real world.

Most of history’s successful people spent little time with formal education. Alexander the Great, Julius Caesar, Aristotle, Hannibal Barca, Abraham Lincoln, Cornelius Vanderbilt. Henry Ford, Charles Dickens. Thousands of others. And as everybody knows, Steve Jobs, Bill Gates and Mark Zuckerberg all dropped out of college.

But today, big employers want you to have a college degree. Especially the biggest employer of all – the government. Heck, today Jesus of Nazareth could apply for a job as a social worker in any town in America. He wouldn’t get it. He didn’t have a diploma. Socrates could offer to teach a class in philosophy; almost every university in America would turn him down. ”Where’s your PhD?” they’d ask. Archimedes, the greatest engineering genius of all time, wouldn’t be able to design a county storm drain.

But what kind of a system wastes strong backs and ignores strong minds?

More to come.

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  • Joao Baptista


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