Student Debt: The Ultimate Hustle

Let's start by admitting something we already know: student debt in America is out of control. And by "out of control" we really mean - It might already be too late. The latest news that student debt now exceeds credit card debt should underscore the seriousness of the issue. Without recognition, we're kidding ourselves. 

Think about it, the student loan debt business now exceeds the consumer credit business. The latter is built upon a simple money making axiom: Allow people to buy shit they don't need with money they don't have. A hustle of the highest order if I've ever heard one. Before you shout, "But consumers are dumb and lack self-control, they should know better!" STOP! Because I agree. Alas there is more than enough blame to go around in the great higher education debt debacle that has consumed the last few decades. One culprit and one scapegoat would make for a much tidier story.

  1. Students - Playing the role of the consumer here, students are surprisingly unaware of their role in their own indebted demise. Almost no students engage in the due diligence an investor would before forking over $$$. Students accept the notion that higher education will ALWAYS lead to greater wealth and therefore take the higher ed sales pitch hook, line and sinker. I'm not saying the claims and studies of greater wealth might not be well-founded. But for the 98 investments that are legit, there are 2 that go the way of Bernie Madoff and could have been avoided with healthy questioning and skepticism.
  2. Institutions - In the consumer credit analogy, they are the good that students covet. Lies, damn lies and statistics; US News and World Report Rankings and a host of other thinly veiled marketing tools make them impossible for the upwardly mobile to ignore. They respond to supply and demand and generally price their product according to market demand just like anyone else in a capitalist economy. We expect them to responsibly control costs, but we shouldn't. Oh yeah and the vast majority claim to be "not-for-profit". That last part confers a range of benefits that contribute to the hustle. 
  3. Lenders - The lender really is the enabler here. It's the credit card that makes the trip to Vegas or Cabo a reality even though you make $40K a year and spend $1500 a month on rent. Lenders and institutions work seamlessly together. The former makes the latter's product attainable to all (or most). So long as demand is strong, neither has any incentive to control lending or costs. Oh yeah, let's not forget education debt is almost NEVER erased in bankruptcy court. It's the herpes of debt products -  with you forever. 
  4. The Government - The right to an education is universally upheld in international law. In the US, the government's role in higher education is becoming more complicated by the second, not to mention that it holds the majority of recent student debt consolidation. Folks like Dan Prepas, a classmate of mine at Middlebury, know a lot more about this than I do, but suffice to say the Fed has the ability to change the behavior of the above three players through regulation and policy change. Let's not forget the Bennett Hypothesis looks more and more prescient today than ever before.

The hustle is simple: Take a universally revered concept like saving fluffy kittens, buying a wedding dress or allowing access to higher education in this case; commodify and monetize it in a modern capitalist economy and wait for the profit (read carnage). This is where group think on a massive scale can be dangerous. It goes something like this. 
  • You need a college degree to be competitive and to earn enough money to live better than your parents did. (Parents help sustain this more than anyone)
  • America will continue to create jobs for new graduates in this service-based, innovation economy in which we live. 
  • You need the best (read most expensive) degree possible in order to compete. Taking out a loan is a small price to pay for this increased competitiveness. 
  • Education costs a lot because institutions are in a constant pissing contest to one up themselves instead of responding to market realities that might dictate more prudence. This is America - go big or go home!
  • Once you finish, get working and pay up. Don't worry, your degree will get you a job no matter what condition the economy is in.
  • Even if you fail and want to reset via bankruptcy, tough luck, you can't.

Well what's left to say? People are pissed. Lawyers are suing themselves. Lenders are getting burned. Institutions are becoming the bottled water of the beverage industry (clip below). And the government is sitting on a powder-keg hurtling towards the sun. 

Let's face it we've failed as a society when we treat our students like credit card companies treat their slaves, ahh I mean customers. Students, shame on you too for not recognizing your fundamental power as a consumer - choice. Just because 99% of the country has been force feeding you a story about your future ever since you learned to listen, doesn't mean you have to conform and accept the reality of the graph below. My solution: Let's either treat higher education like the market based product it's operating as or treat it like the higher human right we claim it to be. This odd afterbirth of high moral ideals mixed with cut-throat capitalist realities is a heavily conflicted entity. And it should be no surprise we're seeing that now.

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Build the Diagram!

Over the years, I've come to notice a number of "high design" architecture firms that employ an intuitively appealing process for presenting their work. When I dug further, it was clear what the reasons were: 
While there are other reasons that Rem's professional progeny have succeeded, these two reasons deserve some attention. That Koolhaas nurtures these young fawns so they can eventually go out and fend for themselves reminds me a lot of the Belichick or Parcels coaching trees. From one trunk sprout innumerable branches. It's actually mind boggling and another sign of genius. Their work might speak for itself but the success stories coming from their hallowed halls speak even louder. What strikes me is hiring and creating a culture that seems to spawn an eventual ambition for independence. The turnover must be a constant HR dilemma. 

Cheers to Metropolis for creating this. . . diagram!?

But let's not forget the primacy the architectural diagram plays in the whole PLOT. For Rem and his progeny the diagram is the tour-de-force arrow in the architect's quiver. A simple visual expression of a spatial idea. And often times for these firms, they BUILD THE DIAGRAM. This approach is intuitively appealing, something I noticed as a designer but obviously has been noticed by clients as well. Here's why:
  • For one, the diagram is very intuitive and visually digestible. It tends to isolate one factor and illustrate it with a cartoon-like simplicity. Not something Edward Tufte would suggest, but nonetheless useful for connecting with a broad audience.
  • The often chronological sequence of diagrams makes the architecture seem as though it has come to be. On its surface it makes the designer's process readily transparent and not preordained. 
  • Almost invariably the diagramming involves program -  that is to say the client's perceived spatial needs. This program often gets re-aggregated and appears to be the driver of form. So in that sense, whatever the formal outcome, it seems to have its genesis in the client's needs, not the architect's whim. Huge slight-of-hand there. 
  • With many of the firms, like BIG, JDS, MVRDV, REX and MASS Studies, the diagramming includes the idea of external forces influencing form, which is why the buildings are almost never clean modernist boxes. But implicit in that is the idea that the external environment, be it wind, views or even NIMBY neighbors have participated in the making of the building.
  • Finally, an important aim of the exercise is the ridicule of the conventional. It's a not so subversive technique where the diagrams start with a boring formal solution to program and then reveals a transformation that renders the boring box as obsolete. 
The take away here is an individual and a method of production that have been hugely influential. Of course there are issues with taking a diagram and making it a building, literally (REX/OMA did it in Seattle). But almost every single offspring of Rem are larger than life personalities that make for great salesmen and have the audacity to actually do something different. I've run across a few myself and look forward to hearing the grand poonah himself speak at the GSD on Monday


Why Rich People Live in Newport

A recent trip to Newport got me thinking. Why do so many rich people live there? And what brought them there in the first place? While fashion blogs and history buffs might convince you of one reason or another, the smart people like you and I know what it really is - views! 

Now that's what I call a nice view

See even this random hot chick agrees - it's all about the views!

But views can't happen without topography and proximity. Topography to get up above your neighbor, and proximity to the viewed amenity, in this case the mouth of Narragansett Bay and the open ocean beyond. The cliff walk (see video above) is what the peons use to get views of the said ocean, but more importantly to gawk at the absurdity of Newport's Gilded Age. Jordan and I did just that on our trip. And let me say, nothing makes you feel more impoverished than checking out the Breakers, which was built for $12 million in 1895, taking 2,000 workers to complete at its height. For reference, that would be like building a $335 million home today. (Nevermind that the Vanderbilt family sold it in 1972 for only $365,000)

But follow me as I get (finally) to my point. 
Rich People Love Views. Views are Great but Require Topography and an Amenity close by. Newport has Optimal Topography and Offers some of the Best Views of Real Estates' Crown Jewel Amenity - the Ocean. Therefore the Vanderbilts must have had a Flood Insurance Rate Map.

Wait what? The proximity part of the equation is what I'm talking about. If hurricanes and dare I say tsunamis have taught us anything, its that proximity to the water comes with great risk. Proximity and lack of topography and you might wind up like New Orleans or worse coastal Japan. So those rich bastards had a flood map right? Well not exactly, but as you can see on these maps, they knew what they were doing when they built $10 million white elephants on top of the cliffs in Newport. (Area in red on both maps is the mansion enclave of the city)

Mansions and Cliff Walk are here.
Rich folks know not to build in the blue "flood" area