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University of Maryland economist Peter Morici weighs in on the cost of college, loans and how to revamp the system for students.
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And wanna talk about the job numbers -- the job numbers good bad plus what's happening overseas Peter -- Ricci.
Joins us live to talk more about this he's an economist and a professor at the University of Maryland good morning to you Peter.
The judge numbers were watching right now small businesses are creating as many jobs as they have in the past we'll get the big jobs report on Friday.
And US companies creating jobs but overseas I don't think that's very good is it.
Well I mean that's where the profits and growth -- -- you can't blame General Electric for -- creating a job in China to service the Chinese market.
We are seeing somewhat American firms becoming this enamored.
With outsourcing to China and creating jobs there to to sell products here but.
You really can't blame them for locating distribution centers management and so forth.
In the places where things are growing we -- better economic policies here we want jobs here.
Below let me -- this Ford for instance five billion dollar investment in China obviously to build cars and to sell to what is now the world's largest car market.
How does that help us in the United States other than the fact that it makes for perhaps a stronger more profitable company does -- help Ford employees in North America.
All of that -- gets to spread some of its product development costs a little further.
We can't sell in China because they maintain a 25% tariff and they had this 40% currency advantage.
The Obama and bush administration's together so -- not -- partisan here have really done -- very little to fix that problem.
So you can't blame -- for saying -- as this 765%.
You know advantage that China has I can't sell the cars made here they are so I have to go there.
If mr.
Obama wants jobs in America that he has to do more than talk with China if China doesn't respond to talk many has to start taking some actions to move them.
They'll be talking later this week secretary of state Hillary Hillary Clinton and Tim Geithner will be in China but that's -- story for another day let's talk about student loans.
We've talked about the fact that student loan debt now over a trillion dollars but you have some interest in statistics.
About who is actually caught in the student loan.
Debt trap.
Absolutely you know it depends on what you -- in college I mean if you study engineering you can look forward to an average salary over a 100000 here.
If you have a certain kid that takes the psychology major you may be looking at a salary less than forty for the very long term.
Also a lot of businesses are requiring college educations and jobs where it was commonplace -- just have a high school diploma.
And a little bit of business a little bit of training by the company.
You know two generations ago for example reporters and small town newspapers -- started about 2025000.
Dollars a year and a lot if they get up to 35000.
They don't really need a college degree to do that job.
They certainly can't service -- student loan from a private college in six digits on that salary they get they try to.
And it's not possible copy editors share insurance agents assurance of justice I have a whole long let's -- -- a jobs are knew Peter would only a high school diploma I was a kid.
Let let me ask you this question is an argument being made that because the government doesn't back student loans it's actually inflated the price of a college education dramatically.
To what it well over what it would be had the student loan program not been as large as it is is that an accurate argument.
I think it's a very accurate argument in an effort to be more egalitarian which is important we want everybody to have an opportunity.
We've essentially created a program where even the richest kids borrow money it pushes up the price and colleges are enormously adroit.
And price discrimination charging richer families more than for -- families students with loans more than those without I -- -- mean it's always shameless what they do.
And universities are very inefficiently and poorly run places that the best way to think about it is General Motors before the -- I don't want to think about General Motors before the shake up very quickly would it make sense to allow.
College students or people with student loan debt to declare bankruptcy.
Because that would then force perhaps -- the banks and those who issue these loans to do perhaps more due diligence and conversely.
-- further down the road then the colleges wouldn't be so quick to raise prices is that accurate.
Well I think that this notion that you can't discharge student loans and bankruptcy is selling.
Especially you consider that lots of times at seventeen and eighteen year old that it taking them out.
It being advised by colleges and universities to take them or by lenders that have -- vested interest in getting the students all loaded up.
You know I think that -- frankly taking advantage of children when I was a kid you weren't to the age of majority until 21.
And -- -- the Vietnam War we changed it to eighteen I think we should really rethink that should an eighteen year old get be getting on line for a couple of 100000 dollars in debt.
So they can go to an Ivy League school where they study art history on the destined to very low hearings long term they're not capable of making those decisions.
-- -- you get the last word and I'm going to say thank you at 544 you have a good day sir.
Take care when we come back a tragic car crash claimed the lives of --
