25 years old and deep in debt

[The Minsky Moment]

Well no.  Bridges to nowhere and trillion dollar airports with no passengers are not poor investments because of circular logic.

True but not relevant to the point.

Projects like the La Mancha airport or bridges to nowhere don't get built because long-term interest rates are 75 basis points lower than they "should be".  They get built because of some combination of incompetence and corruption.  You don't need an elaborate economic theory to explain this.

There is a more coherent theory of unstable investment booms out there - Hyman Minsky's.   But his theory is not Austrian "mal-investment".  It's that the boom period in an economic cycle creates feedback loops that encourage ever more leveraged financial structures and risk-taking - that ultimately prove un-sustainable and collapse.  The collapse effectively "strands" the underlying assets (they can no longer be financed on the contracted terms), and the accompanying recessionary collapse of demand may make some of them appear to be surplus.  Not surprisingly, I think there is a lot to that idea.  But it is quite different from the Austrian focus on the nature of the investment itself and avoids the question begging nature of that theory.

[The Minsky Moment]

I see no reason that malinvestment should refer only to the state. I think it's pretty clear it happens even more in the private sector.

Let's be more precise about terms.
Everyone would agree that private actors make mistakes, i.e. bad investments.  Happens all the time both big and small.  The Edsel.  The ET Atari game.

That's not what Austrians are referring to as "malinvestment". Malinvestment refers to a structural phenomenon - that investments that otherwise might be or seem economically rational are in reality not rational because of "distortions" that arise due to the government's control over monetary policy.  That concept of malinvestment is IMO the economic theory equivalent of phlogiston - its a plug-in to cover up a dogma masquerading as scientific theory.

[Admiral Yi]

That's not how the Economist is using the term.

[MadImmortalMan]

Ok, so...a developer builds 400 condos in a town with a population of 2500. Malinvestment, or no?

I would say yes, but it sounds like it must have some sort of Austrian agitprop behind it in order to qualify.

[The Minsky Moment]

Ok, so...a developer builds 400 condos in a town with a population of 2500. Malinvestment, or no?

It this a real example?

It would depend on the circumstances.  If the town is a growing frontier town, it might be perfectly rational.
If not, it is a stupid decision
Either way, it isn't what Peter Schiff is taking about.

[MadImmortalMan]

Based on a real one.

Anyway, Peter Schiff is just trying to sell gold coins. 

[crazy canuck]

Ok, so...a developer builds 400 condos in a town with a population of 2500. Malinvestment, or no?

I would say yes, but it sounds like it must have some sort of Austrian agitprop behind it in order to qualify.

If the town in question is Fort McMurray at the beginning of the last oil boom it is the best investment one could make - other than being able to time the stock market perfectly.

[DontSayBanana]

Dude throws away most of his credibility when he calls price deflators and seasonal adjustment subjective.

Also when he refers to open market or quantitative operations as price fixing.

Well, he did title it "Garbage In, Garbage Out," so it's not like you weren't warned...

[Savonarola]

Students across US to march over debt, free public college

Thousands expected to attend Thursday events taking place at colleges and universities from Los Angeles to New York
November 12, 2015 7:20AM ET

Students were set to walk out of classrooms across the United States on Thursday to protest ballooning student loan debt for higher education and rally for tuition-free public colleges and a minimum wage hike for campus workers.

Saddled with debt that can sometimes run into the hundreds of thousands of dollars, many college graduates have struggled to make payments amid an ailing economy and job market.

The demonstrations are planned just two days after thousands of fast-food workers took to the streets in a nationwide day of action pushing for a $15-an-hour minimum wage and union rights for the industry.

Events for Thursday's protests, dubbed the Million Student March, have been planned at colleges and universities from Los Angeles to New York. Thousands of people signed up to attend on Facebook groups, though it remained to be seen how many would ultimately participate.

"Education should be free. The United States is the richest country in the world, yet students have to take on crippling debt in order to get a college education," the movement's organizers said in a statement on their website.

Organizers are demanding tuition-free public colleges, a cancellation of all student debt and a $15-an-hour minimum wage for campus workers.

The total volume of outstanding U.S. student loan debt has more than doubled to $1.2 trillion, according to the U.S. Consumer Financial Protection Bureau, compared with less than $600 billion in 2006.

The bureau said there are some 8 million private and federal loan borrowers in default, representing more than $110 billion, while millions more are finding it difficult to keep up with repayments.

Dealing with swiftly mounting student loan debt has been a focus of candidates vying for the White House in 2016.

Democratic hopeful Bernie Sanders has vowed to make tuition free at public universities and colleges, and has pledged to cut interest rates for student loans.

His rival Hillary Clinton has said she would increase access to tuition grants, let graduates refinance loans at lower interest rates and streamline income-based repayment plans.

Florida U.S. Senator Marco Rubio is the most prominent Republican candidate to lay out a concrete proposal, saying he would establish an income-based repayment system for federal student loans, and would simplify the application process for federal aid.

"This is clearly an urgent crisis, but establishment politicians from both parties are failing to take action," the student debt group said in its statement.

Reuters

[Brazen]

Middle-aged flat sharing on the rise, excuse Daily Fail link. Thank gawd I started on the property ladder when I was about 12.

Tessa, 49, shares the flat with three other professionals - one man and two women, aged 52, 45 and 32. They all earn good salaries, but can't afford to buy, or even rent, alone.

http://www.dailymail.co.uk/femail/article-3314369/Middle-aged-having-share-flat-strangers-s-symptom-bonkers-property-market-high-earning-professional-women-living-like-students.html

[The Brain]

Students across US to march over debt, free public college

Thousands expected to attend Thursday events taking place at colleges and universities from Los Angeles to New York
November 12, 2015 7:20AM ET

Students were set to walk out of classrooms across the United States on Thursday to protest ballooning student loan debt for higher education and rally for tuition-free public colleges and a minimum wage hike for campus workers.

Saddled with debt that can sometimes run into the hundreds of thousands of dollars, many college graduates have struggled to make payments amid an ailing economy and job market.

The demonstrations are planned just two days after thousands of fast-food workers took to the streets in a nationwide day of action pushing for a $15-an-hour minimum wage and union rights for the industry.

Events for Thursday's protests, dubbed the Million Student March, have been planned at colleges and universities from Los Angeles to New York. Thousands of people signed up to attend on Facebook groups, though it remained to be seen how many would ultimately participate.

"Education should be free. The United States is the richest country in the world, yet students have to take on crippling debt in order to get a college education," the movement's organizers said in a statement on their website.

Organizers are demanding tuition-free public colleges, a cancellation of all student debt and a $15-an-hour minimum wage for campus workers.

The total volume of outstanding U.S. student loan debt has more than doubled to $1.2 trillion, according to the U.S. Consumer Financial Protection Bureau, compared with less than $600 billion in 2006.

The bureau said there are some 8 million private and federal loan borrowers in default, representing more than $110 billion, while millions more are finding it difficult to keep up with repayments.

Dealing with swiftly mounting student loan debt has been a focus of candidates vying for the White House in 2016.

Democratic hopeful Bernie Sanders has vowed to make tuition free at public universities and colleges, and has pledged to cut interest rates for student loans.

His rival Hillary Clinton has said she would increase access to tuition grants, let graduates refinance loans at lower interest rates and streamline income-based repayment plans.

Florida U.S. Senator Marco Rubio is the most prominent Republican candidate to lay out a concrete proposal, saying he would establish an income-based repayment system for federal student loans, and would simplify the application process for federal aid.

"This is clearly an urgent crisis, but establishment politicians from both parties are failing to take action," the student debt group said in its statement.

Reuters

In Sweden education is "free". It means that in many cases it's so bad that people wouldn't pay for it with their own money.

When Sweden discussed starting to charge foreign students there were people protesting "no, if we do this they won't come!", without taking a moment to let the full implication of what they were saying sink in.

[Tonitrus]

I am generally sympathetic to the idea of the government supported (not "free") college education.  But there would have to be standards/rules to it...not just a free ride to drunken frat parties and law degrees.  Which is probably what those demanding it would want. 

There would have to some kind of limit/guidelines and what type of degrees are supported (so we don't have University of Example pumping out nothing but sociology degrees), and perhaps even grade/academic requirements to qualify.  And definitely degree plans, to avoid "professional college students" being subsidized.

Hell, you could even make them do some kind of community/public service...along the same lines that gets us military folk a free education.

[garbon]

https://www.theguardian.com/education/2016/nov/16/uks-social-mobility-problem-holding-back-thatcher-generation-says-report

UK's social mobility problem holding back Thatcher generation, says report

Commission says those born in the 1980s are the first to not start their careers with higher incomes than their parents

The generation that grew up under Margaret Thatcher were the first to start with lower incomes than their parents and have endured an increasingly divided Britain, according to the government's social mobility commission.

Its annual "state of the nation" report published on Wednesday morning found that "Britain has a deep social mobility problem which is getting worse for an entire generation of young people".

According to the commission, established by David Cameron as prime minister, those born in the 1980s are the first cohort since the second world war to not start their careers with higher incomes than their parents and immediate predecessors.

"The rungs on the social mobility ladder are growing further apart," said Alan Milburn, the former Labour minister who heads the commission. "It is becoming harder for this generation of struggling families to move up.

"The impact is not just felt by the poorest in society but is also holding back whole tranches of middle- as well as low-income families – these treadmill families are running harder and harder but are standing still."

Milburn drew parallels with the worst-off areas in the country also voting most strongly for Britain to leave the EU.

"The public mood is sour and decision-makers have been far too slow to respond," Milburn said, calling for fundamental reforms to education, an active labour market and policies to aid regional economies.

He said Britain's social mobility problem should be "the holy grail of public policy".

He attacked the government's plans to open more grammar schools in England, saying it would not solve the problem of getting the best teachers into the schools that need them most.

The report concludes that expectations earlier in the 20th century that each generation would be better off than the last have not been borne out.

The barriers to social mobility include an "unfair" education system, unaffordable housing and a two-tier labour market divided between a prosperous middle class and those below on it on low-paid, intermittent or insecure employment.

The commission also found that home ownership was in sharp decline among the young as house prices rise, with the proportion of those under 44 owning their own home having fallen by 17% in the space of 10 years.

Susan Kramer, the Liberal Democrats shadow Treasury minister, said the report was "shocking" in its implications for young people's life chances.

"We cannot go on reducing spending on the things young people need without doing serious damage to our society," she said.
"Yet instead of supporting the next generation, the government's priority is bringing back the deeply divisive 11-plus [grammar school exams], while failing to invest in housing, education and sustainable jobs of the future."

[CountDeMoney]

Nobody cares, man.

[garbon]

Clearly I did.