2016-03-29

Culture and Currency: Hold Gold to Avoid Collapse

Many (most?) American universities exist to hand out pieces of paper which are supposed to be tickets to lucrative careers. Many students find otherwise, with a massive debt that in no way matches the earning power of their degree. Universities do not work to increase the value of the degree, instead they churn out more paper at a higher rate. The price of any fiat currency, in this case the currency of credentialism, eventually returns to the intrinsic value of the paper itself. If you are a business selling rapidly depreciating paper and in competition with other businesses selling the same product, you have two optimal strategies. One is to defect and begin selling a high quality product that cannot be replicated. The other is to sell as much paper as possible, no matter how much it debases the value, for as much money as possible before the whole thing collapses.

Reuters: As SAT was hit by security breaches, College Board went ahead with tests that had leaked
Thanks to the booklet, Ding said he already knew the answers to about half of the critical reading section of the SAT when he took the test in Hong Kong in December 2013.

“I felt really lucky,” Ding said.

His score on that section? A perfect 800, he said.

Ding’s advance look at material from the test he took was no fluke. His cram school is part of a vibrant Asian industry that systematically exploits security shortcomings in the SAT. Chief among them is a vulnerability created by the owner of the exam: the routine practice of reusing material from tests that already have been given.
There was a cartoon in my Chinese econ textbook back in the day. A restaurant customer is buying a bottle of XO Cognac with cash. Both customer and waiter are laughing because the money is counterfeit and the cognac is fake. Both were also happy because they only cared about the superficial value of the good. In this case, American universities are taking real cash from wealthy students able to pay the full tuition, and won't let a pesky thing like an entrance exam (and later academic standards for handing out degrees) get in the way.
A confidential PowerPoint presentation reveals that College Board officials had documented widespread security problems in June 2013, shortly after canceling a sitting of the SAT in South Korea. The PowerPoint, reviewed by Reuters, shows that half of the SATs in inventory at the time had been “compromised” – the College Board’s term to describe exams whose contents have leaked, in whole or in part, outside the organization. Four of the exams had been compromised by an unnamed “Chinese website.”
Uh oh. Sounds like the SAT might cut off the universities' gravy train.
The new exam leaves in place a fundamental weakness plaguing the old one: the recycling of test material. The practice will continue with the new SAT, the College Board told Reuters. And that reuse of test material has proved to be a major security hole.
Crisis averted.
Security breaches abroad are increasingly significant for U.S. higher education because schools are allocating more seats than ever to foreign students. About a third of the 761,000 degree-seeking foreign students in America come from China, according to the Institute of International Education. Overseas students are especially attractive because most don’t qualify for financial aid and thus pay full price. Chinese students spent almost $10 billion on tuition and other goods and services in America in 2014, Department of Commerce statistics show.
That paragraph needs a small edit:
Security breaches abroad are increasingly significant lucrative for U.S. higher education because schools are allocating more seats than ever to foreign students. About a third of the 761,000 degree-seeking foreign students in America come from China, according to the Institute of International Education. Overseas students are especially attractive because most don’t qualify for financial aid and thus pay full price. Chinese students spent almost $10 billion on tuition and other goods and services in America in 2014, Department of Commerce statistics show.
Fake degrees are a major U.S. export. If 250,000 Chinese students are paying $10 billion a year, American can close its trade gap by bringing in 9 million Chinese students each year.
Evidence that some foreign applicants are displacing Americans because of an unfair advantage on the SAT could add to a backlash against standardized testing in college admissions.
Sort of like the backlash currently taking place in the Democrat and Republican presidential campaign.

The above is a small slice of an in-depth report from Reuters. Well worth reading the whole thing.

In Germany, the leaders threw out German concepts of equality without batting an eye, opting instead for Shariah law compliant trains. German train operator begins women only carriages over fears of migrant attacks
A German train company will start operating women-only carriages, a move which has been met with controversy.

Several reports suggest that the new carriages, for women and women travelling with children, are a response to the sex-attacks in Cologne on New Years Eve, which was largely blamed on migrants.

Regiobahn line announced this week that the women-only carriages will be available for passengers travelling between Leipzig and Chemnitz.

If the Germans will not defend their value of equality, will they defend the value of their euro? If the Americans will not defend the integrity of their education system, will they defend the integrity of the U.S. dollar?

The money in everyone's bank account has value only because people believe it has value. Most money isn't even printed anymore, it lacks basic intrinsic value as toilet paper, firewood or building blocks for children. If the public lose trust in the leadership, in the values of society, in the key institutions, the currency will not be far behind.

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