April 16, 2025 • 25 mins
Columbia University Senior Research Scholar and Professor Edward Fishman on US credibility and how that is affecting its stance in the midst of a global trade war. Plus, Bloomberg News Higher-Education Finance Reporter Janet Lorin on Harvard's fight with the Trump administration and Jillian Berman on her book, "Sunk Cost, Who’s to Blame for the Nation’s Broken Student Loan System and How to Fix It"
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
This is Bloomberg business Week Daily reporting from the magazine
that helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business finance
and tech news as it happens. The Bloomberg Business Weekdaily
Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 1 (00:32):
Obviously, as we kicked off our hour, we talked about
how there's a lot still continuing to come at investors
when it comes to trade and tariffs.
Speaker 3 (00:39):
The tit for tat.
Speaker 1 (00:40):
You've got the EU and US not making much progress
when it comes to their trade differences. China has stopped
taking orders when it comes to deliveries of Boeing jets.
The Trump administration has inherited some has initiated, i should say,
some trade probes when it comes to semiconductors and pharma imports.
The trade flow continues and the tariffs continue or seem
(01:01):
to be. So, we wanted to once again check in
with Edward Fishman. He's senior research scholar professor at Columbia
University School of International and Public Affairs. We recently talked
with him about his new book, Choke Points, American Power
in the Age of Economic Warfare, and he is back
here in our studio. It is good to have you
here because as this continues to go on, the longer
(01:22):
it goes on, we continue to think about what are
the economic repercussions that could be the future of the US.
How are you thinking about that? How is it kind
of evolving the longer this goes on.
Speaker 4 (01:32):
Yeah, well, first of all, thanks for having me back on, Carol.
So look, a big theme of my book, Choke Points
is that there are these choke points in the global economy,
areas where one country has a dominant position and there
are few, if any substitutes, and these choke points have
been what have been primarily used for economic warfare. The
dollar and the US financial system is the most important
(01:53):
choke point in the global economy and the one that
America has relied on for sanctions against Iran Russia. And
the thing that has been because by.
Speaker 1 (02:00):
Everything being dollar denominated, that means in order to transact, right,
it's got to go through dollars, and basically we have
control over our dollar denominated assets in those points throughout
the financial system.
Speaker 4 (02:12):
That's right, I mean, I think if you just look
at it from a numbers basis, I mean, America is
something like ten percent of global trade, and ninety percent
of foreign exchange transactions involves a dollar, So the dollars
being used in transactions that have nothing to do with
US goods being traded from one country to another. So
I think the thing that has been most concerning to me,
frankly over the last week or two of when Trump
(02:33):
has really escalated the use of tarifs is we have seen,
I think, for the first time, at least in my
professional life, real concerns that the dollar may be losing
some of its safe haven status. And this obviously is
concerning from the perspective that we all understand in terms
of the dollar's role as the world's reserve currency is
necessary for the way that we run our political economy,
the way that we fund budget depth sits. But I
think also from a geopolitical perspective, there are concerns that
(02:56):
if we were to undermine the dollar's role in the
international financial system, it would significantly constrain the ability of
the US government to impose impactful sanctions on foreign countries.
Speaker 5 (03:06):
The impactful sanctions is certainly one part of this, But
the other part of this is the global economic world order,
or the economic world order, I should say, and just
the fact that the US and the dollar have really
stood at the intersection of so much. When you talk
about that being at risk, what exactly do you mean,
what in your view could happen?
Speaker 4 (03:27):
Right, So, what would it mean for the dollar to
lose its position as the world's reserve currency. I think
at the very baseline level of it, the dollar by
virtue of basically there being limitless demand for American treasuries.
We have not had to balance our budget in decades, right,
so I think we're the dollar actually to just be
another currency, and US treasuries just to be another form
(03:47):
of sovereign debt.
Speaker 5 (03:48):
We'd actually have to worry about.
Speaker 4 (03:49):
Things like what does our fiscal situation look like in
the United States?
Speaker 1 (03:53):
Explain that, carry that out for people who and be like,
I'm not making the connection because I think so much
of what's happening in the last week and a half,
we have to understand how this all connects, right, because
I think people I don't know just walk it through
for us.
Speaker 4 (04:05):
Sure, yeah, so right now we run deficits of budget
deficits every year. It's something like seven percent of goal
of GDP, which is significantly higher than it has been historically.
What that means is we take in less revenue than
we spend as a federal government.
Speaker 3 (04:19):
Right.
Speaker 5 (04:19):
The way that we plug that deficit.
Speaker 4 (04:21):
The way that we finance the spending that doesn't come
from American taxpayers is through issuing debt that then is
in the form of US treasuries.
Speaker 6 (04:30):
Right.
Speaker 4 (04:30):
Part of the reason that there's effectively limitless demand for
US treasuries is because of the dollar's role as the
world's reserve currency, because it's considered this safe asset that
in any time of need, basically you can always turn
it into cash at a relatively stable level. But what
we've seen in the last week is something that's quite unusual,
where treasure yields have gone up as the dollar's value
(04:51):
has actually weakened. As normally, you'd expect as treasure yields
go up that the dollar would strengthen because there'd be
more demand for American assets. What this suggests is that
there's something going on that there might be this new
risk premium being built in to American assets that hasn't
existed before the.
Speaker 5 (05:06):
New risk premium. Notwithstanding, what would you say to somebody
who's listening right now or watching right now and says,
wait a second, this would be could be a good
thing for the United States to start only spending the
money that it has every year. It's a fair point.
Speaker 4 (05:20):
At the same time, it would require a massive change
in how all of our lives work, right, because the
lion's share of American federal outlays every year are in
things like Medicare, Social Security entitlement programs that Americans rely on.
Speaker 5 (05:33):
Yeah, I think Elon Musk has brought that to attention
many times over the last couple of months when talking Doge.
Speaker 4 (05:38):
Right, although that has not been a focus of dose
Right's anything. You've seen expansion in things like Medicare advantage
payments right, That has been covered in another Bloomberg media recently. So, Look,
I think that we would have to have a substantial
cut in government spending and, by the way, a concomitant
rise in taxes. But I think there's a broader point
that's more near term, because there are people in the
(05:59):
Trump administration orbit who actually view the dollar's role as
the world's reserve currency as bad for the US economy,
not an exorbitant privilege, but something that undermines our export
competitiveness because just to spell this out and sort of plan.
Speaker 3 (06:11):
It's more expensive exactly right.
Speaker 4 (06:14):
But what we're seeing is that, yes, if a dollar
is valued at a lower level, then there will be
specific sectors of the American economy that may be more
competitive on global markets.
Speaker 5 (06:24):
Right.
Speaker 4 (06:25):
But everyone is hurt by a weeker dollar because also
all of us in the United States are paid in dollars.
So if our dollars are less valuable, we have lower
purchasing power and we are poor, right, we are paychecks
go less, they don't buy as.
Speaker 3 (06:40):
Much for us.
Speaker 1 (06:41):
Isn't it allso important to talk about trade deficits. Everybody
thinks bad, bad trade deficit, but that that also has
implications as well in terms of demand.
Speaker 3 (06:49):
For dollars, right, And it also.
Speaker 1 (06:53):
We want to be buying things because that gives people
dollars and can buy US based assets. Right, there's like
this relationship as well.
Speaker 4 (07:04):
That's right, yeah, I mean the flip side of a
trade deficit is that we have you know, financial assets
financing that's coming into the United States, right. We have
other countries who are investing in American assets. Right, So
that is you know why you need you know, the
current account and the capital account have to balance, so
current a current account deficit will mean a capital account surplus, right.
(07:25):
So that's right. I think if you truly were able
to balance American trade, you would by definition have less
capital coming into the United States.
Speaker 7 (07:34):
Can I also ask you we have don't we have
a service surplus?
Speaker 6 (07:37):
We do?
Speaker 5 (07:38):
Yes?
Speaker 7 (07:38):
And is that a good or bad thing?
Speaker 4 (07:40):
I think it's a great thing. I mean, look, I
think there's been this, you know, you know memes now
about should Americans be you know, screwing in screws in
iPhones or something like that. Right, I think most Americans frankly,
would rather work a services job for the same pay
than working in a factory.
Speaker 5 (07:56):
Well, that was the whole idea with globalization in the
nineteen nine if you go back, and that was sort
of the promise that we were told by politicians, let's
move the jobs to other countries, and what we'll do
is we'll retrain the workforce here so they can do
more service oriented jobs and jobs that are in a
(08:18):
different part of the economy. That didn't end up happening.
Speaker 4 (08:22):
Well, I mean to be fair. Up until recently, we've
been at full employment, so we haven't had massive unemployment
in the United States.
Speaker 5 (08:29):
True. But I mean, if you go back even to
the first Trump administration and the analysis of why he
won states and why Democrats lost in a lot of
these areas, there was a lot of criticism that these
were areas that had been hollowed out with the loss
of jobs moving abroad. And that seems to be still
what the President is speaking to at this point, to
(08:50):
go back to an era where those manufacturing jobs come back.
Speaker 4 (08:55):
Yes, Look, I think that clearly there have been regional
effects that have not been distributed equally, and there are
parts of for instance, my home state of Pennsylvania that
have been really hit hard by this process, right, And
so I do think that the federal government has not
done a particularly good job at figuring out how to,
you know, continue to provide a decent standard of living
(09:15):
for people in these regions of the United States. But
I would say, though, and if we're going to take
Trump's arguments about manufacturing seriously, I think the best argument
isn't so much about unemployment, because, as we've discussed, we
have been at full employment. There is a lot of
sector service sector employment in the United States.
Speaker 2 (09:30):
Right.
Speaker 4 (09:30):
The best argument is really the national security argument, where
there are potentially some aspects of manufacturing where you would
want domestic sources. Right. And by the way, even Joe Biden,
going back to his presidency, imposed one hundred percent tariffs
on Chinese electric vehicles because there was a view that
we didn't want buid to eat Tesla's lunch. Right, We
(09:50):
didn't want Chinese evs that were better, more efficient, cheaper
than you know, the evs made by Tesla and GM
to come in and swamp the American market because it's
a security concern if we're dependent on Chinese cars, right.
So I think there are specific sectors where this is
this is a relevant point for national security.
Speaker 1 (10:08):
The harder I mean, we have defense manufacturers for really exactly, I.
Speaker 4 (10:12):
Agree, And I've written an essay in the Boston Globe
a month ago in association with my book Choke Points
about the pharmaceutical supply chain. This is something that certainly
the United States needs not only more domestic sources of manufacturing,
but what I would call trusted supply chains.
Speaker 6 (10:28):
Right.
Speaker 4 (10:28):
You don't want to be reliant on China for you know,
pharmaceutical additives. Right, do we want to do everything domestically?
Do we want autarchy?
Speaker 5 (10:35):
I don't think so.
Speaker 4 (10:36):
But do we want to be less reliant on adversaries
like China? I think that's a very worthy national security goal.
Speaker 1 (10:42):
So, going back to your book book Choke Points, I'm
thinking about China and how they are wielding kind of
their points. I thought about the tariffs and the kind
of salvel that they lobbied back at the United States
when it comes to rare earth minerals like that is
very targeted and many would say very very, very smart
because of their incredible control over It's not that we
(11:03):
don't have it, but they are set up in a
much more productive system, right in terms of refining and
so on and so forth.
Speaker 3 (11:09):
Walk us through that and how they are fighting back.
Speaker 4 (11:12):
Yes, thank you for bringing this up, Carol, because I
think one of the things I've been most frustrated about
in terms of the coverage of the US China situation
in the last week is this discussion of a trade war. Right,
We're not seeing a trade war. We're seeing something much broader.
We're seeing a multi domain economic war in which tariffs
are just one weapon that's being used, and in fact,
they're not even the most powerful weapon.
Speaker 3 (11:31):
Yeah.
Speaker 4 (11:32):
You look at how China's retaliating.
Speaker 8 (11:33):
Right.
Speaker 4 (11:34):
Yes, they have tariffs that they put on American imports.
But if you're just going tariff for tariff, America has
more to tariff than China has to tariff because we're
importing a lot more from China than than they're importing
from US. But what China has been doing since twenty eighteen,
since the first salvo of tariffs came into place, they've
been preparing things like export controls on critical minerals that
America relies on, from everything from batteries to ammunition.
Speaker 8 (11:57):
Right.
Speaker 4 (11:57):
They've been sanctioning US companies, So pH got sanctioned. Recently
a Skidio, the biggest drone manufacturer in silicon value, was sanctioned,
and now they've got a ration batteries. Each customer now
only gets one battery per drone, right, which is pretty
absurd when you think about it. Yeah, Alumina, the big
DNA sequencing company, got sanctioned by China. You're also seeing
things like anti monopoly investigations into Nvidia and Alphabet Right,
(12:19):
So China is not retaliating in sort of a symmetric manner,
only they're also fighting asymmetrically.
Speaker 1 (12:26):
Yeah, great stuff, Thank you so much, so I appreciate
that you could come in. Edward Fischman, Senior research scholar
and professor atpat Columbia. His book is Choke Point American
Power in the Age of Economic Welfare.
Speaker 3 (12:37):
This is Bloomberg Business Weekdaily.
Speaker 2 (12:40):
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Speaker 5 (12:53):
We are going all in on higher education right now
because there is a lot happening when it comes to
Washington and elite colleges and university's. President Trump escalating his
administration's fight with Harvard by threatening its tax exempt status
after the school defied the government's demands to change its
policies in exchange for billions of dollars in federal funding. Also,
that's not all. You'll recall that a bit less than
(13:15):
a month ago, the President said that the Education Department's
one point six trillion dollars student loan portfolio would be
handled by the SBA. That move coming amid worries that
his efforts to overhaul the federal government could reduce programs
and services. So we've got a great pair of voices
to talk about hire at. Janet Lauren is higher education
finance reporter for Bloomberg News. Jillian Berman is here too.
(13:35):
She's assistant managing editor for News and Enterprise at market Watch.
She's also the author of a brand new book, It's
out Now, Sunk Cost, Who's to blame for the nation's
broken student loan system? And how to fix it? They
both join us here in the Bloomberg Interactive Brokers studio. Janete,
do you want to start with you and Harvard? Because
I think it's fair to say shots fired, Yes, for sure.
Speaker 6 (13:57):
Yesterday Harvard released a letter that was sent to it
last Friday by the government by a multitask force, multi
agency task force, sort of stepping up their demands if
they want to continue their flow of billions of dollars
in federal research funding. They released that letter, along with
one from two law firms, saying they were not going
to accept their demands and said there were certain lines
(14:20):
that they could not cross in terms of academic freedom.
They had a whole list of things such as the
government wanted curbs on doing things and admissions and governance
and hiring and lots of things. And they said no,
And a couple of hours later, the federal government said,
we're freezing two point two billion dollars in loans.
Speaker 3 (14:44):
I'm sorry in grants. It's a big deal.
Speaker 6 (14:47):
It's a big deal, and it's a lot of money.
And you say, well, but they have a fifty three
billion dollar endowment. Why can't they spend it. Well, seventy
percent of it is restricted and it isn't a bank account.
But certainly, you know they have some liquidity. You know,
they have a one point five billion dollar line of credit.
We saw last week they issued bonds of seven hundred
(15:10):
and fifty million dollars. But it is a lot of
money because eleven percent of their entire budget comes from
the federal government in these research grants.
Speaker 1 (15:18):
I got to say, when we talk higher education, there's
just a lot of money either way you look at
and now someone like Harvard has a huge endowment, which
gives it an incredible cushion. Having said that, I want
to pull out a little bit and talk about the
money that is in higher education. We all remember is
it ten fifteen years ago. That headline that came across
that said college debt was higher than credit card debt,
(15:41):
and we all stopped and be like, how did we
get here? Jillian, come on in on that starry story.
This is what you get into because I think we
spend so much time. How did we get to this point?
Speaker 3 (15:50):
How did we?
Speaker 5 (15:51):
Yeah?
Speaker 8 (15:51):
So, you know, there are several different factors, but that
headline you talked talked about really came in the wake
of the Great Recession, and that was a huge moment
for the explosion of student debt. We saw states pull
back from funding their public colleges, which means students and
families had to take on more of that funding. Obviously,
families didn't have as much money to tap themselves or
equity in their homes. And then also because of the
(16:14):
you know, the sort of loose labor market, students who
graduated with this debt had trouble finding jobs that could
help them repay it. So the Great Recession was, you know,
sort of a really big moment for student debts.
Speaker 5 (16:24):
It's a unique problem to the US though, and this
is something that doesn't happen in other countries. But at
the same time, we also have the best one could
say we have among the best universities in the world.
Not every one of them, but certainly these are institutions
that are recognized internationally. What is so different about the
(16:45):
US system that allows something like this to happen.
Speaker 8 (16:47):
Yeah, So the way that we fund colleges in the
US is largely through students, so you know, it's sort
of like a voucher. The student decides where they want
to take that government money. And a lot of other
countries where you know, we think about having little student debt,
the government is doing more direct funding of the schools themselves.
And you know that design of the system here in
(17:08):
the US that was on purpose. We like to have
you know, what we call like diversity of institutions and
you know, sort of the ability for the market to
play out.
Speaker 6 (17:18):
So in the Trump administration has said they're interested in,
of course, shutting down the Education Department, which after two
thousand and nine began dispersing the loans and now we're
at a huge amount. I think it would be the
fifth largest US bank in America is moving it away
from the Education Department to another agency. Trump has a
(17:40):
Small Business SBA. Would that be reasonable.
Speaker 8 (17:44):
It depends who you ask. I think, you know, the way.
There hasn't been much detail, first of all about that plan,
but I think the way that they envision it is,
you know, maybe moving some of the staff at the
Department of Education that handles this stuff over to SBA.
Even still, I think people who work on these things
are are worried that it could cause a lot of disruption.
We already have some evidence that the staff cuts have
(18:07):
caused disruption for borrowers and for students as they try
to access those funds. So I think it could post
some challenges.
Speaker 5 (18:13):
You know, I kind of approach this differently now that
I have kids, because now I need to save for college.
I'm going to.
Speaker 3 (18:19):
Cost you a million dollars a year.
Speaker 5 (18:21):
Well that's just good wondering. Everybody's sitting around here does
have to think about it. Funny but not funny. Well
you're done, I know, I know you're not done yet.
Speaker 1 (18:30):
No, I'm not done yet, because there's you know, it's
we're also an environment where it's like okay, now we
get the masters.
Speaker 5 (18:36):
You know, I was in college it was like okay,
twenty in the twenties to thirty thousand, dollars per year.
Now we're at what, Carol.
Speaker 6 (18:42):
Sixty seventy eighty Yeah, ind right, everything all in right,
total cost of attendance.
Speaker 5 (18:48):
Yeah, you know, I was thinking then it couldn't get
any more expensive, Jillian, but that obviously wasn't the case.
The system has to break at some point.
Speaker 8 (18:55):
No, yeah, I mean people keep saying that, and we'll see.
I think that some of the disruption, you know, caused
by the cuts at the Department of Education, may you know,
push some things in another direction. Also, you know a
lot of people have done some reporting on how gen
z is really less interested in college and so you
know that could put some enrollment pressure on these schools
(19:16):
and force them to bring down the cost.
Speaker 1 (19:18):
How much fault do you put at universities and colleges
where the price just teems to go up and up
and up, and they're like, we've got to pay because
it's for teachers, it's for facilities, xyzts like how much
it has outpaced inflation many times over?
Speaker 8 (19:32):
Yeah, I mean, I think the argument that I take
in the book is that in a lot of cases,
the colleges are sort of like responding to incentives created
by the system. So I mean, one big example is
if you talk about graduate school. In the mid two thousands,
the government allowed for people to start borrowing up to
the cost of attendance for graduate school, and then kind
of shortly after that, the number of master's degree programs
(19:54):
exploded at universities.
Speaker 7 (19:56):
And there's a financial like pipeline.
Speaker 5 (19:59):
Right exactly.
Speaker 8 (20:00):
So yeah, and at the time, like even Republican lawmakers
you know, didn't really think that much about the consequences
of that decision, you know, and if you were to
ask them now that that would be a no go.
Speaker 3 (20:10):
What about loan limits?
Speaker 6 (20:11):
Are those those who've been talked about. Certainly they're in
place for undergraduates, but for for graduates students instead of
up to the cost of attendance, What do you think
would happen there?
Speaker 8 (20:22):
So that I think, you know, some congressional Republicans are
interested in doing something like that, you know, I think
in a lot of ways it makes sense.
Speaker 3 (20:29):
And then you know, of.
Speaker 8 (20:30):
Course there's other people who will tell you, well, if
that happens, then you're going to be sending people to
the private market, where you know, often they're fear of protection.
So it's like a tricky, tricky balance or not as
many will go to school, right, or not as many
we'll go to school.
Speaker 7 (20:42):
Which which some have argued.
Speaker 1 (20:43):
You know, we all laugh about it, but it's not funny.
But you know, you'd need a plumber, an electrician or
somebody in the construction industry. There's like, you're fighting for
these people, and they all talk about it that there's
nobody there to do these things. And whether or not
we go back to trades people, you know, that's another argument.
Speaker 8 (20:58):
Right right exactly.
Speaker 5 (20:59):
Yeah, So, Jillian, we talk about this in the context
of what's happening in Washington right now, and a lot
has changed in this administration, and I we're at a
point where I think it's fair to say that the
Trump administration is in a combative stance with colleges and
universities right now. How do you look at what's happening
in Washington is really reshaping higher education in the US?
Speaker 8 (21:22):
Yeah, I mean, I think, you know, part of the
reason that there's been some political will for the kind
of stuff that the Trump administration is doing is because
of questions around the value of higher ed. You know,
if people thought that they were getting their money's worth,
it would be harder to attack these institutions, So, you know,
I think it will raise some questions about you know,
about that going forward.
Speaker 5 (21:43):
In your view, Janet, is it realistic to think that
in an institution like Harvard, for example, could lose its
tax exempt status.
Speaker 6 (21:51):
It's hard to predict anything these days.
Speaker 3 (21:54):
But what it do do an institution like Harvard?
Speaker 6 (21:56):
So Harvard doesn't pay property taxes, I mean unless it's
a business expense, like if they run a parking garage,
they would pay taxes. They're able to issue tax exempt bonds.
They do pay an endownment tex As of twenty seventeen,
their donors get a tax break. If you give money
to Harvard, you get a tax break. So there's a
lot of things and especially going to the bond market.
Speaker 3 (22:19):
They just had.
Speaker 6 (22:19):
Taxable debt, but they do have the ability to have.
Speaker 3 (22:22):
Not tax exempt debt.
Speaker 1 (22:26):
So, Jillian, where do you see this going right? Because
it just feels like the velocity continues, the debt continues
to grow, it continues to be a story we you know,
talk about it, and it really is difficult on a
younger generation who want to buy homes perhaps and have families,
but they're stuck paying off their college loans and that
has an economic impact.
Speaker 8 (22:45):
Unfortunately, you know, it seems like we may be stuck
in the pattern that we're in for a while. You know,
there's not a lot of political will to change the system.
The people who have the power to do it really
are Congress and you know, part of the reason why
we've had so so many changes in policy and borrowers
experienced so much whiplashes because the executive branch has tried
to do it, but you know, they only have so
(23:07):
much power, so it just gets reversed for the next time.
Speaker 1 (23:09):
Do you anticipate that more kids might go outside the
United States for college and that that could at some
point have an impact?
Speaker 6 (23:15):
Oh?
Speaker 3 (23:15):
Interesting, I you know, I don't know.
Speaker 8 (23:16):
That's definitely often abdocated as a as a cheaper option,
So we'll see.
Speaker 3 (23:20):
Yeah.
Speaker 5 (23:20):
You know, it's talking though to somebody recently, and even
the schools outside the US are even that much less expensive.
Speaker 6 (23:26):
I say, then you've got to pay for them to
get overseas a plane ticket.
Speaker 5 (23:31):
Yeah, sounds like you've been thinking about this. Janet, Hey, Jillian,
before we let you go, you know, if we're talking
in five years, uh, do you think this problem will
have gotten better gotten worse.
Speaker 3 (23:40):
Well, it'll be some cost. Part two.
Speaker 8 (23:42):
I think maybe unfortunately the way it's looking not better.
Speaker 5 (23:46):
Necessarily classes not have full in any way.
Speaker 8 (23:50):
I mean, I guess you know, you know what, there
have been some states that have you know, really tried
to invest more in helping their residents go to college.
And we actually have seen evidence that the cost of
public college on averages going down a little bit. So
it's unclear if that tren's going to continue, but maybe
it will.
Speaker 1 (24:06):
I remember was it Bloomberg who did the survey and
they said or was it Jared Dillion?
Speaker 3 (24:12):
I don't know, it was either.
Speaker 1 (24:13):
Like it unless it's Harvard or an IVY league that
state schools increasing year.
Speaker 5 (24:18):
That's Jared's view.
Speaker 7 (24:19):
Basically, you get more bang for your buck in terms
of but I thought we did.
Speaker 8 (24:22):
Some research to Yeah, I think you guys, Yeah, had
a great piece about right, sort of the value of
a lot of different public lis.
Speaker 1 (24:28):
ROI the return on investment, right and in terms of
like so maybe you know, people start to think more closely.
Speaker 5 (24:34):
Yeah, it's fascinating.
Speaker 1 (24:35):
I can't tell you how many times it comes up.
And whenever we have anybody right from a college it's like.
Speaker 3 (24:39):
Why does it cost so much?
Speaker 6 (24:41):
They don't always have a great answer.
Speaker 3 (24:43):
Yeah, that's true.
Speaker 1 (24:44):
Yeah, good stuff, Jillian, Thank you so much.
Speaker 3 (24:47):
Good luck with the book. Thank you.
Speaker 1 (24:48):
Jillian Bourman, author, market Watch, Assistant Managing editor, News and Enterprise,
her new book, Sunk Cost, Who's to blame for the
Nation's broken student loan system and How to fix it?
Speaker 3 (24:58):
How long have we been talking about this? A long time?
Speaker 5 (25:01):
I mean my entire career.
Speaker 3 (25:02):
Unbelievable.
Speaker 1 (25:03):
This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 2 (25:12):
Listen live weekday afternoons from two to five pm Eastern
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Speaker 1 (25:21):
You can also watch us live every weekday on YouTube
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Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
This is Bloomberg business Week Daily reporting from the magazine
that helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business finance
and tech news as it happens. The Bloomberg Business Weekdaily
Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 1 (00:32):
Obviously, as we kicked off our hour, we talked about
how there's a lot still continuing to come at investors
when it comes to trade and tariffs.
Speaker 3 (00:39):
The tit for tat.
Speaker 1 (00:40):
You've got the EU and US not making much progress
when it comes to their trade differences. China has stopped
taking orders when it comes to deliveries of Boeing jets.
The Trump administration has inherited some has initiated, i should say,
some trade probes when it comes to semiconductors and pharma imports.
The trade flow continues and the tariffs continue or seem
(01:01):
to be. So, we wanted to once again check in
with Edward Fishman. He's senior research scholar professor at Columbia
University School of International and Public Affairs. We recently talked
with him about his new book, Choke Points, American Power
in the Age of Economic Warfare, and he is back
here in our studio. It is good to have you
here because as this continues to go on, the longer
(01:22):
it goes on, we continue to think about what are
the economic repercussions that could be the future of the US.
How are you thinking about that? How is it kind
of evolving the longer this goes on.
Speaker 4 (01:32):
Yeah, well, first of all, thanks for having me back on, Carol.
So look, a big theme of my book, Choke Points
is that there are these choke points in the global economy,
areas where one country has a dominant position and there
are few, if any substitutes, and these choke points have
been what have been primarily used for economic warfare. The
dollar and the US financial system is the most important
(01:53):
choke point in the global economy and the one that
America has relied on for sanctions against Iran Russia. And
the thing that has been because by.
Speaker 1 (02:00):
Everything being dollar denominated, that means in order to transact, right,
it's got to go through dollars, and basically we have
control over our dollar denominated assets in those points throughout
the financial system.
Speaker 4 (02:12):
That's right, I mean, I think if you just look
at it from a numbers basis, I mean, America is
something like ten percent of global trade, and ninety percent
of foreign exchange transactions involves a dollar, So the dollars
being used in transactions that have nothing to do with
US goods being traded from one country to another. So
I think the thing that has been most concerning to me,
frankly over the last week or two of when Trump
(02:33):
has really escalated the use of tarifs is we have seen,
I think, for the first time, at least in my
professional life, real concerns that the dollar may be losing
some of its safe haven status. And this obviously is
concerning from the perspective that we all understand in terms
of the dollar's role as the world's reserve currency is
necessary for the way that we run our political economy,
the way that we fund budget depth sits. But I
think also from a geopolitical perspective, there are concerns that
(02:56):
if we were to undermine the dollar's role in the
international financial system, it would significantly constrain the ability of
the US government to impose impactful sanctions on foreign countries.
Speaker 5 (03:06):
The impactful sanctions is certainly one part of this, But
the other part of this is the global economic world order,
or the economic world order, I should say, and just
the fact that the US and the dollar have really
stood at the intersection of so much. When you talk
about that being at risk, what exactly do you mean,
what in your view could happen?
Speaker 4 (03:27):
Right, So, what would it mean for the dollar to
lose its position as the world's reserve currency. I think
at the very baseline level of it, the dollar by
virtue of basically there being limitless demand for American treasuries.
We have not had to balance our budget in decades, right,
so I think we're the dollar actually to just be
another currency, and US treasuries just to be another form
(03:47):
of sovereign debt.
Speaker 5 (03:48):
We'd actually have to worry about.
Speaker 4 (03:49):
Things like what does our fiscal situation look like in
the United States?
Speaker 1 (03:53):
Explain that, carry that out for people who and be like,
I'm not making the connection because I think so much
of what's happening in the last week and a half,
we have to understand how this all connects, right, because
I think people I don't know just walk it through
for us.
Speaker 4 (04:05):
Sure, yeah, so right now we run deficits of budget
deficits every year. It's something like seven percent of goal
of GDP, which is significantly higher than it has been historically.
What that means is we take in less revenue than
we spend as a federal government.
Speaker 3 (04:19):
Right.
Speaker 5 (04:19):
The way that we plug that deficit.
Speaker 4 (04:21):
The way that we finance the spending that doesn't come
from American taxpayers is through issuing debt that then is
in the form of US treasuries.
Speaker 6 (04:30):
Right.
Speaker 4 (04:30):
Part of the reason that there's effectively limitless demand for
US treasuries is because of the dollar's role as the
world's reserve currency, because it's considered this safe asset that
in any time of need, basically you can always turn
it into cash at a relatively stable level. But what
we've seen in the last week is something that's quite unusual,
where treasure yields have gone up as the dollar's value
(04:51):
has actually weakened. As normally, you'd expect as treasure yields
go up that the dollar would strengthen because there'd be
more demand for American assets. What this suggests is that
there's something going on that there might be this new
risk premium being built in to American assets that hasn't
existed before the.
Speaker 5 (05:06):
New risk premium. Notwithstanding, what would you say to somebody
who's listening right now or watching right now and says,
wait a second, this would be could be a good
thing for the United States to start only spending the
money that it has every year. It's a fair point.
Speaker 4 (05:20):
At the same time, it would require a massive change
in how all of our lives work, right, because the
lion's share of American federal outlays every year are in
things like Medicare, Social Security entitlement programs that Americans rely on.
Speaker 5 (05:33):
Yeah, I think Elon Musk has brought that to attention
many times over the last couple of months when talking Doge.
Speaker 4 (05:38):
Right, although that has not been a focus of dose
Right's anything. You've seen expansion in things like Medicare advantage
payments right, That has been covered in another Bloomberg media recently. So, Look,
I think that we would have to have a substantial
cut in government spending and, by the way, a concomitant
rise in taxes. But I think there's a broader point
that's more near term, because there are people in the
(05:59):
Trump administration orbit who actually view the dollar's role as
the world's reserve currency as bad for the US economy,
not an exorbitant privilege, but something that undermines our export
competitiveness because just to spell this out and sort of plan.
Speaker 3 (06:11):
It's more expensive exactly right.
Speaker 4 (06:14):
But what we're seeing is that, yes, if a dollar
is valued at a lower level, then there will be
specific sectors of the American economy that may be more
competitive on global markets.
Speaker 5 (06:24):
Right.
Speaker 4 (06:25):
But everyone is hurt by a weeker dollar because also
all of us in the United States are paid in dollars.
So if our dollars are less valuable, we have lower
purchasing power and we are poor, right, we are paychecks
go less, they don't buy as.
Speaker 3 (06:40):
Much for us.
Speaker 1 (06:41):
Isn't it allso important to talk about trade deficits. Everybody
thinks bad, bad trade deficit, but that that also has
implications as well in terms of demand.
Speaker 3 (06:49):
For dollars, right, And it also.
Speaker 1 (06:53):
We want to be buying things because that gives people
dollars and can buy US based assets. Right, there's like
this relationship as well.
Speaker 4 (07:04):
That's right, yeah, I mean the flip side of a
trade deficit is that we have you know, financial assets
financing that's coming into the United States, right. We have
other countries who are investing in American assets. Right, So
that is you know why you need you know, the
current account and the capital account have to balance, so
current a current account deficit will mean a capital account surplus, right.
(07:25):
So that's right. I think if you truly were able
to balance American trade, you would by definition have less
capital coming into the United States.
Speaker 7 (07:34):
Can I also ask you we have don't we have
a service surplus?
Speaker 6 (07:37):
We do?
Speaker 5 (07:38):
Yes?
Speaker 7 (07:38):
And is that a good or bad thing?
Speaker 4 (07:40):
I think it's a great thing. I mean, look, I
think there's been this, you know, you know memes now
about should Americans be you know, screwing in screws in
iPhones or something like that. Right, I think most Americans frankly,
would rather work a services job for the same pay
than working in a factory.
Speaker 5 (07:56):
Well, that was the whole idea with globalization in the
nineteen nine if you go back, and that was sort
of the promise that we were told by politicians, let's
move the jobs to other countries, and what we'll do
is we'll retrain the workforce here so they can do
more service oriented jobs and jobs that are in a
(08:18):
different part of the economy. That didn't end up happening.
Speaker 4 (08:22):
Well, I mean to be fair. Up until recently, we've
been at full employment, so we haven't had massive unemployment
in the United States.
Speaker 5 (08:29):
True. But I mean, if you go back even to
the first Trump administration and the analysis of why he
won states and why Democrats lost in a lot of
these areas, there was a lot of criticism that these
were areas that had been hollowed out with the loss
of jobs moving abroad. And that seems to be still
what the President is speaking to at this point, to
(08:50):
go back to an era where those manufacturing jobs come back.
Speaker 4 (08:55):
Yes, Look, I think that clearly there have been regional
effects that have not been distributed equally, and there are
parts of for instance, my home state of Pennsylvania that
have been really hit hard by this process, right, And
so I do think that the federal government has not
done a particularly good job at figuring out how to,
you know, continue to provide a decent standard of living
(09:15):
for people in these regions of the United States. But
I would say, though, and if we're going to take
Trump's arguments about manufacturing seriously, I think the best argument
isn't so much about unemployment, because, as we've discussed, we
have been at full employment. There is a lot of
sector service sector employment in the United States.
Speaker 2 (09:30):
Right.
Speaker 4 (09:30):
The best argument is really the national security argument, where
there are potentially some aspects of manufacturing where you would
want domestic sources. Right. And by the way, even Joe Biden,
going back to his presidency, imposed one hundred percent tariffs
on Chinese electric vehicles because there was a view that
we didn't want buid to eat Tesla's lunch. Right, We
(09:50):
didn't want Chinese evs that were better, more efficient, cheaper
than you know, the evs made by Tesla and GM
to come in and swamp the American market because it's
a security concern if we're dependent on Chinese cars, right.
So I think there are specific sectors where this is
this is a relevant point for national security.
Speaker 1 (10:08):
The harder I mean, we have defense manufacturers for really exactly, I.
Speaker 4 (10:12):
Agree, And I've written an essay in the Boston Globe
a month ago in association with my book Choke Points
about the pharmaceutical supply chain. This is something that certainly
the United States needs not only more domestic sources of manufacturing,
but what I would call trusted supply chains.
Speaker 6 (10:28):
Right.
Speaker 4 (10:28):
You don't want to be reliant on China for you know,
pharmaceutical additives. Right, do we want to do everything domestically?
Do we want autarchy?
Speaker 5 (10:35):
I don't think so.
Speaker 4 (10:36):
But do we want to be less reliant on adversaries
like China? I think that's a very worthy national security goal.
Speaker 1 (10:42):
So, going back to your book book Choke Points, I'm
thinking about China and how they are wielding kind of
their points. I thought about the tariffs and the kind
of salvel that they lobbied back at the United States
when it comes to rare earth minerals like that is
very targeted and many would say very very, very smart
because of their incredible control over It's not that we
(11:03):
don't have it, but they are set up in a
much more productive system, right in terms of refining and
so on and so forth.
Speaker 3 (11:09):
Walk us through that and how they are fighting back.
Speaker 4 (11:12):
Yes, thank you for bringing this up, Carol, because I
think one of the things I've been most frustrated about
in terms of the coverage of the US China situation
in the last week is this discussion of a trade war. Right,
We're not seeing a trade war. We're seeing something much broader.
We're seeing a multi domain economic war in which tariffs
are just one weapon that's being used, and in fact,
they're not even the most powerful weapon.
Speaker 3 (11:31):
Yeah.
Speaker 4 (11:32):
You look at how China's retaliating.
Speaker 8 (11:33):
Right.
Speaker 4 (11:34):
Yes, they have tariffs that they put on American imports.
But if you're just going tariff for tariff, America has
more to tariff than China has to tariff because we're
importing a lot more from China than than they're importing
from US. But what China has been doing since twenty eighteen,
since the first salvo of tariffs came into place, they've
been preparing things like export controls on critical minerals that
America relies on, from everything from batteries to ammunition.
Speaker 8 (11:57):
Right.
Speaker 4 (11:57):
They've been sanctioning US companies, So pH got sanctioned. Recently
a Skidio, the biggest drone manufacturer in silicon value, was sanctioned,
and now they've got a ration batteries. Each customer now
only gets one battery per drone, right, which is pretty
absurd when you think about it. Yeah, Alumina, the big
DNA sequencing company, got sanctioned by China. You're also seeing
things like anti monopoly investigations into Nvidia and Alphabet Right,
(12:19):
So China is not retaliating in sort of a symmetric manner,
only they're also fighting asymmetrically.
Speaker 1 (12:26):
Yeah, great stuff, Thank you so much, so I appreciate
that you could come in. Edward Fischman, Senior research scholar
and professor atpat Columbia. His book is Choke Point American
Power in the Age of Economic Welfare.
Speaker 3 (12:37):
This is Bloomberg Business Weekdaily.
Speaker 2 (12:40):
You're listening to the Bloomberg Business Week Podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
on Apple CarPlay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 5 (12:53):
We are going all in on higher education right now
because there is a lot happening when it comes to
Washington and elite colleges and university's. President Trump escalating his
administration's fight with Harvard by threatening its tax exempt status
after the school defied the government's demands to change its
policies in exchange for billions of dollars in federal funding. Also,
that's not all. You'll recall that a bit less than
(13:15):
a month ago, the President said that the Education Department's
one point six trillion dollars student loan portfolio would be
handled by the SBA. That move coming amid worries that
his efforts to overhaul the federal government could reduce programs
and services. So we've got a great pair of voices
to talk about hire at. Janet Lauren is higher education
finance reporter for Bloomberg News. Jillian Berman is here too.
(13:35):
She's assistant managing editor for News and Enterprise at market Watch.
She's also the author of a brand new book, It's
out Now, Sunk Cost, Who's to blame for the nation's
broken student loan system? And how to fix it? They
both join us here in the Bloomberg Interactive Brokers studio. Janete,
do you want to start with you and Harvard? Because
I think it's fair to say shots fired, Yes, for sure.
Speaker 6 (13:57):
Yesterday Harvard released a letter that was sent to it
last Friday by the government by a multitask force, multi
agency task force, sort of stepping up their demands if
they want to continue their flow of billions of dollars
in federal research funding. They released that letter, along with
one from two law firms, saying they were not going
to accept their demands and said there were certain lines
(14:20):
that they could not cross in terms of academic freedom.
They had a whole list of things such as the
government wanted curbs on doing things and admissions and governance
and hiring and lots of things. And they said no,
And a couple of hours later, the federal government said,
we're freezing two point two billion dollars in loans.
Speaker 3 (14:44):
I'm sorry in grants. It's a big deal.
Speaker 6 (14:47):
It's a big deal, and it's a lot of money.
And you say, well, but they have a fifty three
billion dollar endowment. Why can't they spend it. Well, seventy
percent of it is restricted and it isn't a bank account.
But certainly, you know they have some liquidity. You know,
they have a one point five billion dollar line of credit.
We saw last week they issued bonds of seven hundred
(15:10):
and fifty million dollars. But it is a lot of
money because eleven percent of their entire budget comes from
the federal government in these research grants.
Speaker 1 (15:18):
I got to say, when we talk higher education, there's
just a lot of money either way you look at
and now someone like Harvard has a huge endowment, which
gives it an incredible cushion. Having said that, I want
to pull out a little bit and talk about the
money that is in higher education. We all remember is
it ten fifteen years ago. That headline that came across
that said college debt was higher than credit card debt,
(15:41):
and we all stopped and be like, how did we
get here? Jillian, come on in on that starry story.
This is what you get into because I think we
spend so much time. How did we get to this point?
Speaker 3 (15:50):
How did we?
Speaker 5 (15:51):
Yeah?
Speaker 8 (15:51):
So, you know, there are several different factors, but that
headline you talked talked about really came in the wake
of the Great Recession, and that was a huge moment
for the explosion of student debt. We saw states pull
back from funding their public colleges, which means students and
families had to take on more of that funding. Obviously,
families didn't have as much money to tap themselves or
equity in their homes. And then also because of the
(16:14):
you know, the sort of loose labor market, students who
graduated with this debt had trouble finding jobs that could
help them repay it. So the Great Recession was, you know,
sort of a really big moment for student debts.
Speaker 5 (16:24):
It's a unique problem to the US though, and this
is something that doesn't happen in other countries. But at
the same time, we also have the best one could
say we have among the best universities in the world.
Not every one of them, but certainly these are institutions
that are recognized internationally. What is so different about the
(16:45):
US system that allows something like this to happen.
Speaker 8 (16:47):
Yeah, So the way that we fund colleges in the
US is largely through students, so you know, it's sort
of like a voucher. The student decides where they want
to take that government money. And a lot of other
countries where you know, we think about having little student debt,
the government is doing more direct funding of the schools themselves.
And you know that design of the system here in
(17:08):
the US that was on purpose. We like to have
you know, what we call like diversity of institutions and
you know, sort of the ability for the market to
play out.
Speaker 6 (17:18):
So in the Trump administration has said they're interested in,
of course, shutting down the Education Department, which after two
thousand and nine began dispersing the loans and now we're
at a huge amount. I think it would be the
fifth largest US bank in America is moving it away
from the Education Department to another agency. Trump has a
(17:40):
Small Business SBA. Would that be reasonable.
Speaker 8 (17:44):
It depends who you ask. I think, you know, the way.
There hasn't been much detail, first of all about that plan,
but I think the way that they envision it is,
you know, maybe moving some of the staff at the
Department of Education that handles this stuff over to SBA.
Even still, I think people who work on these things
are are worried that it could cause a lot of disruption.
We already have some evidence that the staff cuts have
(18:07):
caused disruption for borrowers and for students as they try
to access those funds. So I think it could post
some challenges.
Speaker 5 (18:13):
You know, I kind of approach this differently now that
I have kids, because now I need to save for college.
I'm going to.
Speaker 3 (18:19):
Cost you a million dollars a year.
Speaker 5 (18:21):
Well that's just good wondering. Everybody's sitting around here does
have to think about it. Funny but not funny. Well
you're done, I know, I know you're not done yet.
Speaker 1 (18:30):
No, I'm not done yet, because there's you know, it's
we're also an environment where it's like okay, now we
get the masters.
Speaker 5 (18:36):
You know, I was in college it was like okay,
twenty in the twenties to thirty thousand, dollars per year.
Now we're at what, Carol.
Speaker 6 (18:42):
Sixty seventy eighty Yeah, ind right, everything all in right,
total cost of attendance.
Speaker 5 (18:48):
Yeah, you know, I was thinking then it couldn't get
any more expensive, Jillian, but that obviously wasn't the case.
The system has to break at some point.
Speaker 8 (18:55):
No, yeah, I mean people keep saying that, and we'll see.
I think that some of the disruption, you know, caused
by the cuts at the Department of Education, may you know,
push some things in another direction. Also, you know a
lot of people have done some reporting on how gen
z is really less interested in college and so you
know that could put some enrollment pressure on these schools
(19:16):
and force them to bring down the cost.
Speaker 1 (19:18):
How much fault do you put at universities and colleges
where the price just teems to go up and up
and up, and they're like, we've got to pay because
it's for teachers, it's for facilities, xyzts like how much
it has outpaced inflation many times over?
Speaker 8 (19:32):
Yeah, I mean, I think the argument that I take
in the book is that in a lot of cases,
the colleges are sort of like responding to incentives created
by the system. So I mean, one big example is
if you talk about graduate school. In the mid two thousands,
the government allowed for people to start borrowing up to
the cost of attendance for graduate school, and then kind
of shortly after that, the number of master's degree programs
(19:54):
exploded at universities.
Speaker 7 (19:56):
And there's a financial like pipeline.
Speaker 5 (19:59):
Right exactly.
Speaker 8 (20:00):
So yeah, and at the time, like even Republican lawmakers
you know, didn't really think that much about the consequences
of that decision, you know, and if you were to
ask them now that that would be a no go.
Speaker 3 (20:10):
What about loan limits?
Speaker 6 (20:11):
Are those those who've been talked about. Certainly they're in
place for undergraduates, but for for graduates students instead of
up to the cost of attendance, What do you think
would happen there?
Speaker 8 (20:22):
So that I think, you know, some congressional Republicans are
interested in doing something like that, you know, I think
in a lot of ways it makes sense.
Speaker 3 (20:29):
And then you know, of.
Speaker 8 (20:30):
Course there's other people who will tell you, well, if
that happens, then you're going to be sending people to
the private market, where you know, often they're fear of protection.
So it's like a tricky, tricky balance or not as
many will go to school, right, or not as many
we'll go to school.
Speaker 7 (20:42):
Which which some have argued.
Speaker 1 (20:43):
You know, we all laugh about it, but it's not funny.
But you know, you'd need a plumber, an electrician or
somebody in the construction industry. There's like, you're fighting for
these people, and they all talk about it that there's
nobody there to do these things. And whether or not
we go back to trades people, you know, that's another argument.
Speaker 8 (20:58):
Right right exactly.
Speaker 5 (20:59):
Yeah, So, Jillian, we talk about this in the context
of what's happening in Washington right now, and a lot
has changed in this administration, and I we're at a
point where I think it's fair to say that the
Trump administration is in a combative stance with colleges and
universities right now. How do you look at what's happening
in Washington is really reshaping higher education in the US?
Speaker 8 (21:22):
Yeah, I mean, I think, you know, part of the
reason that there's been some political will for the kind
of stuff that the Trump administration is doing is because
of questions around the value of higher ed. You know,
if people thought that they were getting their money's worth,
it would be harder to attack these institutions, So, you know,
I think it will raise some questions about you know,
about that going forward.
Speaker 5 (21:43):
In your view, Janet, is it realistic to think that
in an institution like Harvard, for example, could lose its
tax exempt status.
Speaker 6 (21:51):
It's hard to predict anything these days.
Speaker 3 (21:54):
But what it do do an institution like Harvard?
Speaker 6 (21:56):
So Harvard doesn't pay property taxes, I mean unless it's
a business expense, like if they run a parking garage,
they would pay taxes. They're able to issue tax exempt bonds.
They do pay an endownment tex As of twenty seventeen,
their donors get a tax break. If you give money
to Harvard, you get a tax break. So there's a
lot of things and especially going to the bond market.
Speaker 3 (22:19):
They just had.
Speaker 6 (22:19):
Taxable debt, but they do have the ability to have.
Speaker 3 (22:22):
Not tax exempt debt.
Speaker 1 (22:26):
So, Jillian, where do you see this going right? Because
it just feels like the velocity continues, the debt continues
to grow, it continues to be a story we you know,
talk about it, and it really is difficult on a
younger generation who want to buy homes perhaps and have families,
but they're stuck paying off their college loans and that
has an economic impact.
Speaker 8 (22:45):
Unfortunately, you know, it seems like we may be stuck
in the pattern that we're in for a while. You know,
there's not a lot of political will to change the system.
The people who have the power to do it really
are Congress and you know, part of the reason why
we've had so so many changes in policy and borrowers
experienced so much whiplashes because the executive branch has tried
to do it, but you know, they only have so
(23:07):
much power, so it just gets reversed for the next time.
Speaker 1 (23:09):
Do you anticipate that more kids might go outside the
United States for college and that that could at some
point have an impact?
Speaker 6 (23:15):
Oh?
Speaker 3 (23:15):
Interesting, I you know, I don't know.
Speaker 8 (23:16):
That's definitely often abdocated as a as a cheaper option,
So we'll see.
Speaker 3 (23:20):
Yeah.
Speaker 5 (23:20):
You know, it's talking though to somebody recently, and even
the schools outside the US are even that much less expensive.
Speaker 6 (23:26):
I say, then you've got to pay for them to
get overseas a plane ticket.
Speaker 5 (23:31):
Yeah, sounds like you've been thinking about this. Janet, Hey, Jillian,
before we let you go, you know, if we're talking
in five years, uh, do you think this problem will
have gotten better gotten worse.
Speaker 3 (23:40):
Well, it'll be some cost. Part two.
Speaker 8 (23:42):
I think maybe unfortunately the way it's looking not better.
Speaker 5 (23:46):
Necessarily classes not have full in any way.
Speaker 8 (23:50):
I mean, I guess you know, you know what, there
have been some states that have you know, really tried
to invest more in helping their residents go to college.
And we actually have seen evidence that the cost of
public college on averages going down a little bit. So
it's unclear if that tren's going to continue, but maybe
it will.
Speaker 1 (24:06):
I remember was it Bloomberg who did the survey and
they said or was it Jared Dillion?
Speaker 3 (24:12):
I don't know, it was either.
Speaker 1 (24:13):
Like it unless it's Harvard or an IVY league that
state schools increasing year.
Speaker 5 (24:18):
That's Jared's view.
Speaker 7 (24:19):
Basically, you get more bang for your buck in terms
of but I thought we did.
Speaker 8 (24:22):
Some research to Yeah, I think you guys, Yeah, had
a great piece about right, sort of the value of
a lot of different public lis.
Speaker 1 (24:28):
ROI the return on investment, right and in terms of
like so maybe you know, people start to think more closely.
Speaker 5 (24:34):
Yeah, it's fascinating.
Speaker 1 (24:35):
I can't tell you how many times it comes up.
And whenever we have anybody right from a college it's like.
Speaker 3 (24:39):
Why does it cost so much?
Speaker 6 (24:41):
They don't always have a great answer.
Speaker 3 (24:43):
Yeah, that's true.
Speaker 1 (24:44):
Yeah, good stuff, Jillian, Thank you so much.
Speaker 3 (24:47):
Good luck with the book. Thank you.
Speaker 1 (24:48):
Jillian Bourman, author, market Watch, Assistant Managing editor, News and Enterprise,
her new book, Sunk Cost, Who's to blame for the
Nation's broken student loan system and How to fix it?
Speaker 3 (24:58):
How long have we been talking about this? A long time?
Speaker 5 (25:01):
I mean my entire career.
Speaker 3 (25:02):
Unbelievable.
Speaker 1 (25:03):
This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify,
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