Trade school, not 4-year college, is a better bet to solve the US income gap

With the constant ads for mutual funds with outrageous up-yours fees for just tracking the S&P 500, the endless shilling and apologetics for investment banks and hedge funds, the perpetual armchair quarterbacking of the market by overpaid newsreaders who really wouldn't even be working there if they even halfway understood what they were talking about... why does anyone watch or even pay the slightest attention to what CNBC has to say?

I have seen it argued that the reason for this is that employers are prohibited from using intelligence tests to evaluate job applicants, so they use years of education as a proxy for intelligence.

It's a bizarre premise, because US productivity has outpaced both the EU and Germany over the last 25 years.

In 1995-1996, US and German GDP per capita were almost equal, at $30,000 to $31,000. Today the US is about 40% higher.

US manufacturing has grown substantially over that time. The vast gains in productivity are precisely the cause of the employment plunge in manufacturing. Real manufacturing output is up 78% since 1991.

Germany has maintained its outsized manufacturing export base in part through high degrees of protectionism and riding an artificially cheap currency (cheap for Germany, not for Spain, Portugal, Italy or Greece), to the detriment of Eurozone rivals.

Another idea, indirectly related, is to simply stop treating all university degrees equally.

The whole reason student loans are so broken right now is because they cannot be dismissed, so lenders are incentivized to lend with reckless abandon. In the worst case scenario the loan converts into a lifetime rent on an individual that automatically adjusts for inflation. On the other hand, the idea behind creating special rules for student loans is easy to see. By removing any risk in lending, that 'reckless abandon in lending' removes any real up front financial barrier to education and investing in your society's education is as good as investing in your society.

The problem here is people are then using this to get degrees that are more recreational than productive. In high school kids are taught that the key to a good life is to get a college degree. And so many people, who are otherwise unmotivated or unambitious, simply choose easy and interesting degrees. The 'soft' degrees absolutely have a purpose, but a person coming from no means choosing to major in a soft degree is not going to meaningfully change their expected earnings. All they're going to do is remain a person of no means who is now also deep in debt that can never be dismissed.

So the idea is to maintain the current system, but restrict lending just to degrees that are statistically likely to 'substantially' effect a student's expected earnings. When you remove the illusion of 'any degree is fine' you start to bring the connection between education and earnings back to reality. And you also push students towards a path of greater capability which is not only good for themselves, but also for the nation as a whole.

This is a tangential attack on the source, not the content. Please address the article, not the publisher.