The Unintentional Message (and Lesson) of "The Internship"

Over the weekend I saw the Vince Vaughn and Owen Wilson movie " The Internship" (trailer shown above) Vaughn (Billy) and Wilson (Nick) played two veteran watch salesmen who had lost their jobs in part because people don't wear watches anymore, but simply check their cell phones to determine the time. Billy ultimately lands two internships at Google for both himself and Nick where they were placed in a group with other (much younger) interns who were still in college.

During one scene, this group of interns discuss their concerns of finding a job after college. One of the college-aged interns said to Billy and Nick (paraphrasing), " You could achieve the American Dream. The American Dream isn't the same for us. It isn't guaranteed". I found this line intriguing.  It is clear that this movie takes place in the present day. Thus, Hollywood and Google are essentially admitting that the Obama administration has not created confidence for young millennials seeking jobs after college. Hollywood, of course, is notorious for being quite Left in their political ideology. Also, Google is very tight with the Obama administration. Yet, both Hollywood and Google--whether intentionally or not--indicated that liberal ideology (and hope and change) have not lived up to the expectation of millennials. There are two key issues to consider when looking at the economic hope of those in their late teens to mid twenties--1) their educational choices 2) their means of funding their education.

The group of millennials depicted in the movie would likely enter the technology field, a field where there are more opportunities for jobs than other fields. However, some students are choosing fields that are not particularly employable. This, plus a sustained poor economy, has contributed to 48% of those with a college degree working in a job that does not require such education. This is not to say that people should forgo college, but the liberal ideal of universal college education is wrong. A high school graduate with a strong work ethic should not be frowned upon, nor should a high school graduate who seeks training at a technical school. In fact, likely due in part to our culture's emphasis on intellectual output over tangible output, skilled trades like carpentry and car mechanics are among the ten hardest jobs to fill in America.. As a researcher in academia, I certainly don't want to downplay intellectual output, but our society needs a myriad of outputs to continue to be the strongest nation in the world. As Governor Palin wrote in a post earlier this Spring:

It’s crucially important today for young people to think about the big picture when making education decisions. And the big picture is the goal of self-reliant business opportunities based on work ethic and not entitlements. One of the reasons I aggressively encouraged vocational training opportunities as governor of Alaska is because they lead to good paying jobs and happy careers. Young people should not be pressured into assuming that a college degree is the only path to employment today. It’s not. Some college degrees obviously lead to clear professions, like those in the medical and engineering fields, but that’s not the case with many of the liberal arts degrees young people today gravitate toward either because they aren’t sure what they want to do after college or because they’ve been led to believe that college life is a sort of rite of passage for any career. That might have been the case once, but the salary and career opportunities a liberal arts education alone can get you have been dramatically limited these days. It’s so sad to see young people holding expensive college diplomas that come with no practical job opportunities. 

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Follow your dreams, by all means. But don’t be blind to the fact that your dreams might be achieved outside of acquiring an outrageously expensive traditional college degree. Do not be lulled into thinking that good jobs grow on trees or that the government will somehow take care of you. The bottom line is – as my dad always told me – find out what you love to do, then find out how to make a living doing it. Learning a trade can do both. No one can take those vo-tech real life skills away from you.

It's not only the choice of educational training that makes the difference; it is also how you fund it. For all the flack Governor Palin received for taking five years to graduate from college and for changing schools multiple times, she did something few people do--graduated from college with no debt. The governmental subsidization of education has lead to public higher education costs to increase 250% since 1982, which makes it harder for college to be affordable. However, it is still achievable. Some students are fortunate enough to have parents who fund their entire education. Some are able to obtain scholarship to assist them, and some work during college and summer breaks to pay for college and/or help mitigate the need for student loans.

Student loans, like any other construct with government intervention, have become a political football. In 2010, nearly concurrently with the passage of Obamacare, President Obama signed a student loan overall that wiped out fees paid to banks who act as intermediaries in administering student loans (i.e. the federal government took over the student loan industry). President Obama noted at the time (emphasis added):

Mr. Obama portrayed the overhaul of the student loan program as a triumph over an “army of lobbyists,” singling out Sallie Mae, the nation’s largest student lender, which he said spent $3 million on lobbying to stop the changes. “For almost two decades, we’ve been trying to fix a sweetheart deal in federal law that essentially gave billions of dollars to banks,” he said. The money, he said, “was spent padding student lenders’ pockets.”

Things haven't changed since the three plus years after the bill took effect. The student lenders' pockets are still being padded, but now those pockets are Uncle Sam's pockets. In fiscal year 2013 alone, the federal government will reap $51 billion in "profit" from these student loan borrowers. This profit is greater than that of Exxon Mobil or Apple.

As was the case last year, student loan rates are set to double on July 1st, thus perpetuating the political game between Congressional Republicans and the Obama administration. The House has passed a bill that would make loan rates fluctuate based upon market rates, while the Obama administration wants rates fixed (i.e. controlled by the government). Politicians continue to use students as a political football, and the Department of Education is reaping the benefits. Students need to make smart choices in their education, but the government must stop trying to "fix" things only to pad their own pockets.

There is every reason for hope for millennials, and I say this as someone who is on the "old" end of that generation. America is rife with opportunity if people are willing to work hard enough, be rational, and plan ahead. Abraham Lincoln, one of our most famed presidents, did not have a college degree, but he had wisdom--and an ax. Lincoln is quoted as saying, " if I had eight hours to chop down a tree, I'd spend six hours sharpening my ax”. He prepared for the goal ahead of him, and he was efficient. Millennials can act in the same manner by making wise decisions with educational, occupational, and financial choices. The American Dream is still achievable, in spite of a government that acts as a barrier. Crossposted here and here.

Governor Palin's Free Market Populism Bests the Boys' Crony Capitalism

Under the false premise that the government can create jobs, the Obama administration is proposing yet another stimulus/jobs bill that would use nearly half a trillion in taxpayer dollars as another supposed attempt to help the American economy. This new jobs bill is considered by some, however, to primarily be a bailout for blue states. This comes on the heels of the Solyndra scandal where President Obama’s hybrid of crony capitalism and corporatism meant taxpayer dollars went to funding a failed solar panel company with strong ties to his campaign donors. Solyndra is not the only company to fall under the Obama administration’s “too green to fail” mentality when it comes to stimulus funding, as four other “green” companies who received stimulus funding also have gone bankrupt. This loan guarantee program for green companies that was a key component of the 2009 stimulus bill has cost American taxpayers $38.6 billion, but has yielded fewer than 4,000 of the promised 65,000 jobs from the loan program. The stimulus bill as a whole was supposed to prevent unemployment from going above 8%, but instead it has been above 8% since February of 2009.

Additionally, although Governor Romney’s healthcare reform bill was not specifically intended to spur job creation, it's big government action has impacted jobs-- for the worse. A report published this week estimates that Romneycare has cost Massachusetts more than 18,000 jobs. Beyond their similar approaches to healthcare reform, Governor Romney’s policies and stances are similar to President Obama’s in that he feels that subsidies and corporatism are part of a “pro business/big government” mindset, as his administration offered special technology loans to lure business from other states. As a presidential candidate for 2008 and 2012, Romney has supported both energy subsidies and insurance subsidies, and he still supports TARP—all means of government funneling taxpayer dollars towards business.

Governor Perry, who is touted by many as the “jobs” candidate, may have had a lot of jobs come to Texas during his tenure, but he also implemented “pro business” loans like both President Obama and Governor Romney. Like President Obama, he scratched the back of his political donors at the expense of taxpayers. His Emerging Technology Fund also proved to be a mechanism of reciprocity to his political donors to the tune of 200 million in taxpayer dollars. The Wall Street Journal reports that one such donor invested more in Perry’s campaign than the company for which they were seeking a grant. Interestingly, the grant was initially denied by a regional committee, but was later approved by a Perry appointed committee:

In 2009, when Mr. Nance submitted his application for a $4.5 million Emerging Technology Fund grant for Convergen, he and his partners had invested only $1,000 of their own money into their new company, according to documentation prepared by the governor's office in February 2010. But over the years, Mr. Nance managed to invest a lot more than $1,000 in Mr. Perry. Texas Ethics Commission records show that Mr. Nance donated $75,000 to Mr. Perry's campaigns between 2001 and 2006.

The regional panel that reviewed Convergen's application turned down the company's $4.5 million request when it presented its proposal on Oct. 7, 2009. But Mr. Nance appealed that decision directly to a statewide advisory committee (of which Mr. Nance was once a member) appointed by Mr. Perry. Just eight days later, on Oct. 15, a subcommittee unanimously recommended approval by the full statewide committee. On Oct. 29, the full advisory committee unanimously recommended the approval of Convergen's application. When asked why the advisory committee felt comfortable recommending Convergen's grant, Lucy Nashed, a spokesperson for Mr. Perry, said that the committee "thoroughly vetted the company."

This was only one example of the reciprocity between Perry donors and grant recipients. The Dallas Morning News shares this graphic depicting hundreds of thousands of campaign donations from companies who would later receive grant funding from Governor Perry’s initiative:

Governor Palin, on the other hand, realizes that government neither creates jobs, nor is supposed to be a channel to funnel taxpayer dollars back to political donors. She recognizes that government’s role is not to be pro business, but pro market, where through billions of transactions the American public determines the success and failure of business by what they choose to buy, not by what government chooses to subsidize. In her Tea Party speech earlier this month, she spoke of the need for less federal government intervention, not only in less regulation and more federalism, but also in removing subsidies, loopholes, and bailouts—the very things her potential political opponents engage in-- from the economic equation (emphasis added):

But here’s the best part: To balance out any loss of federal revenue from this tax cut, we eliminate corporate welfare and all the loopholes and we eliminate bailouts. This is how we break the back of crony capitalism because it feeds off corporate welfare, which is just socialism for the very rich. We can change all of that. The message then to job-creating corporations is: We’ll unshackle you from the world’s highest federal corporate income tax rate, but you will stand or fall on your own, just like all the rest of us out on main street.

Governor Palin knows better than anyone else the need to remove crony capitalism from politics. As she noted on Greta van Susteren’s show earlier this week she has the “bumps and bruises to prove it”. ACES, her oil tax plan, reformed Governor Murkowski’s crony corruption tainted plan that was written to favor certain oil companies and ultimately also led to the arrest of oil company personnel, gubernatorial staff, and state legislators. ACES was not a behind closed doors deal. In fact, Governor Palin did not allow lobbyists in her office at all. Instead, it was a plan written and passed in a transparent manner, was presented to the people of Alaska more than two weeks before it was presented to the legislature, and did not involve undue influence from the oil companies. Following the passage of ACES, Alaska saw a record number of oil jobs during Governor Palin’s tenure. Not only were the number of jobs increasing, the legislation made development more attractive for other companies beyond the “Big Oil” companies favored by Governor Palin’s predecessor. Since the passage of ACES, the number of companies filing with the state of Alaska has doubled.

Even though a third of Alaskan jobs are tied to the oil industry, Governor Palin’s stellar jobs record extends behind solely that industry. Critics may argue that in an energy rich state, jobs naturally increase during a time when oil prices are high (as was the case during Governor Palin’s tenure) as more energy industry jobs are created. When Governor Palin took office in December of 2006, Alaska was pulling up the rear when it came to jobs, ranking 49^th out of the 50 states and Washington D.C. In her first year in office, Alaska was 6^th best in improvement in unemployment. By the end of the final year of her tenure, Alaska was ranked 21^st in the country. This kind of impressive record on jobs is how Alaska was 2^nd best in job growth during her tenure. Data from the Alaska Department of Labor and Workforce Development, showed that in addition to a 13.7% increase in resource development jobs, Alaska saw a nearly 5% increase in business service jobs and a 6.4% increase in education and health related jobs during Governor Palin's time in office.

Governor Palin’s record reinforces her rhetoric. Instead of giving companies millions or billions in taxpayer dollars in an attempt to create jobs or giving preferential treatment to favored companies or campaign donors, Governor Palin sought to remove the ties of cronyism and truly create a level playing field where businesses are neither too influential to fail, nor too small to succeed. This is what separates Governor Palin from all of her potential political opponents who have gained for themselves the moniker of crony capitalist or corporatist. Instead, she is, in the words Jim Pethokoukis of CNBC, a free market populist. This doesn’t make her William Jennings Bryan in skirt railing against big business, but instead a conservative warrior fighting against entangled web of business, political donors, and big government.

Crossposted here and here.