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Source link: http://archive.mises.org/16738/the-plight-of-the-mba-generation/

The Plight of the MBA Generation

May 2, 2011 by

They did what they were supposed to do. Now, they have few job options at all. FULL ARTICLE by Doug French


bagoh20 May 2, 2011 at 9:41 am

You should be getting an MBA to create jobs, not to get one. Build your own.

JFF May 2, 2011 at 6:54 pm

How? Many holders of MBAs don’t have any skills or knowledge of how to do anything outside of business school. I still do not understand how you’re expected to create a business in anything without having any experience doing what you plan on doing.

Anders Mikkelsen May 4, 2011 at 10:01 pm

The MBA is to teach you how to administer a business, not teach sales, marketing, and entrepreneurship skills. If you develop good sales skills though you’ll always have opportunities – you just have to find something worth selling.

Andrew May 2, 2011 at 12:41 pm

Hmm, maybe they should get off their lazy asses and go get an associates in programming. Then they can get back to 120 – 200k salaries in no time :) Good thing they off-shored all those resources…now if you want good US labor you have to pay a premium for it in the computer industry because no one is going into the profession anymore. And, as with all markets…rising tide raises all boats….so even ancillary computer professional jobs are paying more. I’ve been doing this for about 14 years and have never seen salaries in system, database, and middleware administrative jobs this lucrative before. And so much hiring is going on right now, its crazy. Convinces me the economy, at least the IT budget economy, is recovering.

hayeksheroes May 2, 2011 at 12:58 pm

US programmers are outsourcing to other countries. If you hire an American programmer, you better make sure he’s not outsourcing. Because he probably is. He’s got 3 or 4 clients and charging $60 an hour and he’s only supervising Randel in Hyperbad.

Anders Mikkelsen May 4, 2011 at 10:07 pm

Those guys are my heroes! (Check out 4 Hour Work Week.) Outsourcing can be your friend. Anyone in an engineering or technical profession who is good with people quickly gets moved to high paying customer facing roles, often whether they like it or not. It’s all about moving up the value chain and letting the old stuff/lower level stuff get outsourced to the late comers. Considering how few people understand how to align IT or other technical areas to business needs there are huge opportunities for technical people who understand business – they can actually execute. If they multiply themselves by supervising Randel in Hyperbad and charging only $60 an hour instead of $120 or more that’s a great deal. (Isn’t the professional services rate $250 or more now?)

hayeksheroes May 2, 2011 at 12:56 pm

I tend to disagree with the premise of this article. First, I got an MBA and yes, the job market is lousy. Not one phone call after graduation. However, an MBA degree can help a person start their own business. If we really want economic growth and prosperity, we need more entrepreneurs and less paper pushers. Hopefully, an MBA degree will create more efficient and successful entrepreneurs.

Second, we need to look globally instead of domestically. Although the white collar jobs may be less here, there may be opportunities in other countries.

Third, MBA education will open student’s minds. The sad fact is that I had not read works by the Austrian economists until I got to business school. Hopefully, business school will spread new ideas.

A. Viirlaid May 2, 2011 at 2:40 pm

First, thank-you to Mr. Doug French. Great article, but quite depressing, if sobering. Sometimes it is true, “Reality Bites”.

Most especially whenever a nation’s central bank pins its hopes on Keynesian “theory” and thus underpins its policies on bizarre monetary hi-jinks and “stimulation”.

As you point out, the Real Estate, Finance, Insurance, and Banking Sectors, and also the Architecture and Engineering sectors, have all joined the larger group of ‘regular’ Americans who are victims of The FED’s overly-stimulative policies of 2001—2008 just as an earlier Roaring 20-s Generation was the victim of Ben Strong’s FED policies (“coup de whiskey”) during the 1920-s. Will our Ben Bernanke replay the tragedy of that earlier Ben’s mistakes? Just WHY does the central bank continue to create unsustainable, and ultimately tragic, economic bubbles? These bubbles are a mirage. No long-lasting jobs can come of them. Then WHY?

From Doug Noland’s recent article:

The collapse in confidence was the consequence of cumulative (“Roaring Twenties”) financial and economic excess. It was recognized at the time that the Fed had steered badly off course; had succumbed to “New Era” thinking; and had abrogated its responsibility for maintaining stable Credit. The powerful president of the New York Fed, Benjamin Strong, was faulted for his predilection for intervening in support of the markets, while turning a blind eye to speculative excess and Bubble Dynamics.

From “Reliving the Crash of ’29: How Hoover’s Policies Blazed the Trail for FDR and Wrecked the US Economy” at http://www.lewrockwell.com/rothbard/rothbard96.html

One point is undisputed: The autocratic ruler of the Federal Reserve System, from its inception in 1914 to his death in 1928, was Benjamin Strong, a New York banker who had been named governor of the Federal Reserve Bank of New York. Strong consistently and repeatedly used his power to force an inflationary increase of money and bank credit in the American economy, thereby driving prices higher than they would have been and stimulating disastrous booms in the stock and real estate markets. In 1927, Strong gaily told a French central banker that he was going to give “a little coup de whiskey to the stock market.” What was the point? Why did Strong pursue a policy that now can seem only heedless, dangerous, and recklessly extravagant?

To hayeksheroes, yes it is true that an academic education can have many benefits, including in your case, learning about The School of Austrian Economics, and hopefully including the possibility of becoming a successful entrepreneur.

But there is a problem. It’s going to take a long time for this so-called Recovery to happen. And in hopes of making that recovery happen, The FED is once again doing everything it can to create another bubble — but it will not work, other than to eventually cause an implosion in the entire Economy.

We are creating delusionary thinking in a whole generation of college students who have put their faith in the Bubble Blowers at The FED. Talk about “Malinvestment”. This generation’s mantra will be “My entire education was one big Malinvestment!”

From Doug Noland at http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10531

We need rules to ensure that Federal Reserve policymaking does not dictate the (re)distribution of wealth throughout our society. We need rules that would ensure that the public and financial markets do not expect too much from monetary policy. We need rules that would forbid the Fed from monetizing debt, ballooning its holdings, and massively inflating system liquidity – at its discretion. Rules are needed to ensure that monetary policy doesn’t dictate decision-making throughout the entire economy.

And we so need a framework of rules that would work toward ensuring that the stability of our monetary system is beyond repute – that society need not fear that policymakers will devalue their savings or jeopardize the Creditworthiness of our nation’s obligations and financial system. And we need rules to ensure that the ideology of a single appointed central banker cannot have a profound impact on the nature of monetary policy, asset prices, debt structures, speculative dynamics, financial flows and resource allocation. The risks of indiscretion are much too great, and Henry Simons was absolutely right.

And for good measure here is Charlie Munger suggesting that the entire Banking Sector should be downsized by 80%. He also recognizes the artificial nature of the size that this sector was puffed up into, via The FED’s artificial manipulation of the Money System.

Just exactly where do we think ALL of the finance graduates are going to productively go upon graduation?


Anders Mikkelsen May 4, 2011 at 10:10 pm

There is tons of productive work to do out there. That said shuffling mortgages around is not one of them. Helping firms better align themselves with the market is one area – http://www.scribd.com/doc/24192653/TOC-and-Mises

Socrates May 2, 2011 at 2:48 pm

Thanks Doug!!! Saying it like it is, …timely advice i must say!! I was close to jumping on the MBA bandwagon…but the price tag was just too hefty!! In my opinion, if the tution of an MBA program is not equivalent to 3- 5 months of my salary, then it’s ridiculous. It’s just not worth it, especially when there is no guarantee of any employment. In my opinion, we really don’t do it because we learn anything of substance ( I could easily shop for books at amazon and the mises bookstore that would sufficiently prepare me for an excellent career), we do an MBA because employers value it!! And in my opinion, when you embark on such an expensive grueling ordeal that bombards you with theories that sometimes don’t mesh with reality only for the sake of a higher pay, there is a very high probability of being disappointed. There is no substitute for experience!! And if you don’t have the relevant experience like most of us;do not think that the MBA will necessary get you through the door. It might, but what an expensive way to get in.
I suggest, hustle and start from the bottom in any organization and make your way up the old fashioned way, there just isn’t no substitute hard work.

Sione May 2, 2011 at 2:48 pm

I was not aware that your engineers are having such a hard time of it and that many are out of work. Which sectors of engineering have been hit?


JFF May 2, 2011 at 6:56 pm

All disciplines related to the building industry, so site civils, environmentals, structurals, geotechnicals, mechanicals, and electricals along with those in transportation that don’t do public work (not many, but a few).

HL May 2, 2011 at 2:52 pm

Instead of college, at 16 my kids will get to choose between a lump sum inheritance in the form of the keys to a fried chicken store, check cashing place or convenience store. That’s it. Oh, and at 18 years of age, they get the boot. See you at Christmas and other major holidays – by invitation only. Cheers!

wastate May 2, 2011 at 6:24 pm

I know this is only my experience but I don’t even have a BA, let alone an MBA. I am currently billing at 180k/year. Focused and specialized knowledge is much more valuable than general studies teaching multiple “truths”.
The education system has failed to prepare our youth for the needs of business. It has done very little more than create a (or several) generation(s) of narcissistic and elitist young folks ill prepared to go out and find their way about this world. Always looking to see what the state will give them rather than go about their business and create wealth “the old fashion way”.
It is becoming more and more apparent to me that the only way to educate my offspring is to create/provide the experiences necessary to understand the world regardless of time and effort on our(parents) part. We can not rely on the state to educate future generations any longer.
The truth is not hard to find except when we leave it to the state to tell us what it is!

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