Should Colleges Open? (with Scott Galloway)

Automatic TRANSCRIPT

Hi. This is Andy Slab. Thanks for tuning in bubble. We're going to try something different this week, we're going to do this episode NPR style that means no breaks, but at one of those annoying member drives. So they episode is Ad Free, but I do want to ask you to consider if you haven't already becoming a supporting member of in the bubble. If you like the show for as little as five dollars per month, you can sign up to get bonus content and discounted or even free show merchandise. Plus you know that Zaken I donate all of the funds that we. To covid relief funds I benefiting the world's central kitchen and then last month benefiting the. Navajo relief efforts. So we've already been able to note eight, twenty, five, thousand dollars and You're listening and your donations to podcasts at help us do that. So we're going rent a special promotion this week for new members. If you signed up to become a member this week the week of August third for contribution of ten dollars a month or more. We will mail you a coupon code to get in a free in the bubble T. Shirt, which has mine into smug on it. And if you signed, you just go to www. DOT LEMONADE MEDIA DOT COM slash in the. Bubble. You. Welcome in the bubble I'm Andy, Slava, and this is. We have a educational show for you today that's my dad jokes. It is a show about colleges and universities whether they should open. You may recall if you go back on the application, you'll find that we did an episode with our Duncan about whether schools should open for K. through twelve I. Think you'll still find that very interesting. Today we're focusing on colleges and universities, and as you know, we have college slash university incoming student who is part of this show so he will be a big part of this episode. Understand colleges universities as not just something that educates our kids and helps them become adults but understand them as businesses understand them as big businesses understand them as having enormous economic consequences packed in the communities in which they're located. And with that, we have the perfect gassed. His name is Scott Galloway he is a professor at nyu very much in demand. Scott has to podcasts of his own one is called the prophet show and the other is one he co host with Cara Swisher called pivot. By the way you can also hear Cara on this show who absolutely kicked my butt for a half an hour. If you WANNA hear Andy get his butt kicked I still hold that the last five minutes of cares wisher where some of the most golden part of the conversation that we've heard so far on corona virus and matched baby by Larry, brilliant and his episode. Anyway here's Scott. Let's bring him up. Let's talk about colleges and universities. Can guys hear me? As got. Handy how are you? Good. Thanks. You we've wanted to do episode about colleges and universities opening before it starts because it's such a complex and interesting topic we've done one on schools. And you're the perfect person to talk to. You ve written some very provocative things about colleges and universities at this moment whether they should open or not. I wonder if you can just start by giving the landscape, how many colleges and universities are there, how many of them are opening how many art and kind of what the profile of the process looks like for most of the school? Scott. Depending. On how you define call at somewhere between any twenty, five, hundred and forty, five, hundred whether you include online universities, four prophets, vocational schools. But in some there are thousands of universities. It's a huge industry that I believe employs about four million people. You know even just the four hundred thousand international students to come here spent about forty billion dollars in our economy and support something like four hundred, thousand jobs eleven million kids are supposed to show up as freshmen in the fall twenty five, million college students. So it's. It's an enormous industry and it's also. From a national perspective if you were to say what categories does America dominate alright software weapons media. Maybe former but right up, there would be education in almost any survey of the top universities in the world my almost any metric we kind of dominate the list. So it's an incredible silently a big industry. It's an important industry in a place that kind of a key national role in terms of the. Wealthiest most powerful people usually one thing in common and that is there's a good chance they're going to be educated in the US. So it's important economically, it's important from the brand us and it's also played an enormous role. In, our progresses nation right at spin this. Traditionally, it's of been if you say, what is the key to upward mobility income ability in the United States over the last? Fifty years a lot of people would point to education that's accessible to the lower middle income household. How many towns and cities across America rely on the college or university as a primary economic driver. So I don't know how many towns are but. There's gotta be. I mean on whether it's Lynchburg or Ann Arbor or Athens Georgia. You're talking about economies where sometimes forty to fifty percent. Of The employment is somehow connected to the university and That's where it gets kind of scary. Talk a little bit about your your wheelhouse is the idea of a small town, maybe not with a huge hospital, all of a sudden. Incurring an influx of tens of thousands of what could be a symptomatic carriers corona virus and you know these little college towns. Could be overwhelmed, but there's just no doubt about it. Some of these little towns are kind of one industry towns. So if you're a university president. You're right now or over the last few weeks and I think over the coming few weeks still. Facing an important decision or set of a sub decisions can you walk us through how university presidents at different types of schools large small those of big endowments with smaller? Cut It are thinking about this decision what factors have to consider and what decisions you see they're making, and then I think we'll get to your perspective. So I'll start with what I see them doing, and that is there in general putting out what I would argue are fairly strident bold statements around the the Brown President President? Brown Christina Pakistan said that we had national obligation to reopen welcome students back. and. I think that that Kinda hits you correct that universities are important. Young people continuing education is important but I think a lot of this is driven by what I would call the consensual hallucination between university leadership parents, students, and the finance department to these universities because. You have with a university it's it's an organization it's a business. You have exceptionally high fixed costs. The majority of the costs are incurred by the personnel. In many instances. The majority of that cost is made up with tenure professors. It's sort of an immovable object, an immovable cost and the maintenance of these facilities which have gone under under what I would refer to as the Great Rolex vacation of campuses where it's sort of a keep up Jones eight you know these places look more like the Ritz Carlton. Cameras than they do a campus. So you have exceptionally high fixed cost. You have a forty years where you could depend on the same amount of revenues coming in within two week period where parents sent in their deposits maybe plus four five percent and all of a sudden that's threatened for the first time in four or five decades, and you don't want to be captain, and that takes the ship down. So I think that lends to a lot of rhetoric around how important it is to open. In that, we're going to figure out protocols to ensure something resembling a normal experience. I think a lot of this quite frankly is is Latin for parents please send in your tuition checks. And I think where we're going to end up is what they will refer to as a hybrid experience in right now, the terms are using to describe that hybrid experience our labs and studios will be in person so if you're studying. If you're there's a large lab component if you're biochem or you're a music major, there's still this notion that we're going to have labs and studios. I. Don't think that's the case I think that university leadership are generally very responsible empathetic data driven people and I think all the data points to one thing and that is the downside risks of putting in a potentially symptomatic carriers in a room where the windows don't open mine. The majority of the windows don't even open classrooms because they do that for temperature control and all of these protocols that were trying to you know ABC class testing plexiglass the professor what is almost a Hazmat suit? Testing every day on campus temperature checks. My understanding is and this is your wheelhouse is that those protocols are only as effective as the protocols these students adhere to off campus. And when you're dealing with a population where for tens of thousands of years, every instinct in her body is pulsing that they should be not distancing. They should be forming relationships they should be finding you know mates or at least practicing, they should be establishing friendships and then you introduce our hall in by the way I think I think that the generation I know your son is thinking about is thinking about college I think that generation is generally speaking more responsible. Then our generation, you know lower drunk driving incidents lower incidence of teen pregnancy but. If. You just have ten or twenty percent that have something resembling the college experience I had. It sorta reads like the opening scene of contagion too. So where I think we're headed is once the deposits are in or not in there's going to be a more sober communication to parents saying look if you want to send your kid back to New Orleans, if you want to send your kid Ann Arbor Cambridge fine you have to assess your own risk for you and your family but we're not we're I think we're going to effectively pretty much closed the campus down I think university especially, the research labs have been warriors against disease and viruses and I don't think we're going to opt to be the enablers here. I think the the risks far outweighed the upside if your son is forced to move back into stick in his House for another twelve weeks stick in his room data nuisance for him. That's a you know an impairment for his college experience, but it's not profoundly tragic nineteen year olds have been asked to do worse in our history whereas the K. through twelve debate that sometimes get conflicted I think is a much more serious debate involves developmental disability. But where we're headed is I think once tuitions over the next and most of it is supposed to come in in the next kind of seven to fourteen days. I think you're GONNA see a lot of announcements along the lines of the following in an abundance of caution because of increased urges we're going all remote in some schools have already decided that. And typically the ones that have already decided that have done that because they can or say they, they've announced it. And it's all over the map. A Harvard can take an economic hit. They're going to be just fine. So they've said we're going to be mostly all remote. And then cal state, which charges seven thousand and seventeen thousand for in state and out of state tuition. Respectively, eighty three percent of their students are commuters such that they don't have this toxic cocktail of high dead poet's society experience with a very high tuition attached to it, which is kind of a danger zone right now. You know they're fine. Their value proposition is really not diminished if they go online and they were one of the first to announce their going all online because they're about education some certification, and you can get most of that in the online experience they're not offering sorta the leafy campus football game experience. So I think that's where most of us are headed I think some have been more forthright depending on their. Value proposition and how economically sound are. So this financial state that the schools are in, you talked about the impact on on university towns into reality that you know we don't often think about colleges universities as businesses but if you play out for us what happens with different types of schools if they don't come back if they don't get this revenue, how do they manage what happens to our higher education system? I think a lot don't manage I think you're gonNA see hundreds of universities begin the same sort of death march. The department stores have been on for the last decade. And that is if you are sort of toxic cocktail of the following. If you are kind of high to. Low certification meaning that you're a school that doesn't have the same kind of brand equity of a pen. but at the same time, you're charging the same price. This is one of the few industries where you can find a Hyundai for the price of Mercedes. Those schools are at risk and quite frankly I. think they deserve it I think every other industry faces a certain level of economic pressure. What industry garners more than one hundred, thousand dollar price tag over a four year period and most of these universities are getting more than one hundred thousand dollars over the four years. Operates it's sixty eighty sometimes ninety points of gross margin. and hasn't had any economic pressures. The last forty years a lot of the pushback I've got I've received my article isn't. You know they say they don't like the mythology and it's a responsible and I look at it and say, well, okay what industry? Has Not received some sorta scrutiny that's charging the fees you're charging what industry doesn't at some point have to cut costs and really examine their value proposition. So the elites pan is fine. They'll be under pressure to maintain their financial strength and they're going to just basically say you in almost kind of like mafia protection likely you. Trust US trust US where smart remote we're doing. Send in your deposits. The second tier schools will have to go really deep into their waiting lists. They'll have to cut costs, but they'll survive, but there's going to be entire swath of schools. Where parents rationalized making those types of payments distinctive. The fact they don't get a great certification or even you know we call world class education but they're still charging that Mercedes Price Tag. Those universities are going to go into their waiting lists and they're not going to have them because there's going to be this demand destruction the top a lot of people at elite universities. GonNa take a gap year. I'M NOT GONNA, go I wanNA reduction of fees that means they have to go deeper into writing, which means a lot of kids in tier two schools will get into tier one and then the tier three guys just don't have the waiting lists, they don't have the cushion. But quite frankly I think it's overdue I think this discussion I think the scrutiny I think universities exiting this self aggrandizement and arrogance where they think they can just raise their prices fasted inflation for forty years without ever kind of incurring reckoning I. Think it's overdue I actually over the long term I, think it's healthy. I think crisis is a terrible thing to waste and I'm hoping we don't waste this. And now, for something, we'd like to call advertising. Hey. It's me again. I told you that we would be having an ad free episode. So this couldn't possibly be an ad. Once again, we're just trying to remind you that we're running a special promotion this week for new supporting members, and if you sign up before August seventh to make a contribution of ten dollars per month or more, we will give you a coupon code to get a free in the bubble t shirt, and of course, your money will be coming to us. We'll be donated to code relief. Funds. Now, I know you hate these member drives as much as everybody else does. So please don't make me do this again. You'll get access to bonus content and other benefits. Of course in to sign up, go to www dot lemonade media dot com slash in the bubble that's www dot lemonade media dot com slash in the bubble and I'm so grateful for your support. China. Prize on this podcast is truth. As people see it honesty and Scott Man I just have got to compliment you and commend you for really just laying out at some really clear terms. But a lot of people don't talk about in a very truthful way whether people agree with you ninety percent ten percent one, hundred percent or not at all, you can't argue with the fact that you're putting forward a very clear perspective and I really appreciate that and I know people listen. So I'M GONNA. Give Zach and opportunity here. Zach you usually when you're arguments with me. So I WANNA take on Scott here and see what? You respond. Yeah. I was just hoping to ask a few questions of things that I'm hearing people. My Age are wondering about just like next year. do you think there's any scenario where colleges can tread a bubble sort of like with MBA's doing where students can do more of what they want to do as long as there's no cases coming in and out and just like there's testing and basically what is doing right now? Yeah I think it's possible Zach and the the NBA inching will be an interesting experiment but the you know as you can see with like the MLB, their experiment is just kicked off and we already have. Infections of the Marlins, the Yankees. So I think it's possible. I think it is feasibly possible that universities could pull this off. The question is in on a risk adjusted basis. Is that risk where taking? In that is I'd like to think that at some point we're going to have a vaccine or non pharmaceutical intervention such that you're gonNA get. Eighty to ninety percent minimum of the college experience at me and your dad had. But for this fall semester. When I see the surgeon cases When I see these small towns not really prepared for this. I wonder if it's worth the risk so I would say you know, can they pull this off down? Maybe is it? We're trying there. So you talk about this bubble, right putting everyone a capsule testing Ab test all these protocols I wonder if that time would be better spent trying to enhance the online learning experience and saying look I know the sucks but you're going to have to stay at home or door move wherever you want you're going to do most of your learning remotely or all of it. And we're GONNA cut tuition and a half. We're GONNA take a financial hit because we recognize it's not the same experience and we look forward to welcome you back hopefully and optimistically for the spring semester in January to me that feels like a more responsible. Waiting of. Health Interests Concern for the Commonwealth. And also recognizing that you know you need to make some progress, you need to have a productive fall semester. I just worry that the generation right now that seems to be the super spreaders of virus. Concentrating them in small areas, and then just hoping that our protocols are active a think the downside risk is greater than the upside so. Your Age, the present value of time is exceptionally high meaning that a semester sounds profoundly like a long time. I think in retrospect you're going to look back and say Yeah I got ninety percent of the experience I wish I'd gone hundred percent but I think you're going to get ninety percent and I think that ten percent. Erosion in the experience for you is compensated by the reduction in risk will incur if we continue to have this what I call consensual hallucination. That we should reopen campuses and we figure this out with protocols if the. Mlb can't figure this out with their resources and keep them my major league baseball. You're talking about thirty or forty people. I mean how many people aren't baseball team twelve or fifteen, and then maybe another eighty support them. So you're talking about an enterprise one, hundred, hundred people, and they haven't been able to contain outbreaks among these guys and I would imagine these guys. They have millions of dollars on the line I think they are distancing and doing their best, and if the Florida Marlins can't stop an outbreak. How the Hell is Penn insist. So I worry that this bubble strategy, the bubble is so expensive and so risky that the best bubble is for you probably to hang at home or in a safe place, do remote learning and get ready for the spring semester. For these expensive schools who say that might be in danger of not lasting through the pandemic. What do you think they should do because? Can they afford to reduce tuition and have their kids go back? Can they afford to keep tuition at the same price and risk losing students? Can they afford to take the risk of having a failed in person learning? What do you think they should do I think some of them should go out of business I believe in capitalism winners and losers and the outrage. I've heard the email from universities the senses that there's somehow these castles of -bility that should never be questioned. And I think there are a lot of universities who reflect and leadership reflect US level of arrogance and south aggrandizement that has resulted in a lot of these presidents writing me letters are making five, seven, eight, hundred, thousand dollars a year charging forty and fifty and sixty thousand dollars in tuition to middle class families and households putting them under extreme stress. So. You know welcome to the work week is what I would say to a lot of these universities the fact that they are for the first time in a long time falling under the same scrutiny almost every other anytime you go in and you by Coca Cola or you know if you're looking at a Volkswagen, you do an amazing amount of homework and you are constantly trading off the options and my sense is these universities just aren't used to a certain level of scrutiny where parents are asking for the first time. Are you worth it? Parents don't have a moral obligation essent checks to an institution just because it's a university and they've all talk themselves into believing that they're the church or something that there's some sort of higher obligation to these institutions. No, there isn't. They're wonderful but they need some competitions, some of them, some of them should and will go away and like every other organisation capitalist economy, they have two choices they can adapt or they can die. and. Some of them will adopt I would argue that rather than adapting like sports, redacting media's adapting restaurants are trying to adapt they need to acknowledge the issue and figure out. All right. How do we deliver a better experience for less money? That's what it comes down to a better experience for less money because this experience especially across the mediocre universities hasn't gotten any better than thirty forty years but my gosh has gotten more expensive. So This disruption is overdue. There'll be some innocent victims. They'll be some great universities that encourage incredible strain and the May go away. That's that serve at great social purpose. But I think this is how the sausage gets made in a capitalist society and I think that the university system comes out the other end of this hopefully stronger. What are professors feeling about the hybrid models that are APP pens doing a hybrid model i? Know a lot of different schools are doing hybrid models like what are what are professors thinking? Poland like it because they see it as a threat to their to the economic wellbeing. So and I'm boasting right now typically my fault I'm teaching the fall, my brand strategy class not second year MBA's, and it's usually Zach it's usually one hundred and sixty kids and the reason it's one hundred and sixty is that we're constrained by the number of seats in the classroom there's one hundred, sixty seats so they cap enrollment Roman and hundred and sixty? And I said to my administer, it's my leadership. I'm not coming on campus until there's a vaccine. And they said fine you can do all online then put me under any pressure to do anything I don't WanNa do but they said if you're going to teach online, can we expand your enrollments message? Sure I WANNA be a good citizen help out. So I have four hundred kids taking my class. Now, what does that mean? It means that there's two hundred forty fewer kids for other NBA electives. So kind of the dirty not. So secret factor in universities you'RE GONNA find about thirty percent of the professors at Penn teach about eighty percent of the students. With online if you will diminishing or loosening the supply up, you're going to see a ten ninety rule and that is ten percent of the professors are GonNa be educating ninety percent of the students nother ninety percent of professors who don't fall into that ten percent. We'll have increased pressure on them to conduct better professor generally evaluated onto criteria, their research first and foremost especially for tenure and tenure track, and then how good they on the classroom. When all of a sudden they're really teaching 'cause there's tremendous demand destruction for the other ninety percent and they can't justify their salary based on the fact they're not teaching kids at all anymore it puts pressure on them to do amazing research. So if you're a tenured professor making a good living with lifetime job security, you have a vested interest in the status quo. So anything that threatens. That whether it's online learning or having the skills a lot of these individuals average tenure professors, fifty five, a lot of these folks don't have the skills as evidenced by the fact that my guess is your dad needs you to kind of figure this whole technology out you've seen just huge resistance they're feeling is the status close working just fine and they're making a lot of arguments around. About the importance of education and development and the importance of the in person experience, which is all Latin for I like my life just the way it is. We talk a lot on this show we have at least about equity in privilege. The picture. I. Think you're painting at least for me is one where universities of high-quality like Nyu like Penn are available to more people because people can access them digitally if they choose and so the thing that like goes off in my brain is that there's another thing that parents and students pay for. That's almost a separate thing from how we think about the. Education and the certification which is sort of I'll call it a fall and spring for your camp. Is I listen to you? I think we all in our heads conflate these three things the certification you talk about the core education, and then this sort of you know elite privilege summer camp that many of us have I'll vast Masala Joe for and probably grow up. Telling our kids about. So you know I think what you know. Your suggesting forget right is that third thing is absolutely at risk right now at least for a period of time for the people who are privileged enough to have access to it but those first two things, the degree in education can get whole lot more equitable and a whole lot better in this process. Yeah I. think that's a great bucket of what's going on here and let me be clear. I don't in any way underestimate the importance in the luxury of having a joyous safe place to spill into adulthood I mean, Zach you're going to go to school. You're going to test your limits. I won't say this most kids your age go to school test their limits around alcohol they too drunk. They throw up, they test their limits. You're, GONNA get your heart broken but your heart's GonNa grow back stronger and you're going to be more resilient. You'RE GONNA find out that there are other really smart kids. You're probably the top in your high school class right now you're gonNA find out there's people smarter than you and it's going to create some humility. You're gonNA find out that maybe think should be a pediatrician. But. You're. You're not meant for that. You'RE GONNA find. You never would've thought interesting and you're gonNA find them fascinating and you're going to become more well rounded person. You're gonNA make life friendships. That is increasingly becoming the opportunity the accoutrements of wealth. and. We need to figure out a way such more kids can experience that. In terms of the economic health of our nation and opportunities for kids, we just need to provide more certification and more education more credentialing for just more kids. Because I. You know only third of kids go to college and a lot of people argued that maybe too many or too few. But if you think about our economy, our culture, our politics, it's dominated by people with college degrees and unfortunately it's not getting easier. It's getting harder to get into school but yeah, I in some Andy I think that was a really decent. Summary and where I'm hearing from his parents. That are disappointed and angry because their kids through grit. Through an opportunity of outstanding kids and economic privilege, their kid was about to experience that third thing they might have to delay that. Well, look you have sparked a national dialogue. And like I think many of the topics that relate to the pandemic, the one thing I finally they have in common is they are things that extend. More, deeply into our social system and how we live than just the pandemic they. In fact, expose questions we always should have been asking but haven't had the impetus to and you're the catalyst for this. So we'll appreciate you coming on in the bubble and sharing what's going on your bubble with us. Thanks so much and Ian Zakho go pen it's going to be an incredible experience. Oh my gosh. To be a talented handsome young man heading to Pat I wanna be you well done you're GonNa have a great a great for years. Yeah. Thanks so much for talking to US answering questions. You're welcome. All right. For many of you, it's still Monday which means that Wednesday we have. Another episode coming and it is a good one. It is with Andrew Yang former presidential candidate gang leader. Again, that's a dad joke. And a around, very interesting guy who has ideas that are really resonant in this time for how to get the country through crises like this he's got a lot of fans. And if you know people are fans of his have them check in and listened in the bubble and then next week we have Reverend William Barber who is one of my? Very favorite people. I. Encourage you. If you have not heard Reverend Barber to just go onto youtube and play one of the recordings from one of his many speeches he is phenomenal. We have a lot to talk about with him and then Wednesday we have Connie Schultz and Sherrod. Brown. They're a married couple in Ohio. Tiny is a fantastic journalist. Shared is the senior senator from Ohio and we're GONNA. Maybe have a little bit of a four-person Calvin goes around around the country will try to create a model event with Lana and me maybe we'll let Zach have a sip of alcohol beer or something like that. Anyway. Enough for me. We had a great next. We Come I. Hope You have a wonderful rest of your week and over an hour. Thanks for listening in the bubble. Hope you rate is highly where production lemonade media krispies our producer Ivan Karev there editor Jessica Code over Kramer Stephanie. WOODALL'S WAX executive produced the show and run our lives. My Son's act. Slavic is my cool co host and onsite producer. Our theme was composed by Dan, lobb and our hill with additional music by Ivan. You can find out more about our show on social media at lemonade media and you can find me at. On twitter or at Andy Slavic on instagram. If you liked what you heard today, please tell your friends to come listen Patel distance and for now stay safe fearsome some joy and we will get through this together and Hashtag stay home.

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