Kodak - Just A Pump 'N Dump Scheme?

When someone can't tell you what their business model is in ten words or less, watch out.

In the last few months, I have received a number of emails from readers asking me about Kodak stock. This tells me that somewhere on the internet, someone is hyping Kodak stock as some sort of get rich quick scheme.

I was born in Rochester New York, the hometown of Kodak. My Dad was an executive at a company called ITEK, which some wags said stood for "I Took Eastman Kodak" because of some disputes over intellectual property.  I think they made high speed cameras for U2 spyplanes or spy satellites or something along those lines.

Back then, Rochester was a company town, and the company was Kodak. They were the six hundred pound gorilla in the camera business and film business. It wasn't until the 1970s that Fujifilm started to take hold and take over a larger and larger share of the market. Kodak's misadventure into instant cameras ended up with one of the largest patent infringement lawsuits in history, and really set in motion the modern patent era.

But digital cameras were the downfall of Kodak, even though Kodak offered its own line of digital cameras (which apparently were not very reliable, although I had two of them).  Smartphone cameras were the nail in the coffin.  It seemed to happen almost overnight. Suddenly the Fotomat booth disappeared from the strip malls, and the local drug Store stopped selling and developing film. Film cameras went away rather quickly as digital cameras became easier to use and had longer-lasting batteries and higher resolution.  Kodak declared bankruptcy.

The company reorganized and today they are doing... I'm not sure what they're doing. In fact, when some people tried to explain to me what Kodak does for a living, and they couldn't explain it to me in ten words or less, I knew something was up.

This Wikipedia entry says that:

Kodak provides packaging, functional printing, graphic communications and professional services for businesses around the world. Its main business segments are Print Systems, Enterprise Inkjet Systems, Micro 3D Printing and Packaging, Software and Solutions, and Consumer and Film.

I am not sure what any of that means, only that it sounds like a pretty competitive number of businesses they are in, that don't seem poised to take off like a rocket, in terms of profitability or everyone having to have their product.  Film is dead.  Printing is dead. Paper is dead. These are dead and dying businesses with no spectacular future in them.  About as exciting as selling PC's these days.

This isn't the next Microsoft or Apple, but rather a rather typical commodity business.  The P/E ratio and earnings per share are nothing to write home about.  Why on Earth would anyone hype this stock? It is about as exciting as General Motors.  They make things - commodity items that other people make as well, at very competitive prices, with very narrow profit margins. There is no secret sauce here, no "moats" as Warren Buffet would like to have, no.... nothing.

A couple of years ago at the height of the Bitcoin madness, Kodak announced they're going to get into cryptocurrency.  I never heard anything more about that, but it did cause the stock price to spike. One wonders whether or not the announcement about getting into cryptocurrency was strictly for the purpose of jazzing up the stock price at the time.  One wonders....

Today, Kodak is a subject up some controversy as they supposedly got a huge loan from the government to produce "drug ingredients" whatever those are, which seems like an interesting thing for a former film company to be doing. But apparently, prior to the announcement of this government largess, the stock started trading rapidly which totally reeks of insider trading.

Now it remains to be seen whether they get this government loan or not, or whether they intended to get it all along, and perhaps the whole purpose of the thing was just merely to manipulate the stock price.

Like I said, when several readers asked me about Kodak stock and whether it's a good investment, I get suspicious that something was up - and that something may be stock manipulation and a pump-n-dump scheme.  I don't give stock tips here and I don't suggest that people invest into things that are hyped on the Internet or on a financial channel. Usually, after something's gone up in value, it's too late to invest in it. Also, the people who are hyping these stocks are the ones who are buying them before you do and making a lot of money off of you.  If you hear about some investment on television or the Internet, chances are, it is too late to invest in it.

UPDATE 2021:  Here is the stock price from 2020 (when I wrote this blog entry) until today.  As you can see, on July 29th, the stock price peaked at $33 a share, and then went back to languish in the sub-$10 range, where it remains today.  Clearly somehow this stock price was manipulated, and it was no coincidence that several readers (or "readers") asked me about this stock at that time.  Someone was hyping this stock!

* * *

One thing is clear:  In recent days, someone made an awful lot of money selling Kodak stock for as much as $33 a share, when it was trading days before at $5 a share.   And the people who bought at $33 a share, are now looking at a 70% loss on their holdings.  This has all the hallmarks of a classic pump-and-dump.

These recent events make me wonder whether Kodak exists simply as a placeholder for other people's fantasies.  In other words, it's just a pump-and-dump company whose stock price can be hyped with the announcement of some new product or new government contract, regardless of whether they follow through with any of this.  Or it is possible outsiders are using the company as part of their own schemes.   Maybe someone in the Trump administration leaked out this loan information - Eric!

If that's the case, then it is the perfect modern company for Trumpian America - a company with no substantial business plan whatsoever other than to make money for the insiders by manipulating the stock price.

It's sort of like Enron, only without the energy.

UPDATE 2023:  There is money to be made in these old rust-belt companies in Central New York and the midwest - in manipulating their stocks!  Kodak isn't about to come roaring back to life with some new "must-have" product - that rarely happens ever, in the marketplace, but it doesn't stop the stock manipulators from selling "The Next Big Thing!™" to the plebes.  If you look at the history of Kodak, post-bankruptcy, you can see there isn't a lot of "there" there.  In fact, they are losing money and a second bankruptcy (and maybe liquidation this time) might be in the cards.

Stop believing in "The Next Big Thing!™"

If you read the Wikipedia entry for the company, it seems in post-bankruptcy their only real business is in supplying film stock to the motion picture industry.  How long that will last in this digital age remains to be seen - digital imaging is far cheaper and more flexible than film - and most "film" is reduced to digital images when shown in movie theaters.

The other "businesses?"  Mostly licensing the trademarks or their stupid venture into "crytpo" which rightfully went nowhere (and sounds scammy to me!).   Before going backrupt, Kodak "borrowed" millions from KKR, so I presume in Chapter 11 bankruptcy, they became major shareholders.  If you are looking to see who might be manipulating the share price.... there's a place to look!

Post-bankruptcy

On March 12, 2014, Kodak announced that Jeffrey J. Clarke had been named as chief executive officer and a member of its board of directors.[143][144][145] At the end of 2016, Kodak reported its first annual profit since bankruptcy.[146]

In recent years, Kodak has licensed its brand to a number of other companies. The California-based company JK Imaging has manufactured Micro Four-Thirds cameras under the Kodak brand since 2013.[23][147] The Kodak Ektra, a smartphone, was designed by the Bullitt Group and launched in 2016.[148] Digital tablets were announced with Archos in 2017.[149] In 2018, Kodak announced two failed cryptocurrency products; the cryptocurrency KodakCoin, which was developed by RYDE Holding, Inc.,[150] and the Kodak Kashminer, a Bitcoin-mining computer which was developed by Spotlite.[151]

In 2016, the Kodak spinoff company eApeiron was founded with assets acquired from Kodak and an investment by Alibaba. The company's mission is to eliminate “knock offs” and promote authenticity.[152]

Despite the pivot to digital technology, film remains a major component of Kodak's business. The company continues to supply film to the motion picture industry after signing new agreements with major studios in 2015 and 2020.[20] In 2022, Kodak announced it would hire new film technicians after film photography experienced a revival among hobbyists.[21][153]

Just Say No to Podcasts!

The printed word is slowly dying.

I mentioned before in a 1951 edition of Galaxy magazine, Ray Bradbury published the short story called The Fireman. This later on became the novel Fahrenheit 451 which was later made into a movie.

In that dystopian future, books would be outlawed, and since houses were all fireproof, fireman would have the job of burning books if they were found in someone's home.

Printed words were deemed seditious and dangerous. People absorbed information through audio and visual means only. The only printed documents were basically comic books, or as they call them today, graphic novels.

By the way, those early editions of Galaxy magazine were pretty fantastic. Authors like Isaac Asimov, Ray Bradbury, and others contributed to the magazine, as they only requested first publication rights and allowed the authors to retain subsequent publication rights for their works. You can read and download these documents for free at the links I have provided above. Classic science fiction - for free on your phone - itself science fiction, when I was a kid.  Handheld computers - amazing!

But getting back to our topic, it seems frightening to me that the predictions made by Mr Bradbury in 1951 seem to be coming true today. Newspapers and magazines are going out of business one after the other. The book business is struggling as bookstore after bookstore goes under. The few books that are published are sensational tones by celebrities or someone who landed a plane in the water.  Or there are books written by  people willing to do an exposé on political figures. Or the political figures themselves writing a book which is a thinly-veiled grab for money. Conservative think-tanks buy 500,000 copies of some politician's book and liberal think-tanks do likewise for their people. It's just a way of legitimately(!) transferring money from one person to another.  No one actually reads this crap, anymore than they read Healthy Holly.

Most people get their news from CNN or MSNBC or Fox News via cable television or online.  Few people read newspapers anymore, and more and more newspapers are resorting to video features on their online feeds.  They know from what we click on, what we like, and what we like is simple narratives, even if false, fed to us by spoon.

The few books that are left are sold as audio books to listen to while driving your car. People no longer blog, but rather v-log, where they stare into the camera on their laptop and drone on for hours about topics.  If they become successful enough, they can do a podcast, where you download some audio feed where the person again drones on and you listen to him.

What's wrong with this, and why is it different than print media? The thing about the printed word is so you can stop and analyze things, one idea at a time. You can re-read a sentence to see what the meaning of it is. And if you don't understand something, you can stop reading and do research either through the encyclopedia, the dictionary, or online.  It is much easier to critically evaluate things as you read them, and a lot easier to spot bullshit.

If you try to push a one-sided story, for example on Dateline NBC, it is a lot easier to do.  You can snooker people by doing long-winded introductions to induce sympathy for a murderer or other criminal, before they drop the bomb on you.   In a printed story, you can spot the bullshit much more easily - because the basic facts of the story are buried.   Well, at least astute people can spot it more easily.

I don't know how many people I've met who've told me they think some murderer is "innocent" because they saw some show on the Internet or Cable TV.  He had fetal alcohol syndrome!  His Father beat him!  He had a rough life!  Lost in the shuffle is the victims of these gruesome crimes, who are tried in absentia and found guilty of their own deaths.  These stories have great ratings and sell eyeballs, so producers keep producing them.  They are little more than propaganda pieces.

With a printed story, you can just stop and digest what you read, and think about whether it makes any sense. But when you listen to something or watch it on the television, it's jammed down your throat at the speed dictated by the author.  You have no time for reflection or analysis of what was being said. Moreover, you can't fast-forward through the boring parts and skim over what you don't want to read or what you think is superficial.  You have to accept what they say at the rate they say it.

The audio word and the video word are much better suited to propaganda and indoctrination. The printed word is far less so. I mentioned before that after the invention of radio, or more specifically broad-casting as envisioned by David Sarnoff, the world became enthralled with various dictators and strong-men.

It was not by accident. Benito Mussolini, Hitler, and Tojo came to power around the same time.  They could reach a mass audience through radio.  Even President Roosevelt, who was elected four  times to office, knew that his fireside chats could reach a mass audience more effectively than the printed word.

Today, we see the same sort of pattern - people are abandoning the printed word for video and audio and coincidentally, we are seeing a rise of a new generation of petty dictators, worldwide, who use these new video and audio media to project their crazy ideas.

The only time they stoop to communicating by the written word, is to send out slogan-like phrases via Twitter. Twitter, while technically the printed word, doesn't allow for any analysis or in-depth parsing. Instead, cheap phrases and cheap shots are flowing out at lightning speed to be digested instantly without any critique.  Tweets are little more than T-shirt slogans, bumper stickers, or sound-bites, and such slogans were also the favorite of dictators in the past, from Fascists to Communists.  Workers of the world, unite!

Long-form articles are falling from favor, simply because people refuse to read them.  The most popular phrase on Reddit is "TL;DR" - itself a shorthand for "Too Long, Didn't Read".  Since everything is online today, publishers know exactly what people are reading and not reading, and long-form articles don't get read, which means they don't get click-through revenue. Thus, long-format is slowly disappearing.

More and more, I see news articles that are only available as videos which I have to download on my phone. And often these videos won't download on my phone if my connection is kind of iffy. So there becomes this digital divide between those who have high-speed internet and those who do not.  The most well-connected in our society are often the least well-informed.  500 Channels of cable, the latest smartphones, the best data plan, and high-speed internet, and yet they are voting for Trump.  The worst sort of hovels and trailer homes have three or four satellite dishes screwed into the sides of them.

As I have noted before, we've been cutting cords one by one.  Cable TV was the first to go.   Internet service - via cable, fiber, or phone line, was next.   We still have service through our phones, but increasingly, we are downloading less and less.  It seems just last month, YouTube decided to up their advertising content by a factor of five.  It is painful to watch YouTube anymore, which is why I stopped watching it.   Others have a higher threshold of pain.

On the whole, I don't think I'm missing much. Most of these news videos are very superficial, along the lines of a nightly news story. As I noted before in The Nightly Nooze, the 22 minute format of your typical news program provides for a little information. The news anchor reads the entire story and then cuts away to a local reporter who is maybe three countries away from the incident. They basically repeat everything the anchor said, and then says, "Back to you!"

Again, there's very little time for reflection or analysis. The information is flowing at you at the speed of light - you either have to accept it or reject it. And there's very little room for embellishment or nuance either.

Some readers have sent me articles that they thought might be of interest to me . And it's interesting to read some of these articles. But some of these articles are V-logs or podcasts or YouTube videos which are tedious and take a long time to watch - some a half-hour or more!  I can read a lot faster than that!  Oftentimes, the producer of these videos spends 20 minutes saying something that could be said in five. And it gets very frustrating, waiting for someone to get to the point. It's sort of like listening to a Rush Limbaugh broadcast, where he keeps saying he's going to come up with all this devastating information about Hillary, but first he has to cut to a commercial to sell some of his neckties. By the time he comes back, he's forgotten all about Hillary and moved on to something else. All you're left with is a feeling that Hillary is somehow a bad person but you're not exactly sure why because Rush never told you.  Perhaps this is by design.

A lot of these video bloggers and podcasters are the same way. For example with regard to our little home island, people drone on and on in long videos about how the Federal Reserve was founded at Jekyll Island and this is a horrible thing. But they never say explicitly why it is such a bad thing only imply it over and over again.

It's the old Hitler technique of, if I say it three times it is true.  Create a background Greek chorus of voices saying things are bad or people are bad, and pretty soon, folks believe it - it is a baseline belief.   Jews are causing all the trouble in the world!   How, exactly?   Well, I can't explain it, you have to listen to Hitler's podcasts, though!  He makes it very clear!

To be sure, there are still a few print periodicals out there - although most people read them online.  But the few that remain have become far more slanted in their coverage - propaganda pieces for the Left or Right.  And although I have no scientific data, it seems that the length of the articles is shrinking over time - while advertising space is increasing.  And as I noted before, even staid old-line newspapers have videos on their websites these days.

Video, one would think, would be compelling. After all, it provides eyewitness views of an incident. The Vietnam War was the first really televised war, and yet, most Americans had polarized views about that war.  If you watched Walter Cronkite every evening, and saw the videos from the war zone - as well as the nightly "body counts" - you would think we were winning that war.  Yet a whole generation was convinced otherwise, and of course, we weren't in fact winning, and it doesn't look like we would have - failing extreme measures.  And the side we were fighting for (the Catholic Church, essentially) wasn't even popular with their own citizens.

Video can be incomplete or hard to figure out.  The Ahmaud Aubery video, for example, goes out of frame at critical moments, and starts at a time long after the men involved started chasing him around the development in pickup trucks. Depending upon your preconceived notions, you can read whatever you want into the video - that Aubery struggled to take the gun away (as the initial encounter occurs out-of-frame) or a lynch mob set out to murder a black man.   The video doesn't solve much, although without it, perhaps no one would be charged.

But video can be edited and modified to suit the ends of the publisher.   These "deep fake" videos are a more modern example, and very concerning.  What is concerning is that people believe them, even after they are exposed as fake.  But even before this sort of electronic trickery was invented, there were simpler ways of manipulating video - by editing start and stop times, camera angles, and what is and isn't viewed. Or, as with the "Collateral Murder" video put up by the Russian-backed Wikileaks organization, you can edit the video into segments, combine it with audio from other segments, and then put captions on each scene to tell people what they are seeing so as to frame a narrative.

Video, as it turns out, doesn't solve much.  In some cases, it is no better than "eyewitness" testimony.  I think that if there was security camera video of OJ Simpson murdering his wife, he still would not have been convicted.   People see what they want to see.  I watch (or used to watch, before all the ads) dash-cam videos on YouTube.   Some young kid races along through city streets doing 50 mph in a 30 zone, and when someone pulls out in front of him, he laments that it was "the other guy's fault" for the inevitable accident and the video "proves" it - after all, causation!

In short, video will show you want you are predisposed to want to see - and can be easily manipulated to make you see what they want you to see.

The other problem with audio and video versus print is that it takes time and money to make compelling video and audio presentations.  A professionally produced video takes about 10-50 minutes of time, in shooting, editing, and post-production, for every minute of resulting video.  And that's being conservative.   Unless you just point-and-shoot with your cell phone and upload "raw" video to YouTube, it can take hours to create just one five-minute video and do it well.

So video and audio channels favor deep pockets.  The more money you have to spend on a video or audio production, the better and more compelling you can make it (and the better it is for propaganda). The written word, on the other hand, is far more egalitarian.  It is a lot harder to respond to a piece on the "evening news" - particularly after the FCC got rid of "equal time".    But anyone can write a "Letter to the Editor" and in fact, newspapers encourage this, as it is cheaper than hiring their own staff to write.

Of course, I am ranting against what undoubtedly is the future.  We will become a more and more video and audio society as time goes on.  Already many products you buy don't come with instruction manuals, but rather a bar code that links you to an unboxing video (what the ever-loving..?).  Pretty soon, documentation may be entirely obsolete.   Perhaps.

In the meantime, I will fight the trend, if only because I don't have a half-hour of my time to waste, waiting for some podcaster to get to the ever-loving point.  It is like listening to these "Zoo" guys on "morning drive time" - they talk an awful lot, but never seem to say anything - of merit, anyway.

TL;DR - Podcasts suck!

Apologists for Communism

Yes, the crash of the Venezuelan economy was not 100% due to its Communist government.   But does 99% make it any better?  Thank God we don't have murals like this of Trump!

An interesting article argues that "socialism" is not to blame entirely for the predicament Venezuela is in.  Once one of the richest countries in the world, today it is one of the poorest.   And yes, you have to calculate these things on a per capita basis.  The authors of that article use overall GDP to argue that Venezuela wasn't that well off during its heyday.  That's a small lie - and you know about how liars work.

But the big lie is in boldface in the article.  The author admits that the Maduro and Chavez governments basically destroyed the Veenzualan oil industry through utter ineptness. Since the country was a single-industry economy - oil - destroying the oil industry destroyed the economy.  Yes, the collapse of oil prices over the years has been a huge factor as well, but even with such a decline, an efficiently run oil business would have supported the economy in that country.

But further, according to Foreign Policy magazine, Chávez, and those he appointed to run Venezuela's oil monopoly, knew little about the nation's biggest industry.

“He was ignorant about everything to do with oil, everything to do with geology, engineering, the economics of oil,” Pedro Burelli, a former Petróleos de Venezuela board member, told the magazine. “His was a completely encyclopedic ignorance.”

In 2010, ahead of an upcoming election and as the global price of oil fell, Chávez announced he was decreasing the value of the bolivar, the nation's currency. It was worth more than the U.S. dollar but dropped after Chávez's decision, then continued to plummet. 

They have more oil than Saudi Arabia - and you don't see people starving there, do you?  Devaluing the currency and having "official" prices for food (and a thriving black market) are common tactics that Communist countries use - tactics that economists (and history) have shown are always doomed to failure.  Again, the marketplace is not an artificial construct of man, but our default mode of operation.   You cannot decree what prices are in the market, without distorting the marketplace.

What irks me is that the author of the article is going out of his way to minimize the excesses of the Communist regime and maximize other influences. It is, in short, a propaganda piece.  I was shocked that he didn't blame Yankee Imperialism - after all, that is a common tactic of South American dictators of all bents.

If this was something on the opinion page, fine.  But MSN is calling it a "fact check" which sort of puts fact-checking in a bad light.

Gold, Again???

Every time there is a financial crises, gold shoots up in value.  And every time this happens, little schmucks like you and me buy it at the height and ride it all the way down.  People who bought at the last peak, nearly a decade ago, are just breaking even today.   Was that a good investment?

I have written about gold again and again.   It is a great "time machine" investment, because if you had a working time machine, you could go back in time a few weeks or months and buy it and make a lot of money.   If you don't have a time machine, you are usually screwed.

The problem with gold is that when it shoots up in value, the press reports it, and the "retail investor" (read: chumps) see this and say, "Gee, something has gone up in value, I should buy it!" - not realizing that the time to buy was before it went up in value.   Again, the time machine conundrum.

And like clockwork, the gold bugs come out of the woodwork and say weird stuff about gold - that it has inherent value or that it is somehow "different" than other metals such as aluminum or zinc.   At one time, though, Aluminum was far more valuable than gold - because economical ways of processing it didn't exist.   If you could go back in time (again, the time machine problem) to 1880 with a six-pack of bud light (in cans, of course) you could make a minor fortune selling the empty cans to Tiffany's (beats that 5 cent refund!).   Today, we consider those cans to be disposable.

And like clockwork, some "analyst" will say that gold is going to go through the roof, based on.....pulling numbers out of his ass.  The last time around, it was $5000 an ounce.  Today, they are being more modest, claiming $4000 an ounce.  Bear in mind that at a production cost of $500 an ounce, this is quite a staggering figure.  At those prices, it would worthwhile to distill gold from seawater as the Germans did after WWI to try to pay back their war debts.   Yes, gold is present in seawater, along with many other minerals, in tiny quantities, of course.

Will gold go to $4000 an ounce?  Well, it never went to $5000 like they said it would.  But someday, for sure, it will, if not just due to inflation.   When that someday is, is the question.

What will attenuate the price of gold is that when the price goes up, people seek out more of it - that old supply-and-demand thing.  The last time around, intrepid gold hunters found some in my Mother-In-Law's jewelry box, while she was having dialysis (never tell the lawn guy you're going to be out of the house every Tuesday for four hours!).   They were reopening gold mines even in the Carolinas, and of course, destroying acres of jungle in Brazil.

In the short term, yes, it is likely gold will go up in price, but not in value.   Small investors - the "gold bugs" drive the market, and the current prices don't necessarily represent the value of gold, but only what the last chump who bought is willing to pay.   So Joe Chumpster sees articles like the one I linked above, and jumps in with his $500 "investment" in Gold.  Gold goes up a bit, and he congratulates himself on being a genius.    It then peaks and drops a bit and he says to himself, "Don't  panic - it is just a market adjustment, it will come back!" and maybe it does.   But since he bought at the peak, it doesn't "come back" for a decade or more.  Meanwhile, they money invested in a mutual fund would have doubled in value.

How do I know this?   Look at the chart above.  The same damn thing happened ten years ago, when we had the last recession.  It happened in 1972 with the Arab oil crises - and didn't "come back" until the late 1970's.   It happened in 1980 with the stagflation recession - and didn't "come back" for nearly two decades.   Even factoring in these sudden rises in the price of gold, it doesn't outperform the rest of the market, and in fact, under-performs it.   In many cases, it under-performs stuffing money in your mattress or burying it in a coffee can in your back yard - two other crazy things that gold bugs like to do.

So no, once again, I will shy away from parking money in a commodity such as gold.  You might as well buy zinc.  It's a metal, and has more industrial uses than gold, too!

The Cult of Smart?

Those blue-collar middle-class jobs didn't go off to China - they went off to Wall Street.

This picture has nothing to do with this article, but I met a nice couple whose family runs this resort in the Philippines.   I have to go there!

It isn't often you read someone at the National Review praising a neo-Marxist for a book he wrote. The book in question is "The Cult of Smart" and it examines how we now value (or over-value) academic achievement and a college education as the sole criteria of one's worth.   Well, maybe that is an overstatement, but it sort of sums it up.  Of course, folks at the National Review and Neo-Marxists have something in common - neither are very smart, which is likely why they denounce this "culture of smart".  Then again, a stopped clock is right, twice a day.

I have written about college before - many times - and how it isn't for everyone - but is being pushed onto everyone on the premise that "statistics show that people with a college education make more money than those who don't" - a premise that shows its own folly, as anyone who took and understood a class in statistics in college can see the obvious flaws in that argument.  First, it is backward-looking, based on data from the 1960's through the 1990's.   Second, it confuses correlation with causation.

Statistically, there is a correlation between people who own a Ferrari and wealth.   People who own Ferraris tend to be in the top 1% of income for the country - perhaps the world.  So the answer is obvious - to any Bernie Sanders supporter, that is - we need to provide everyone with Ferraris and then everyone will be wealthy!

That sounds ridiculous because it is.  The costs involved would be staggering, whether they were paid for by the government or by the individual.  If by the government, well, it would bankrupt the country in short order.   If individuals were forced to pay, people would spend the rest of their lives paying for such a fancy car - which would end up in the junkyard long before the loan payments were finished.  And an exotic car like a Ferrari isn't practical for most people - it is as useless as, well, a degree in philosophy, for example.  What's more, when everyone has a Ferrari then they are not an exclusive car anymore, and thus they are no longer worth anything to anyone.

It is a tortured analogy, but I think apt.   Students today are exhorted to go to college, rather than explore other options, such as vocational training, starting a business, or whatnot.

In the small town I grew up in, we had "businesspeople" who owned and ran the local stores, as I recounted before.   The local pharmacist owned and ran the pharmacy.  The grocer owned his own grocery store - although affiliated with other "Independent" grocers as part of the Independent Grocers Association (IGA).  The local auto parts store was owned by the guy behind the counter, even if he was a NAPA franchisee.   The guy pumping your gas and working on your car owned the local gas station.  And these folks all did business with the local bank, which was part of a local chain. 

The clothing store was called McLaughlin's - because Mr. McLaughlin owned it.   The "Chocolate Shop" (yes, just like in Archie Comics) was the local diner where everyone went for hot coffee and local gossip.    The sewing store was owned by Peggy, who liked to sew.   The motel wasn't part of a chain, or one of 50 owned by an Indian family, but owned by a local.   It didn't have a fancy name or sign or anything - his family had been running it since the 1930's when it was called the "Tourist Cabins" on Route 20.

And the farms - all locally owned as well.

Those jobs were all entrepreneurial in nature, and often handed down from generation to generation.   You needed to study "business math" which was taught in our High School - and have a modicum of common sense.  But college?  Studying the "great authors" or getting a degree in "Business Administration?"   Not really necessary or cost-effective, although college was a "way out" for many who didn't want to take over the family business.  Or it was a way for the rich kids to park themselves for a few years, and find a spouse, before they inherited from their parents.

What happened to those no-college jobs?   Well, today, the Chocolate Shop is gone - a victim of the McDonald's that opened up in a new strip-mall outside of town.   The pharmacist couldn't compete with the colossus that Walgreens and CVS have become - or the pharmacy department in the new chain supermarket - which may be a Walmart.   The auto parts store is gone, replaced by competing Autozone and Advance autoparts stores.

And so on and so forth.  These jobs didn't get shipped off to "China" - they were lost to the corporate boardroom and Wall Street, who has taken small business and turned it into big business, or at best, a franchise "opportunity" where the rug will be pulled out from under you the moment you make dollar one.

This is not to say that such opportunities don't exist anymore.  Smart folks can still run a business and make a lot of money - often without a college degree.  The millionaire next door may own a laundromat or a self-storage facility or a chain of car washes.  Such folks still exist, like the young (30's) man I met who owns two gas stations, after owning two Subway franchises - and he's still on the prowl for new opportunities.   Entrepreneurship isn't dead - but you don't often see college grads with that kind of fire in their belly.  College extinguishes that, and replaces it with a sense of entitlement.

The kids of these merchants are exhorted to go to college.  They return home and cannot find a job with their useless college degree in Advanced Nonsense or Agitation.   So they work for the new chain store, behind the counter and maybe eventually as a manger - the same chain store that put their Dad out of business.  But of course, while Dad made enough money at his small business to raise a family, and had a job his whole life, these new businesses pay little, and don't expect loyalty from their employees, who are replaced regularly, as the whole thing is designed to run by computer on auto-pilot.   You can't pay people to give a shit at jobs like that.

Perhaps the move to nationwide competing chains was inevitable.  Like the vertical distribution system in Japan, much of the work involved in these distribution chains and small Mom-and-Pop shops was indeed make-work.  You can't fight progress, as they say, and the rise of the nationwide retail chain wasn't something that anyone could stop - or should have.   Of course, these same chains are struggling today, from overcapacity, debt burdens, no one giving a shit, poor products and quality, and of course, Internet shopping.  No one feels bad when an Applebee's closes its doors.   It was never our "neighborhood" grill & bar - that's just a corporate slogan.

So change was inevitable, and the "solution" touted was that everyone would go to college and get educated and make lots of money and it isn't working out as expected.   As demand for college increased, so did the price of college (something anyone who studied economics in college should understand).  And since people were clamoring to get in - even bribing their way in - the colleges had zero incentive to cut costs to remain competitive.  Prices spiraled out of control and quality suffered.

Compounding the problem was that the customer base was 18-years-old and clueless - the kind of people you can sell poorly made clothing to, if it has the correct logo on it.

The problem with "the culture of smart" is the same as the Ferrari scenario I outlined above.  Not everyone is going to benefit from owning a Ferrari.  In fact, most people wouldn't know how to drive it, take care of it, nor afford the maintenance on it.   A pickup truck might be more useful for a lot of people - something that they can use to make money rather than just a financial albatross around their necks.   Of course, with cars, you can trade-in the Ferrari for a pickup truck.   College educations can't be returned for a full refund.

Yes, it is true that we live in an increasingly technological world, and technological skills and an advanced education are one of the ways to climb the economic ladder - or increasingly, just to hold onto it.   When I was a kid, being an Engineer or a Doctor or a Lawyer was a way of getting into the upper-middle-class, if not the upper classes.  Today, it is a way of staying in the middle class, and perhaps even that is slipping, as more and more people flock to the professions to try to grab the brass ring while it is still available.

Yet, there are many "technical" jobs out there that are unfilled because no one wants to work them.  Many of these jobs didn't exist just a few years ago.   The local electrician or construction worker mourns their job loss.  The guy at the steel mill was laid off.  But yet, they were hiring like mad (emphasis on "were") in the fracking fields, and a smart young man who put aside money could end up with enough to retire in just a few years.  Sadly, most young men are not very smart, and instead of saving, spent it all on motorized toys.

I see kids living in their parents' basements, spending their waking hours playing video games or trying to hop-up their aging hand-me-down Honda.   Yet the idea of getting a job at the Honda dealer working on Hondas is alien to them.   They are above all that!  Once Bernie is in power, no one will ever have to work again!  Robots will do all the work and we'll all get free money!

Where do they learn this crap?   Oh, right, in college.   They graduate "too good" for manual labor, so they take crappy jobs and act as though the work was beneath them.   No wonder they are so depressed.

The "Varsity Blues" cheating scandal is a symptom of this whole mess.  Parents are scared-to-death of a bounce-back kid, living in the basement, collecting swords and guns, and leaving dirty dishes in the sink and borrowing the car and returning it with an empty fuel tank and roaches in the ashtray.  So they do whatever they can to make sure "Junior" goes to college so he can get a job!

But the weird thing is, sending a kid to college - any college to get just any old degree - is one sure way to insure that you will have a bounce-back kid.   Once saddled with student loan debt, a useless degree, and an attitude that nothing less than the corner office (to start with) is "good enough" for them, they will have few other options left in life, other than to borrow your car and Dad's lawnmower gas, to make Molotov cocktails to throw at the Police in some black neighborhood in the distant city.

College, for me, was a fourteen-year experience.   And during that fourteen years, I had a chance not only to learn a lot of things out of books, or from learned professors, but in terms of  "hands on" experience, working at companies, in factories, law firms, and the Federal Government - all of who generously helped pay for tuition.  I wouldn't trade it for all the Harvard degrees or a Rhodes scholarship (wasn't he that racist dude?).   Because classroom learning is fine and all, but you learn so much more about life and work and careers and people, when you actually interact with them in a working environment.   And I learned to do things with my hands, as well, from banging sheet-metal to welding to plumbing, wiring, programming computers to - well, whatever, including typing and how to write (for better or worse).   Not only were these useful skills, they helped me understand how things work as well as how hard it is to do some things.

Today, we graduate "management" students, who, like my Dad, have a lot of theories about how to run things, but little hands-on experience as to how things actually work.  They manage by edict, and often their instincts prove to be fatal.  It is easy to tell a person how to do something or what to do, but that person might point out to you that the way you asked them to do it is about the most labor intensive and least reliable way of doing it.

And it doesn't matter what line of work you are in.  You want to become a writer?   You do so not by learning to write in college, but by sitting down and writing.   You can graduate with all the degrees in journalism, but still be unable to get a job until you've worked in a newsroom writing articles to a deadline.

So many successful people are college dropouts.  It is not that they failed at college, only that they didn't feel it was of use to them at the time.  Ironically, many return later on, to be commencement speakers and receive honorary degrees - from the same place that told them not to let the door hit them on the ass on the way out!   It must be delicious to see the College Dean grovel like that.   Those who can't do, teach.

Of course, this doesn't mean dropping out of college will make you a Billionaire, only that life goes on after college and without it.  All the jobs I've had in life that required a college degree, I got before I got my degree - the latter being a credential needed to keep the job, not get it.   Funny how that works - actually knowing something and having skills counts for more than a score on a test or a term paper.

Will this ever change?  Perhaps, perhaps not.  So long as High School "educators" (throw up in mouth a little bit - remember, I went to your government school and you can't lie to me about it) continue to lie to students and tell them that having a college education is the only path to success, kids will keep signing up for these student loans.   And so long as parents are desperate to "launch" their children and they see college not only as the solution, but a social stigma if their kid doesn't go, the situation won't change.

There are a lot of people in this world who are not very smart (and this includes me).   Not all of us were cut out to be superstars in any particular field.  Not everyone can become a coder, as the media likes to posit.   Not everyone can have a corner office and a management title.  We should live in a world where people can have regular jobs and make a living - a comfortable living, not a fortune - and raise a family.   But no, those should not be minimum-wage no-skill jobs, either.  Just raising the minimum wage to $15 or $20 or $200 an hour won't make everyone wealthier anymore than handing out free Ferraris (or forcing everyone to buy one) will.

So what is the answer?  Again, are you kidding me?  Because if I knew that, I'd be in charge of things.  The answer to this complex question isn't going to be a simple one.  Pat answers like "free college" or "student loan forgiveness" or "$15 minimum wage" won't solve this complex issue, and likely actually make things worse.   They are convenient slogans to use to get elected, though.    It is easy to point out the flaws in these wrong answers, harder to come up with a solution that would work.

A lot of things aren't going to change.   The big chain stores are not going to go away.  Best Buy isn't going to be replaced by Tom's TV Repair Shop - simply because no one would pay those high prices and no one repairs electronics anymore.  There will be new opportunities out there - we can't "go back" to the old ways.  And new realities will be replaced again in the future.   The malls destroyed the department stores, which in turn destroyed local merchants.   But now malls are fading from view - replaced by Walmart and Amazon, among others.  Nothing is constant but change.

The only idea I have is based on my own experience.   It may be a crazy idea, and one that many government officials are dead-set against - work/study programs.  Former President Obama basically called people like me the problem, positing that we need to get people to graduate in five years or less, because dragging out your college career is somehow a bad thing (it ruined my life, for sure /s).  Then again, he's the guy whose wife is "depressed" while living in their $12M mansion on Martha's Vineyard - one of three homes they own.  Pardon me if I don't cry for Michelle.

(Caveat: Obama did push for more co-op programs, but it doesn't seem like the push worked.  We need a tax bill that encourages such programs in place of unpaid internships).

Work-study programs, or "co-oping" can be useful to the student, as not only do you learn a job "hands on" you also learn what you don't want to do in life.    One reason I spent fourteen years in school, was that the jobs I took were not necessarily what I wanted to do for the rest of my life.  It took fourteen years, but I found a career I enjoyed for thirty.

They also give companies an opportunity to "test drive" potential employees.  Some, like myself, might not work out.  Others, like a classmate of mine, end up as President of the company.  A simple thing like a tax credit or other incentive could promote more and more companies to hire co-op students - even smaller companies or even Mom & Pop shops might be encouraged to hire students, as opposed to relying on unpaid interns (which I thought was abolished by the 13th amendment!).

It's just an idea.  Maybe it is not the best idea, but one that maybe is more practical than "free college" or "free money" or whatever.

And perhaps we should be pushing vocational training more and more - but perhaps renaming it so parents don't freak out.  The amount of technology in our products is increasing exponentially, yet who knows how to fix a modern car anymore - or the cars of tomorrow?   If your Tesla breaks down,who is going to repair it?  Or your wind farm?  Solar panel?  Lithium-Ion home battery storage pack?  Who is going to install these things?   The largest cost of home solar, I am told, is the cost of installation, which can dwarf the actual panel cost and kill the payback schedule, no matter how cheap the panels themselves are (with or without tariffs).

Perhaps the Fascist and Marxist are right - we are placing too much emphasis on intellectualism and college educations.  Making them free or making everyone go (which is de faco what would happen, if college were indeed free) isn't going to solve our social problems, but perhaps make them worse.  If you look at these kids throwing rocks and attacking the police, the one thing they have in common is that they are all over-educated white middle-class kids from the suburbs, who are getting their "free money" checks from the government over the last few months.

Sort of a preview of how Andrew Yang's free money nightmare and Bernie's free college nightmare would work out - a permanent underclass of unrest.