The bubble will begin to pop when enough students start defaulting on the loan (by not working or getting paid under the table), not when potential students come to the realization that it is overpriced.

But I suspect the result won't be a bubble popping, but merely a leveling off at a higher level.

Are you aware what an awful history lies behind the idea of "merely a leveling off at a higher level"?

That is not how markets work. Things go up and down, they do not stabilize for any length of time.

The above quote is famous because it was terribly wrong, and it came from a respected voice. In the USA, the recession had already begun, which later developed into the Great Depression.

For context:

"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months." - Irving Fisher, Ph.D. in economics, Oct. 17, 1929

He said this 12 days before Black Monday.

http://www.gold-eagle.com/editorials_01/seymour062001.html

I recall some economics blog, it was either Calculated Risk or Paul Krugman, pointed out several examples of "a permanently high plateau" being applied to the USA housing market circa 2005-2008. It is remarkable how often this phrase gets resurrected, and always just before some class of assets is seen to be losing a great deal of its value.

As far as I know, this sometimes occurs and sometimes does not.

Automobile consumption seems to have increased and remained stable and is only likely to change in response to changes in fundamentals (e.g., oil prices increasing).

In contrast, housing increased for speculative reasons, and the bubble burst with no changes in fundamentals (i.e., it was not precipitated by a drop in population).

I postulated a game theoretic reason why our current high-education state might be locally stable (i.e., changing only in response to fundamentals) rather than merely a bubble. Do you have any arguments against this besides "other people made similar claims, and I can find a few cases when they were wrong"?

I merely used the term "education bubble" as a way of referencing a continuing conversation.

{[0,12) => <Lucious, 8" Stilleto Pump, Lucite>

,[12-14) => <Ellie, 5" Pump, Leatherette>

,[14-16] => <Steve Madden, 3" Pumps, Leather>

,(16-]† => <Ferragamo, 4" Pumps, Italian Leather>

,(16-]†† => <Ecco, Flats, Natural Materials>

,(16-]††† => <Birkenstock,Sandal, Vegan BirkoFelt> }

† professional school

†† graduate school, science

††† graduate school, social-science/humanities

Part of the reason I believe the education bubble is a bubble and will pop, is that the entire point of an accredited degree is to have a recognizable proxy for someone's intellectual capability. The ease at checking a person's ability prior to the internet and social media was in checking with their alma mater if they had the degree that they had and therefore if they were as capable as they claimed. Now it's even easier to check if someone has the intellectual capability by looking at their blog/github repo/facebook/twitter.

With that in mind, I think its only a matter of time before that starts to translate into educational institutions competing with industry for students.

Indeed, but the college degree is used for this because most of the former methods have been outlawed (or in the case of the high school diploma watered down to uselessness).

I don't find it impossible to imagine the government outlawing the new sort of Internet based investigations or enough people getting wise to the game to, well, game it.

If the label of failure rubs you the wrong way, take it as an incentive- buck up, get back in the fray, and try again until you're a success.

A number of people made more money by being in the housing market than was made by those who sat the whole thing out. The bubble was a loss in total but applying an overall process to an individual decision is not the easy-call that the author glibly claims it to be. A person can easily determine that wearing high-heals will be harder on their body than wearing flats. The calculations concerning a house in 2004 were much more complex and the calculations concerning whether to get a college education in 2011 are also more complex.

Of course you can - but how do you ensure that the other women in your office don't look down on you because you wear flats?

I'm not arguing that high heels are irrational at all. Far from it - I'm claiming the loss in status is worse than foot pain and thus it is rational for any individual to wear heels.

As a college educated individual, this may be the dumbest thing i have ever read

It's a transparent abuse of analogy.

"Bubble" is short-hand for a self-reinforcing financial/psychological dynamic which drive irrational investment patterns. Not every trend is a bubble, not even every exponentially-expanding trend is a bubble. Cigarette smoking, for example, expanded exponentially to virtually every nation on earth once tobacco was moderately widespread level. Epidemics often follow exponential growth patterns too but are not "bubbles".

Bubble are specific to the investment process because the investment process is where prevailing beliefs can drive short-term prices but long-term prices requires more "fundamental" qualities. Just as much, since a bubble dynamic requires not just high but expanding prices, bubbles are limited, at the minimum, that total amount of investment funds of a society.

Now, it should be noted that the investors driving an "education bubble" are not the "education consumers" - these consumers don't even have any money! The real investors are the government and the educational institutions. Together, this group is shoveling money into the education system with the expectation of getting more back later, with interest. For-profit educational institutions add to this dynamic by allowing unlimited further money to enter into the equation. That government guarantees this racket and doesn't, itself, expect a profit, only heightens this "problematic dynamic" (like the home-loan scam only "pre-bailed out").

Is there evidence to support this? Short women have numerical and biological advantages (e.g., earlier puberty) wrt to pairing and reproduction; but aesthetic preferences seem tied to ratios—waist-hip, leg-torso—that can hold for samples tall or short. Heels seem like a means for adjusting the observed leg-torso ratio of a sample to mask suboptimal genetic inputs and environmental effects; i.e., heels make legs look longer in proportion to overall body height.

However, Choo and Ferragamo provide both offensive first-order and defensive second-order improvements to a given shoe-chooser's strategy.

Well-designed shoes enhance leg-torso-proportionality without triggering the "Hollywood & Vine" effect in the target.

Shoe-chooser cohorts (competitive or collaborative) incorporate their analyses of the chooser's tradeoffs into their feedback and behavior. Expressions of peer support ("props" in the vernacular) or criticism ("dis" in the patois of the street) respectively enhance or degrade the chooser's perceived desirability. A designer pedigree increases the probability of a "dis" being countered by a "prop", mitigating the Ho-Vine effect and further increasing the chances of the shoe-chooser successfully reproducing at her sub-optimal leg-torso-proportion.

Personally, I think women should stay away from high heels - they also ruin their feet doing it, which is definitely not aesthetic.

This is like an article in 2007 reading "The High-Hell Bubble never popped, and the Housing Bubble may not either."

It's the difference between a double blind experiment and an epidemiological survey. One attempts to isolate a mechanism that is predictive, another attempts to explain historical trends.

A speculative bubble is not an equilibrium. It will inflate and pop all on it's own accord. The housing bubble inflated and popped without any underlying changes in fundamental factors (e.g. population).

In contrast, a Nash Equilibrium based on signalling will inflate and remain until some fundamental factors change. Women will continue to wear high heels and people will continue getting unnecessary education until these activities stop being a means of obtaining status.

Most of the movement men were conditoned to perceive as womanly comes from simple mechanical attempts of a female trying not to fall of the high heels.

To quit that, all woman would have to pass on advantage of using fairly easy way to tap into male conditioning for at least one generation.