No Mercy / No Malice: High Anxiety

Summary

Podcast Summary: The Prof G Pod with Scott Galloway
Episode: No Mercy / No Malice: High Anxiety

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Introduction

In this episode of No Mercy / No Malice, hosted by Scott Galloway and narrated by George Hahn, the focus centers on the escalating anxiety surrounding college admissions in the United States. Through a blend of personal anecdotes, statistical analysis, and critical insights, the discussion delves into the systemic issues plaguing higher education, the commodification of college degrees, and the ensuing stress experienced by students and their families.

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Key Themes

1. The College Admissions Stress Epidemic
2. Higher Education as a Commodity
3. Legacy Admissions and Affirmative Action
4. The Changing Landscape of Higher Education
5. Potential Solutions and Future Outlook

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1. The College Admissions Stress Epidemic

George Hahn opens the discussion by contrasting his idealized view of college tours with the harsh reality of the college admissions process:

• “The college admissions process has kicked off. Two years before he sets foot on a campus and it's already a flaming bag of shit.”
  [02:39]

Hahn emphasizes the immense and often unnecessary stress that begins long before students even attend college:

• “My industry higher ed is corrupt and... second only to poverty regarding preventable stress in US Households.”
  [02:54]

He underscores that poverty is frequently highlighted as a major stressor, but the pressure around college admissions is equally, if not more, debilitating.

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2. Higher Education as a Commodity

Hahn employs the metaphor of higher education being a "wonder drug" that should be accessible to all, yet it's currently "sequestered behind ivy-covered walls and tuition that commands a gross margin of 90% plus."
[04:00]

He critiques the exclusivity and high cost of higher education, arguing that it transforms universities from institutions of learning into luxury brands:

• “Higher ed is not only the best path to economic security, it will also shape the view of many... who aren't expanding their freshman class faster than the population should lose its tax-free status.”
  [18:16]

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3. Legacy Admissions and Affirmative Action

The episode delves deep into the controversial practices of legacy admissions and race-based affirmative action:

• “Legacy admissions in elite schools began in the 1920s... more than half the schools in the US continue to use legacy admissions, and 40% of students nationwide benefit from such preferences.”
  [14:00]

Hahn discusses the historical context of legacy admissions as a means to exclude certain groups and how, despite their problematic origins, these practices persist today.

Regarding affirmative action, Hahn notes the shift from race-based admissions to legacy preferences post the 1995 UC system ban:

• “Identity politics have been weaponized by a DEI apparatus on campuses... When the Supreme Court banned race-based admissions, affirmative action for the rich, AKA legacy admissions, continues.”
  [13:44]

He argues that the focus should shift from race to socioeconomic status, advocating for affirmative action based on economic need rather than racial identity.

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4. The Changing Landscape of Higher Education

Hahn highlights the disparities between elite and non-elite institutions, especially in light of the digital economy:

• “In a digital economy where everyone has access to everything, there are more students applying to the top schools, giving the top schools access to better students. All of which creates an upward spiral of strength among the strong.”
  [05:17]

He points out that while top-tier universities continue to thrive, lower-tier schools face closures and mergers, further exacerbating educational inequality:

• “Since 2020, 64 colleges have either closed or merged... the myth of education always pays off has been busted at Tier 2 schools.”
  [05:17]

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5. Potential Solutions and Future Outlook

Hahn proposes several strategies to alleviate the pressures of college admissions and make higher education more accessible:

• Reducing Costs:
  “Using AI software, the abolishment of tenure and higher standards for faculty, we could cut costs 30% and tuition conservatively in half.”
  [16:02]

• Eliminating Legacy Admissions:
  Hahn is skeptical about the elimination of legacy admissions, citing ongoing donations and vested interests:

  • “I don't have a problem with legacy admissions when... the money is used to expand access for other students.”
    [14:39]

• Expanding Access Through Alternative Funding:
  He highlights initiatives by universities like ASU and Purdue that offer free tuition under certain conditions, emphasizing the importance of state-supported vocational programs.

Hahn concludes by underscoring the collective impact of these issues on various stakeholders, from stressed students to struggling families, emphasizing that the current system's flaws have far-reaching consequences.

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Notable Quotes

• “College admissions is a nightmare.”
  George Hahn, [02:07]

• “Higher education is in fact a wonder drug, a pill that extends life, makes you happier, healthier and wealthier, and strengthens your relationships.”
  George Hahn, [03:46]

• “Affirmative action should be based on one color, green. It's poor kids who need a hand up.”
  George Hahn, [12:02]

• “Hugely, higher ed is not only the best path to economic security, it will also shape the view of many, if not most of the people running the world for the next century.”
  George Hahn, [15:27]

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Conclusion

This episode of No Mercy / No Malice presents a critical examination of the current state of college admissions and higher education in the United States. Through insightful analysis and poignant commentary, George Hahn and Scott Galloway shed light on the systemic issues contributing to high anxiety levels among students and families. The discussion calls for a reevaluation of higher education's role, advocating for increased accessibility, reduced costs, and a shift away from exclusive practices like legacy admissions. As the landscape of higher education continues to evolve, these insights are crucial for stakeholders aiming to create a more equitable and less stressful path to academic and economic success.

Transcript

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[Scott Galloway]

I'm Scott Galloway and this is no mercy, no malice. College is a wonder drug. College admissions is a nightmare. High Anxiety as read by George Hahn.

[George Hahn]

I just returned from the US and was struck by how tense things are. It feels similar to what I imagined the mood was during the Vietnam War. So let's take a break and discuss.

Something even more stressful. College Admissions. Yay.

Last week I did a college tour with my son. It was a chance for us to.

Bond and bask in the infinite possibilities.

That stretch out in front of him.

The previous sentence is a lie.

The college admissions process has kicked off.

Two years before he sets foot on.

A campus and it's already a flaming bag of shit.

Where a flaming bag of shit is.

A ton of unnecessary stress. My industry higher ed is corrupt and.

Second only to poverty regarding preventable stress.

In US Households, Note you likely had the reflexive synapse fire of reducing poverty.

Is not that simple.

No, it is that simple. It would just mean lower stock prices and a more progressive tax policy. The incumbents deploy the illusion of complexity as a weapon of mass distraction. From a simple hard truth, the US.

Chooses to let 1 in 5 households with children live in poverty.

But that's another post. Despite the lie we tell ourselves. You don't need college in a vain attempt to opt out of the stress. Higher education is in fact a wonder drug, a pill that extends life, makes.

You happier, healthier and wealthier, and strengthens your relationships.

America is the world's premier manufacturer, producing a compound at a purity no other manufacturer can rival.

No nation dominates any industry the way.

The US dominates higher ed. Millions come to the US to access this drug. In a rational world, we'd scale it.

Instead, we sequester it behind ivy covered walls and tuition that commands a gross margin of 90% plus.

And for centuries we prescribed this cure all exclusively to white men. Despite a 6% increase in applications this year There's a narrative questioning the value of a college degree. I'm often asked, is college worth the price? My answer mostly yes. My hunch is that decades of news stories about for profit scam schools, student loan debt and income inequality have dinged the college brand, as those narratives speak.

To a sense of stagnation for people.

Who once viewed universities as an on ramp to a wealthy lifestyle. In a digital economy where everyone has access to everything, there are more students applying to the top schools, giving the top schools access to better students. All of which creates an upward spiral.

Of strength among the strong.

Lower tier schools, however, are struggling. Since 2020, 64 colleges have either closed or merged. Meanwhile, the myth of education always pays.

Off has been busted at Tier 2.

Schools, many of which offer a Hyundai for a Mercedes price. The strongest brands in the world, mit, Apple, Hermes, the US are built on.

The artificial choking of supply via rejectionist.

Admissions, premium pricing strategies, limited production and rationing visas respectively.

My business intelligence firm L2 advised nearly every luxury business. The firm was founded on a simple premise. Prestige brands trade at higher multiples of revenue due to increasing income inequality and their ability to manufacture scarcity. We sold the company in 2017 for.

Eight times revenue, mirroring our client base.

We were disciplined about pricing and said no to many potential clients.

My first consulting firm, Profit, said yes to every client and it sold for 2.8 times revenue. It was the right decision at the.

Time as I didn't have the capital.

To utter the sexiest word in the English language. No Saying no is the correct strategy for a consulting firm or a luxury brand, but not for a university. Yet the top 2% of institutions have.

Decided they are luxury brands, saying no to more than 90% of their applicants. When I applied to UCLA, the acceptance rate was 76%. Last year it was 9%.

Throughout the second half of the 20th century, higher education was the key that allowed remarkably unremarkable kids like me to unlock America's promise of upward mobility.

Today, higher ed is a bouncer at.

The entrance to an exclusive club where wealthy kids and a cadre of freakishly remarkable 18 year olds build lasting relationships.

And lucrative networks with elite peers while obtaining certification that gives them access to the greatest wealth generating vehicles in history. S&P 500 companies.

In my sophomore year at UCLA, I learned my limits were not my real limits. Crew realized I would not be a doctor. Chemistry became less insecure about my insecurities. Psychology fell in love for the first.

Time and developed resilience.

Heartbroken, I'd like to think all these things would have happened whether or not I attended college, but they likely wouldn't have happened in such a safe and joyous place.

But my sense is the college experience isn't as appealing as it once was.

The University of Michigan, for example, is.

A world class institution that also provides students with the college experience.

Except there's something rotten in Ann Arbor.

Michigan invested $250 million in DEI programs.

Over the past decade. The result? More conflict, a culture of grievance, and a 33x increase in complaints involving race, religion or national origin.

Meanwhile, Michigan's pro Palestinian student assembly voted.

To withhold $1.3 million in funding activities until the university divested from Israel two months into the fall semester.

The same student assembly reversed course when.

They realized defunding ultimate Frisbee made zero fucking sense. In response, pro Palestinian activists accused the.

Assembly members of complicity in genocide. It may be this march of the zombies at elite schools that explains why.

Southern universities experienced a 30% jump in applicants from kids in the Northeast between 2018 and 2022. Georgia, 48% acceptance rate, Clemson, 51% acceptance rate, and Alabama, 83% acceptance rate aren't elite schools. But Southern schools are generally less expensive.

And seen as less political. They're also more likely to embrace the.

Traditional college experience I.e. football games, Greek life and fun.

State schools have registered an 82% increase in applications since 2019 as they offer a better value.

The whales of high tuition prestige universities are international students. At NYU, they constitute 22% of our student body and likely half our cash flow.

As they're ineligible for financial aid, we.

Claim we let them in for diversity. This is bullshit. International students are the least diverse cohort on earth. That is they are the richest kids on campus.

Letting in the daughter of a Taiwanese.

Private equity billionaire isn't helping diversity, but claiming it is illustrates just how far we've fallen from the original goal of affirmative action. Note, international PhD students whom we pay are some of the most impressive young people on the planet. In 1960, Harvard, Yale and Princeton had a total of 15 black students out of a combined enrollment of 3,000. That was a problem, and shifting to.

Race based admissions made sense.

In 2024, 65% of students at Harvard identified as non white.

The Ivy League as a whole now scores high in the U.S. news &.

World Report diversity Index.

This is a wonderful thing, as black.

Students, along with Asians, women, LGBTQ people.

And folks from other groups, have historically been excluded from elite colleges.

But at this point, the cost of race based affirmative action outweighs the utility. Affirmative action should be based on one color, green. It's poor kids who need a hand up.

Identity politics have been weaponized by a DEI apparatus on campuses.

That doesn't translate to progress but student debt.

When the University of California system banned affirmative action in 1995, the number of.

Black and Latino first year students plunged by nearly half at UCLA and UC Berkeley. But over time, the numbers rebounded. By 2021, UCLA's first year class included.

More Black students, 346, or 7.6% than.

Its 1995 class, 259, or 7.3%.

While the UC chancellor submitted an amicus.

Brief supporting affirmative action at elite private schools, they achieved similar results by implementing.

An admission guarantee to top performing students.

Statewide, as well as an admissions process.

That factors in the location of an.

Applicant'S home and high school. While the Supreme Court banned race based admissions, affirmative action for the rich, AKA legacy admissions, continues. Not so Fun fact.

Elite schools began using legacy admissions in.

The 1920s along with standardized tests, interviews and extracurricular activities to keep out Jews. Despite its ugly origins, more than half.

The schools in the US continue to use legacy admissions, and 40% of students nationwide benefit from such preferences. At Harvard, legacies accounted for 36% of.

The Class of 2022. Culture Wars center the fight around race based preferences. But elite universities are businesses and the only color that really matters is again, green. For loyal, wealthy customers, the legacy advantage is remarkable. Here's the thing. I don't have a problem with legacy admissions.

When I was at Haas, there was.

A student who was obviously a legacy, that is Their billionaire father donated to get them into business school. That's a good thing if the money is used to expand access for other students.

My problem with higher education is that we're whores who aren't transparent about being whores. Many faculty and administrators forego higher paying careers as they believe in the mission.

Most, like the rest of us, wake up every day and ask how can.

I increase my compensation while reducing my accountability? They found the answer in the LVMH strategy.

Only HitchCollege degrees aren't Birkin bags.

And higher ed is not only the.

Best path to economic security, it will.

Also shape the view of many, if.

Not most of the people running the.

World for the next century.

The last time I wrote about higher ed, I received three cease and desist letters from universities we said were likely to perish. DEI ethics, sustainability, leadership and near Anything with the word studies in its title is no longer about helping people, but.

Welfare for the over educated.

Here's the dirty secret. Using AI software, the abolishment of tenure and higher standards for faculty, we could cut costs 30% and tuition conservatively in half. We wouldn't need student debt bailouts because.

Kids wouldn't need student loans. Five states and a handful of elite schools recently banned legacy admissions.

My Profg Markets co host, Ed Elson, believes the practice will be gone in a few years as donations no longer guarantee acceptance. I disagree.

Donating isn't entirely transactional. When I gave to UCLA and UC.

Berkeley, the chancellors were explicit a donation wouldn't make it easier for my kid to get in. In fact, it likely makes it harder. And that's fine.

I donated to give an overdue nod.

To the Californian and American taxpayers who invested in me. I also donated out of ego.

It wasn't anonymous. Being a provider makes me feel masculine.

Still, Ed has a point about why many people donate.

Last year saw a 2% drop in.

Private donations to universities. Despite the strong economy and the market hitting new highs, the $1.5 billion that might otherwise have gone toward donations is likely up for grabs as parental admissions.

Anxiety is closely correlated with the size.

Of your bank account.

Such anxiety will likely supersize the emerging college admission consulting complex. Soon it won't be an advantage to hire a consultant, but a disadvantage if you don't.

I'm not suggesting we shouldn't have elite.

Schools that have exceptionally high standards, but.

Embracing a for profit business model more.

Suited for panerai than a public service unnecessarily restricting supply for money.

And ego is just plain wrong. We have the Pill, the miracle drug.

Any university that has an endowment over.

A billion that's not expanding its freshman class faster than the population should lose.

Its tax free status as they are no longer a place of learning but.

A hedge fund offering classes and schools.

Should be on the hook for 50% of bad debt from student loans.

I can't imagine the economic stress levied.

Across American households who don't have a.

Spare $250,000 lying around.

It should be noted that many schools.

Like asu, Purdue, the University of Illinois system offer free tuition to students who.

Meet minimum academic requirements. Also, 17 states provide tuition free vocational programs via community colleges.

If grief is love's souvenir, then anxiety is love's tax. I never cared much about anything until I had boys, but now I'm anxious all the time. Despite having the funds for my boys education, we've lost the script.

The leadership and faculty of elite universities.

Have morphed from public servants to Birkin bags.

Whether you're a stressed kid in high.

School, a family saving for college, an anxious parent, a college grad or dropout struggling with student debt that's difficult to discharge in bankruptcy, or someone being asked to bail out, someone who had opportunities not afforded to you, we're all paying the price.

[Scott Galloway]

Life is so rich.

Life.

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