"Education is not a problem. Education is an opportunity." -Lyndon B. Johnson
(But I'd add- with the price of tuition, education has been made a problem because of the lack of an opportunity).
Long overdue Note of Clarification: For the remainder of the columns I will be referring to “necessary costs” as- unavoidable purchases/expenditures nearly all citizens would like to be able to afford in order to maintain or grow their futures- their own as well as their children’s, not monetarily but more from an enjoyment standpoint. If we learned anything from Whitney Houston- it would be “that children are our future,” and also to not be pressured into a cocaine habit toward which our husbands likely steered us out of some marital peer-pressure directive. Ok, that was two things. At any rate- “necessary costs” include, but are not limited to- vehicles in good working condition; homes with yards that are suitable environments for the raising of children; paying for swimming lessons, baseball camp, dance recitals; the financing of weddings for said children, and funerals for our parents who once thought of us as the future; home repairs; contributions to a retirement account, repayment of our student loans, infrequent vacations, medical care, child-care, etc. Most of what I mean by the words- “necessary costs” is pretty much contained in point (e) from my May 23rd post. One more thing- I am using “necessary” in terms of what is valued by any citizen who intends to have a satisfying life, and not struggling to obtain fundamental necessary things such as food, clothing, shelter, etc.
First and Foremost: The first and most important necessary cost is a college degree. I am focusing on that one because I see that it is going to be increasingly problematic for future generations of middle class kids to be able to afford a college education, given the price-tag on a college degree and how much it will cost them (in terms of earnings- something I addressed last time) should they be unable to afford to finance one. A college education is the necessary cost that will most determine how obtainable all of the other necessary costs will be. Hopefully, people are, by now, willing to accept these truths:
1) by and large, people with a college degree, earn more money throughout their working careers than those without one (see data from last time);
2) the costs of college tuition are growing each year; (see, letter (c) from my May 23rd installment. If you want the politician’s stance on this go to: http://www.senate.gov/~govt-aff/020900_pressb.htm which addresses the fact that a 2008 republican presidential candidate, Fred Thompson, and a former democratic vice-presidential candidate (turned independent) Joseph Lieberman, went before the Governmental Affairs Committee in 2000 to discuss their concerns about rising tuition costs. Now, politicians feign concern about any number of issues all the time, and it is not until they propose legitimate bills, risk losing elections for taking potentially unpopular stances, and alienate constituencies, in the name of what is right for the country, that I will begin to take them seriously. They know that an appeal to the 80% of the country that considers themselves middle class is a sound political move. At least the two suits mentioned above appeared to be interested in- "bridging an economic divide" concerning the ability to afford a college education, to paraphrase a Lieberman line from the linked press release above. Also, Norm Coleman, Minnesota’s senior senator, writes in his annual report, that “federal Pell Grants . . . no longer yield the same purchasing power as in the past due to rising tuition costs.” I wonder what our favorite radio personality with a proof fixation, would have to say about his national (Thompson) and local (Coleman) republican heroes proving my point;
3) we should feel sorry for hamsters suffering from progeria- a premature aging disease- (just making sure you are awake);
4) if states across the country don’t spend some tax money on education, tuition rates will continue to rise. I'd propose to empower an investigating committee, without infringing on an industry's right to make a profit, should be convened to look into the businesses I suspect are positively fleecing the citizens of the country where necessary cost goods and services are being exchanged for money. The old adage goes- "a fool and his money are soon parted," and I'd add: never so quickly as when a blind eye is cast upon the dubious transaction by the government that could have prevented it. I could include several quotes concerning the waste of time and money usually attributed to a committee and rightfully so (but I'll just choose one: "Committee- a group of men who individually can do nothing but as a group decide that nothing can be done."- Fred Allen) There is a definite basis for monitoring certain industries, as well as justified concern about wasted money spent on the salaries of committees filled with self-righteous highbrows. I think the findings of an objective committee looking into some of the practices and dealings of free market businesses is worth the relative pittance paid to members of the committee in terms of salary compared to how much money they'll save the nation of consumers when they discover what passes for "fair market value prices" (ie. price-gauging). Think of one thing- how many millions CEOs obtain in buyouts for mismanaging a company, while workers are paid a trifling salary. I hate to defer my facts for a later post, but I'll get to that as well- trust me, or fear it- you decide.
Regulation I: I’m well aware of the attempt, and failure, of some form of regulating the private market business industries due to price-fixing issues, among other reasons, when the National Recovery Administration was developed by Roosevelt in the mid 1930s. But unfortunately, the government has seemed to take a laissez faire (hands-off) approach to certain free-market industries rather than to adopt some regulating principles. Big business, and the oil and insurance industries, to name just a few, are positively bleeding the public of necessary cost money that cripples their ability to provide a better life for their children. Perhaps there is some minimal form of regulation in these areas. If there is regulation, given the greed and incompetence of the people in charge of regulating, and the roadblocks that place limits on the types of regulation, any existing regulation is less productive than teaching a hoofless unicorn, who suffers from short-term memory loss how to make a MacGyver bomb to get back at the rhinocerous who insulted the size of the unicorn's horn.
Regulation II: Republicans think that regulating capitalism is akin to socialism, a common republican outcry if you check their greed in any manner. The fact that I have read some Milton Friedman and some Adam Smith (I said some, hell Wealth of Nations is about 900 pages long), and agree that the government should not regulate self-interest in terms of commerce, at least not entirely, proves I'm no socialist. I'm in favor of some, not carte blanche, regulation. But regulating the free market may be necessary in some measure as it is better than the lean toward feudalism that has been coming for some time without regulation- given any number of facts I could cite, and probably will, or have, concerning wage increases negatively impacting the public's purchasing power. Again, more on this in subsequent posts. I've read Friedman and Smith enough to know what kind of slippery slope I'm treading- talking of regulating the free market when the two distinguished economists I just mentioned wrote extensively of the dangers of handcuffing/limiting the freedom of private businesses. While I don't agree with either of them on everything, I'm mostly willing to agree with them on that- I'm sure they're relieved. Anti-trust laws do not even come into play here- the reason: why would two or more businesses in the same industry illegally formalize a pact in order to coerce the public into paying more for less, when many industries are so successful at exorbitantly raising prices to no ill effect, in the form of the public's hesitancy in purchasing such services, (ie. college tuition, toys made in China,** youth hockey, etc) without a formal coercive pact.
5) pay increases from companies, for job performance, even for jobs obtained as a direct result of having a degree in the first place, are not matching the annual rise of college tuition and other necessary costs. The more it costs to attend college, means more money will be borrowed, which means paying more, for longer, on interest. This means there won’t be as much money, or any, for other necessary costs;
An October 2005 Seattle Times article speaks to this point- “Double Whammy: Prices Up, Wages Lagging”: http://seattletimes.nwsource.com/html/nationworld/2002562268_econ15.html- I’d welcome an opposing, objective viewpoint that would state this has substantially changed in the past two years. Not all news contained in the article is bad, and I recognize this- as prices on hotel rooms, computers, and clothing declined (at least as of two years ago) while housing, gas prices and medical care costs rose. Unfortunately, I would classify that as anything but a wash- the prices on the latter three items have risen at rates much faster, and cost far more than the former three.
a) Having a home, if you have kids is far more necessary than paying for a hotel room, which happens most often when you are on vacation, which true middle class people with young kids can’t afford to do logistically or economically anyway. Businessmen charge the hotel room rate to their place of employment.
b) Gas prices rise and fall for undemonstrated reasons, when the price of a barrel of oil is relatively cheap, and when the number of barrels in stock is fairly high, and when the effects of national or international natural disasters- (earthquakes, hurricanes, etc.) on the price of oil, have not been demonstrated, such as when they occur in countries that don't deliver us any oil.
Concerning a supposed gas use excess by certain people: The fact that gas prices rise for absolutely no reason is especially damaging to the wallet of a person who has to drive more than 30 miles to work, perhaps because people’s employment options can sometimes be limited. If a business was closer to home and paid them a competitive wage, there are few reasons why they wouldn’t have pursued a position in that company. To be fair, gas prices, when you consider inflation, haven’t been terrible, but the gas companies should standardize the prices. There are few reasons for the market to be as volatile as it has been. The reason that the oil industry hasn't been checked in terms of their price fluctuations is because the politicians stand to gain for being kind to oil magnates, and vice versa- the situation is the epitome of political ass-kissing. One note- if we had the ultimate capitalistic economy shouldn't the government allow equal footing to other industries that may provide other viable energy resources, that may be renewable, cheaper, and make us less dependent on other countries? Shouldn't capitalism reign in all industries, even the ones that provide perhaps the best case studies for corruption. In short, should we only have government sponsored capitalism. We complain about the greed of the oil companies, and rightly so, when a gallon of gas goes up to $3 if they do not have a good reason for such a hike. The fact that it is Memorial Day weekend is not a suitable reason. We're not bartering for a shell necklace in Barbados, we're buying a tank of gas in America; the price needn't be determined by the whim of the seller whose level of greed is based on the gullible nature or perceived desperation of the buyer. You don't walk into a convenience store and pay 65 cents for a Milky Way one week, 40 cents the next and 89 cents the next week.
Fill 'er up: So, one cannot say that everyone is overusing gas, plenty of people have to or they would be forced to work at jobs that may not pay as well. And would you be the one telling people with a commute that long where to work and where to live? So, they could tell you where they would like you to work and live? Didn't think so. Those who argue that a lot of gas money is wasted while people sit in traffic must themselves listen to the argument that there would be less traffic if the immigration issue were addressed (see my last posting- date)- which is a much bigger issue than the price of gas, the length of a commute, etc. Again, if you can't see the connection between immigration and the amount of traffic, the length (in time) of the average commute, then you aren't looking hard enough; but, maybe I'm looking too hard. I'll do some leg work to see if there may be a connection between the increase in wasted time spent in traffic jams and the immigration problem, but if you are like me, you probably have never found a good reason why Americans prefered the German version of 99 Luft Balloons over the English version).
(But I'd add- with the price of tuition, education has been made a problem because of the lack of an opportunity).
Long overdue Note of Clarification: For the remainder of the columns I will be referring to “necessary costs” as- unavoidable purchases/expenditures nearly all citizens would like to be able to afford in order to maintain or grow their futures- their own as well as their children’s, not monetarily but more from an enjoyment standpoint. If we learned anything from Whitney Houston- it would be “that children are our future,” and also to not be pressured into a cocaine habit toward which our husbands likely steered us out of some marital peer-pressure directive. Ok, that was two things. At any rate- “necessary costs” include, but are not limited to- vehicles in good working condition; homes with yards that are suitable environments for the raising of children; paying for swimming lessons, baseball camp, dance recitals; the financing of weddings for said children, and funerals for our parents who once thought of us as the future; home repairs; contributions to a retirement account, repayment of our student loans, infrequent vacations, medical care, child-care, etc. Most of what I mean by the words- “necessary costs” is pretty much contained in point (e) from my May 23rd post. One more thing- I am using “necessary” in terms of what is valued by any citizen who intends to have a satisfying life, and not struggling to obtain fundamental necessary things such as food, clothing, shelter, etc.
First and Foremost: The first and most important necessary cost is a college degree. I am focusing on that one because I see that it is going to be increasingly problematic for future generations of middle class kids to be able to afford a college education, given the price-tag on a college degree and how much it will cost them (in terms of earnings- something I addressed last time) should they be unable to afford to finance one. A college education is the necessary cost that will most determine how obtainable all of the other necessary costs will be. Hopefully, people are, by now, willing to accept these truths:
1) by and large, people with a college degree, earn more money throughout their working careers than those without one (see data from last time);
2) the costs of college tuition are growing each year; (see, letter (c) from my May 23rd installment. If you want the politician’s stance on this go to: http://www.senate.gov/~govt-aff/020900_pressb.htm which addresses the fact that a 2008 republican presidential candidate, Fred Thompson, and a former democratic vice-presidential candidate (turned independent) Joseph Lieberman, went before the Governmental Affairs Committee in 2000 to discuss their concerns about rising tuition costs. Now, politicians feign concern about any number of issues all the time, and it is not until they propose legitimate bills, risk losing elections for taking potentially unpopular stances, and alienate constituencies, in the name of what is right for the country, that I will begin to take them seriously. They know that an appeal to the 80% of the country that considers themselves middle class is a sound political move. At least the two suits mentioned above appeared to be interested in- "bridging an economic divide" concerning the ability to afford a college education, to paraphrase a Lieberman line from the linked press release above. Also, Norm Coleman, Minnesota’s senior senator, writes in his annual report, that “federal Pell Grants . . . no longer yield the same purchasing power as in the past due to rising tuition costs.” I wonder what our favorite radio personality with a proof fixation, would have to say about his national (Thompson) and local (Coleman) republican heroes proving my point;
3) we should feel sorry for hamsters suffering from progeria- a premature aging disease- (just making sure you are awake);
4) if states across the country don’t spend some tax money on education, tuition rates will continue to rise. I'd propose to empower an investigating committee, without infringing on an industry's right to make a profit, should be convened to look into the businesses I suspect are positively fleecing the citizens of the country where necessary cost goods and services are being exchanged for money. The old adage goes- "a fool and his money are soon parted," and I'd add: never so quickly as when a blind eye is cast upon the dubious transaction by the government that could have prevented it. I could include several quotes concerning the waste of time and money usually attributed to a committee and rightfully so (but I'll just choose one: "Committee- a group of men who individually can do nothing but as a group decide that nothing can be done."- Fred Allen) There is a definite basis for monitoring certain industries, as well as justified concern about wasted money spent on the salaries of committees filled with self-righteous highbrows. I think the findings of an objective committee looking into some of the practices and dealings of free market businesses is worth the relative pittance paid to members of the committee in terms of salary compared to how much money they'll save the nation of consumers when they discover what passes for "fair market value prices" (ie. price-gauging). Think of one thing- how many millions CEOs obtain in buyouts for mismanaging a company, while workers are paid a trifling salary. I hate to defer my facts for a later post, but I'll get to that as well- trust me, or fear it- you decide.
Regulation I: I’m well aware of the attempt, and failure, of some form of regulating the private market business industries due to price-fixing issues, among other reasons, when the National Recovery Administration was developed by Roosevelt in the mid 1930s. But unfortunately, the government has seemed to take a laissez faire (hands-off) approach to certain free-market industries rather than to adopt some regulating principles. Big business, and the oil and insurance industries, to name just a few, are positively bleeding the public of necessary cost money that cripples their ability to provide a better life for their children. Perhaps there is some minimal form of regulation in these areas. If there is regulation, given the greed and incompetence of the people in charge of regulating, and the roadblocks that place limits on the types of regulation, any existing regulation is less productive than teaching a hoofless unicorn, who suffers from short-term memory loss how to make a MacGyver bomb to get back at the rhinocerous who insulted the size of the unicorn's horn.
Regulation II: Republicans think that regulating capitalism is akin to socialism, a common republican outcry if you check their greed in any manner. The fact that I have read some Milton Friedman and some Adam Smith (I said some, hell Wealth of Nations is about 900 pages long), and agree that the government should not regulate self-interest in terms of commerce, at least not entirely, proves I'm no socialist. I'm in favor of some, not carte blanche, regulation. But regulating the free market may be necessary in some measure as it is better than the lean toward feudalism that has been coming for some time without regulation- given any number of facts I could cite, and probably will, or have, concerning wage increases negatively impacting the public's purchasing power. Again, more on this in subsequent posts. I've read Friedman and Smith enough to know what kind of slippery slope I'm treading- talking of regulating the free market when the two distinguished economists I just mentioned wrote extensively of the dangers of handcuffing/limiting the freedom of private businesses. While I don't agree with either of them on everything, I'm mostly willing to agree with them on that- I'm sure they're relieved. Anti-trust laws do not even come into play here- the reason: why would two or more businesses in the same industry illegally formalize a pact in order to coerce the public into paying more for less, when many industries are so successful at exorbitantly raising prices to no ill effect, in the form of the public's hesitancy in purchasing such services, (ie. college tuition, toys made in China,** youth hockey, etc) without a formal coercive pact.
5) pay increases from companies, for job performance, even for jobs obtained as a direct result of having a degree in the first place, are not matching the annual rise of college tuition and other necessary costs. The more it costs to attend college, means more money will be borrowed, which means paying more, for longer, on interest. This means there won’t be as much money, or any, for other necessary costs;
An October 2005 Seattle Times article speaks to this point- “Double Whammy: Prices Up, Wages Lagging”: http://seattletimes.nwsource.com/html/nationworld/2002562268_econ15.html- I’d welcome an opposing, objective viewpoint that would state this has substantially changed in the past two years. Not all news contained in the article is bad, and I recognize this- as prices on hotel rooms, computers, and clothing declined (at least as of two years ago) while housing, gas prices and medical care costs rose. Unfortunately, I would classify that as anything but a wash- the prices on the latter three items have risen at rates much faster, and cost far more than the former three.
a) Having a home, if you have kids is far more necessary than paying for a hotel room, which happens most often when you are on vacation, which true middle class people with young kids can’t afford to do logistically or economically anyway. Businessmen charge the hotel room rate to their place of employment.
b) Gas prices rise and fall for undemonstrated reasons, when the price of a barrel of oil is relatively cheap, and when the number of barrels in stock is fairly high, and when the effects of national or international natural disasters- (earthquakes, hurricanes, etc.) on the price of oil, have not been demonstrated, such as when they occur in countries that don't deliver us any oil.
Concerning a supposed gas use excess by certain people: The fact that gas prices rise for absolutely no reason is especially damaging to the wallet of a person who has to drive more than 30 miles to work, perhaps because people’s employment options can sometimes be limited. If a business was closer to home and paid them a competitive wage, there are few reasons why they wouldn’t have pursued a position in that company. To be fair, gas prices, when you consider inflation, haven’t been terrible, but the gas companies should standardize the prices. There are few reasons for the market to be as volatile as it has been. The reason that the oil industry hasn't been checked in terms of their price fluctuations is because the politicians stand to gain for being kind to oil magnates, and vice versa- the situation is the epitome of political ass-kissing. One note- if we had the ultimate capitalistic economy shouldn't the government allow equal footing to other industries that may provide other viable energy resources, that may be renewable, cheaper, and make us less dependent on other countries? Shouldn't capitalism reign in all industries, even the ones that provide perhaps the best case studies for corruption. In short, should we only have government sponsored capitalism. We complain about the greed of the oil companies, and rightly so, when a gallon of gas goes up to $3 if they do not have a good reason for such a hike. The fact that it is Memorial Day weekend is not a suitable reason. We're not bartering for a shell necklace in Barbados, we're buying a tank of gas in America; the price needn't be determined by the whim of the seller whose level of greed is based on the gullible nature or perceived desperation of the buyer. You don't walk into a convenience store and pay 65 cents for a Milky Way one week, 40 cents the next and 89 cents the next week.
Fill 'er up: So, one cannot say that everyone is overusing gas, plenty of people have to or they would be forced to work at jobs that may not pay as well. And would you be the one telling people with a commute that long where to work and where to live? So, they could tell you where they would like you to work and live? Didn't think so. Those who argue that a lot of gas money is wasted while people sit in traffic must themselves listen to the argument that there would be less traffic if the immigration issue were addressed (see my last posting- date)- which is a much bigger issue than the price of gas, the length of a commute, etc. Again, if you can't see the connection between immigration and the amount of traffic, the length (in time) of the average commute, then you aren't looking hard enough; but, maybe I'm looking too hard. I'll do some leg work to see if there may be a connection between the increase in wasted time spent in traffic jams and the immigration problem, but if you are like me, you probably have never found a good reason why Americans prefered the German version of 99 Luft Balloons over the English version).
6) Homes- the prices on houses are declining, unlike the interest rates.
I'm not stating that mortgage protection legislation is the answer, because if someone was talked into buying a home, outside of their means, with a large payment and a teaser interest rate, and they charge a lot of unnecessary items on their credit cards, they deserve their fate- for they are wasting their own money (something I'll nail the government for next time- course the government is wasting someone else's money). I'm saying, home buyers accepted the arm/flexible/teaser/sub-prime interest rate because they couldn't afford a house without having done so (assuming of course they don't buy things they don't need). Will this type of necessary cost issue resolve itself when middle class kids are looking to own a home 20-25 years from now? Not likely. (See the Associated Press article- "House moves to expand Mortgage Protection" http://www.msnbc.msn.com/id/20837318)
6) if all of the above are true, even the one about the hamster, (#5 is as much about minimal wage increases as about the constant increases in price of "necessary costs"), then can’t we conclude that only the rich will be able to fund a college education, because they won’t go into debt, or into as much debt, paying back the interest derived from such a hefty loan, BECAUSE THEY WON’T HAVE TO TAKE OUT A LOAN to begin with? Rhetorical question. Again, keeping this in perspective, see my second post for what I'm thinking is the most important concern- the kids. Shouldn't we be concerned about the continual rise of all types of necessary costs and the effects of excessive taxation (the latter point I haven't much addressed as yet).
7) if #6 computes, won’t that mean that only rich people will be populating the higher paying jobs, further perpetuating the pay scale issue that has been proven in #1 because middle class kids won't be able to afford an education? As I've demonstrated, I'm far from a genius, but I wrote the preceding before having read Milton Friedman's thoughts on the subject: PLENTY of individuals are restricted from being trained in the more expensive professional programs, and are part of a " 'non-competing' group sheltered from competition by the unavailability of the necessary capital." (Capitalism and Freedom: University of Chicago Press, pg. 107)
Look for it: Anyone can find these things out for themselves: I could spend five blogs revealing my findings based on results obtained from any number of Google searches, but I suspect that reasonable middle class people living through the weekly management of their finances already know how difficult it is to juggle money and justify expenditures over which they have little control, besides that would be redundant and I can be redundant without too much effort.
To wit: a June 26, 2007- msn.com article-
http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/MiddleClassLivingOnTheEdge.aspx
Google it: Key a search into google- “average cost of a middle class home”* (replace home with wedding, with funeral, with health care, with just about anything you can think of). Try "vacation" for example. Say you wanted to head to DisneyWorld (they raised their prices to $71, up from $67 for admission to one park for one day- that's a 6% increase). Start looking for a new furnace, or a roofing company, and see where all the money you expected to start saving after you've paid off a vehicle will be going for the next year, when the furnace breaks down or the roof leaks, or regrettably, a child is diagnosed with an illness where the insurance company doesn't cover all of the treatments or the medications. Further, comparing the rising prices on necessary costs, like the aforementioned, among others, to what things cost 10 and 30 years ago, and whether the prices on necessary costs have risen at a rate that meets or beats inflation is also not necessary, because we know things are more expensive. If someone claims this to not be true, that would be more disgusting to me than sitting next to a mouth-breather who has eaten half a bag of corn nuts with a warm milk chaser. Oh, and go tell them to wake up, because they're dreaming.
*- Obviously, the housing market is pretty good right now if you haven't a house to sell, so first-time buyers are feeling pretty good, but those who must sell in order to buy are not.
**- A recent Associated Press article "Safe Toys to Cost More - But not this Christmas" (September 13, 2007), indicates that toys will cost 10% more because of improved testing standards stemming from the lead-tainted toy uproar which led to the recall of more than 3 million toys.
Next time: So far, I have addressed the problem of the rising prices of necessary cost goods or services as being outside of the price range of middle class people in the future as they pertain to the amount of money to be made depending on one’s level of education. Next up- Government waste- which will lead me into the topic of excessive taxation. Ah, why would we- rich, poor, or middle class want to be taxed more, if PLENTY of the money we're already giving the beurocrats is being spent unwisely? Rhetorical question.
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