Economic Development

College Alternatives (10/27/2012)

One of my favorite bloggers is James Altucher.  He constantly harps on the lack of value currently presented by higher education.  Sadly, many people miss what I believe is his key point: education debt is stupid unless you can pay it back.  In our current society there is a mentality that you must have a degree to succeed in life and there are no other alternatives.  I do not think this is true.  More important, if a degree is sought and debt is incurred there should be a return on investment.

An example of a bad decision is a liberal arts major taking on $100k in debt a private school when the same education could be had at a public institution, in-state, for a fraction of the cost.  Similarly, anyone attending a for-profit corporate university should seriously question the process.  These schools exist only because the federal government has insured the repayment of their tuition fees and they feed on chuckleheads willing to get a shoddy degree with no understanding of the repayment process.  If the schools themselves had to collect debt they would readily go out of business.  If the students understood how bad these institutions are they would go out of business.

Considering the above I recently shared a conversation with my friend Hal Rice about college alternatives.  We both have a plethora of children who will seek education.  I have no plans, and believe no parent should have plans, to fund the education of my children.  I am a believer in self-sufficiency and struggle to drive desire and appreciation.  In our conversation I said the career advice I would give to my children is as follows (counting down) for the top 10 best jobs.

Before reading there are a few key points worth mentioning:

– Unless you are a Kennedy, no one gives a shit where you went to college when getting a job.  They just want to see a degree

– Unless you went to an Ivy League school, again, no one gives a shit where you went to college

– If you are a professional (lawyer, doctor, engineer, etc) and have a license to practice then no one gives a shit where you went to college

– You should never take on any more debt than the one-half average starting salary of one year’s wages.  You are a dumbass if you do

– Liberal Arts degrees are useless unless you want to be a teacher.  Thus, if you spend more than $15k to get a liberal arts degree you are a chucklehead

– There is nothing wrong with a trade profession: carpentry, auto repair, air conditioning, etc.  The key is to learn a skill the COULD be translated to other industries

– Most important, live life and focus on happiness

 

(10) Military career.  As an NCO it is possible to find a job function to ultimately translate to private industry.  Electronics training, aircraft repair, or aircraft approach systems come to my mind.  After 25 years retirement will supplement a civilian career with benefits for life.

(9) Lawyer.  Pick a fourth tier law school and pass the bar.  Focus on a district attorney job first to get some experience and then go to work in a small town in a small practice.  Connect with local CPAs and financial planners to do Wills and Trusts. Get to know the real estate people and manage property transactions.  With some divorce and drunk driving clients and charging a reasonable rate this is a well-respected and affordable career.

(8) Computer Programmer.  Tough competition from abroad for this career but high incomes provide an excellent return.  Still in demand though but the challenge is to keep up with changing technology.  Expertise in a particular industry can provide a career for life.

(7) Aircraft Repair. Tough but doable and not a bad life.  Setup shop at the right airport and keep your license current you can have a career.  This can be in general aviation or take someone to the airlines.  Remember, the airplane does not fly if maintenance is not completed.

(6) Air Conditioning Repair. In the south (Florida, Texas, Arizona) this one is hard to beat.  If it’s 100F outside people want their A/C fixed and you have them.  A skilled person with some business savvy and customer service attention can build a nice local business.

(5) Pastor.  OK, here is a special job and one that won’t make you rich, unless you are a televangelist.  Everyone loves you.  Generally you have benefits and a decent salary.  You won’t be rich and have to work weekends.  But, if you can write and like people this is a great career.

(4) Local Insurance Agent.  Specifically, State Farm or Farm Bureau.  Everyone in town loves this guy and he knows everyone. Join Kiwanis, Rotary, church, and knock on doors.  Insurance is the gift that keeps giving and giving.  If you sell a life policy there are residuals.  Sell property and you get a small piece annually. It is hard to beat this job.  No degree needed….

(3) Optometrist.  Again, does insurance matter with these guys – no.  Have you spent $500 on eye glass frames? If your glasses break are you going to wait until you have money to replace them?  No, you have to see.  Follow the orthodontist education route below.

(2)Veterinarian.  My vet doesn’t take insurance, does yours?  I dropped $200 on my “free cat” last week because he is the family pet.  Follow the same path to education success for an Orthodontist.

(1) Orthodontist.  I am now paying for braces and these guys are brutal.  $5000 per mouth, no matter what.  There is no negotiation, they are immune from insurance, they setup in any town in America, and appear to be recession proof.  A public school will provide the basis to get into dental school and then go off-shore. Get a cheap education, come back for residency and get your license.

 

 

October 27, 2012 by Depression Economic Development preparedness sheep

Small Town Newspaper (11/16/2011)

Small Town Newspaper (11/16/2011)

Imagine a world where no newspaper exists. Very soon we may live in such a time. Most people treasure newspapers as milestones of current events. For example, in my possession I have framed front page issues of The Chicago Tribune from November 23 and 24, 1963 detailing Kennedy and Oswald’s assassinations. History books show pictures of Truman holding The Chicago Tribune on November 3, 1948 announcing his defeat to Dewey.

Since the printing press was invented by Gutenberg around 1440, people have used shared printing to record history and news and this the newspaper has been the most popular daily diary of our world. Today, historians scour pages of black and white text to create the synopsis that becomes our history books. However these summaries are swayed by opinion and filter critical details.

The average person typically keeps newspapers clippings; I have copies of my high school athletic feats, graduation announcement and other personal milestones. Most of us save birth, death and wedding announcements. In each of these cases without a local newspaper there would be no record. As I paged through last week’s paper I read about school children, Council meetings, local sports, and crime. Arguably information is captured digitally via the Web and television, but only the small town newspaper remains accessible to everyone.

A March 22, 2009 Time magazine article reported on a Pew Media analysis focusing on the question, “what happens when a town loses its newspaper?” For small towns the consensus seems to be one of indifference other than the loss of primary news sources via the “ecosystem” of local journalism feeding other outlets because only a small town newspaper provides the depth and diversity of local news. Unfortunately, newspapers are closing at an amazing rate, hundreds per year from major cities to the smallest towns. The brick and mortar business model is giving way to a low-cost digital media that many assert will ultimately replace print.

As you page through this week’s paper take an extra moment to scrutinize each page, looking for particulars normally passed. For instance, read the crime blotter and note the detail forever saved to the historical record. Around the local section imagine looking back 50 years from now through an archive at the photos and current events of the day. While reading the editorial page’s letters and opinions picture future school children doing research on “The Great Recession” and compiling future history books from the non-digital account of today’s woe.

I argue newspapers will always have a place in our world and remain the only reliable method to record history and present opinion. Support for our papers must start via circulation and supporting the advertisers. Patronize the businesses you see in print and let them know it was printed media dollars that brought you to their establishment. Let your editor know how columns impact you and take every opportunity available to contribute editorial content.

November 26, 2011 by Depression Economic Development Great Recession Mainstream Media

All Lots $79,900

All Lots $79,900 (10/5/2011)

Driving to Gainesville (GA) one morning last week I passed a partially developed neighborhood with an enormous sign advertising, “All Lots $79,900 – Financing Available.” I laughed as I looked at the subdivision: empty lots next to “McMansions” displaying overgrown weeds, and electrical boxes and sewer pipes growing out of the ground like trees. The eyesore of the undeveloped properties is obvious and a developer’s dream is awash in a failed economy.

During the boom I was always troubled by such subdivisions; worthless land with infrastructure added and lots sold like South Florida swampland. Exorbitant prices were supported by the banking Ponzi scheme. How come no one every asked why a piece of dirt was nearly $350,000 per acre I wondered? Farmland returns value and is the reason people homesteaded. However since the first post-WWII subdivisions in Levitown Americans have succumbed to a delusion of home ownership as a measure of success.

Imagery fuels this desire as Hollywood’s settings range from Beverly Hills and Orange County to Chicago’s North Lakeside Drive or beachfront on any shoreline. The middle class believes homes should be large and spacious when the affordable reality is quite opposite. Maybe the “Real Housewives…” should be set in a Toll Brothers or KB Homes three bedroom house in Orange County, Florida to generate a realistic picture of middle class life. In that show Mom and Dad would both work 50 hours per week and good times are replaced with conversations of budgets and staying afloat.

The media continues to find false hope week after week of real estate market bottoms or economic turnaround. Housing starts are the lowest in recorded history, and loans to purchase a home are unattainable. The biggest criminals have been exonerated by “too big to fail” and continue to profit, and taxpayers now hold one-third of foreclosed properties. Instead of reporting on “Obamavilles” and digital soup lines of 45 million food stamp recipients a National Association of Realtors monthly press release reporting “pricing bottom reached” is promoted as gospel to only be contradicted the following month.

The dreams remain alive for a life now gone; large houses, jet skis, and oversized trucks, but signs for $79,900 lots still fly. As businesses shutter, mayhem by youthful mobs continues, prices rise and wages stagnant I hope reality will set in. Across the country there are families living the dream in brand new, overpriced homes looking at the overgrown remnants of lost subdivisions and lost dreams. Someday soon the sign will promote the real value, “All Lots – Worthless.”

October 21, 2011 by Capitalism Depression Economic Development Great Recession

Things you don’t know

It’s easy to watch the news and feel the economy is improving. Comically the performance of the Dow Jones is blasted at us each evening as the key indicator of economic success in America. It becomes more ironic when one thinks of Larry Kudlow shouting accolades of “Green Shoots” across the CNBC airwaves, but our neighbors are losing their jobs and homes. The Obama administration’s economic success is measured by the Dow, unemployment, and inflation. The numbers are reported as better than during the recession of the 1980s and especially better than the Great Depression. However, this is far from the truth.

Every evening the swings in the Dow are blasted across the airwaves as the measure of success of our country. However, the Dow has changed so dramatically no one should pay any attention to these numbers. The Dow is an index of 30 companies, originally started in 1896. In 1896 there were twelve companies in the Dow and only one remains existence today, General Electric. Since 1896 the “components,” or 30 companies composing the index, have changed 48 times. Thus, a more technology weighted or health services weighted Dow can look nothing like the Dow of bygone years. When one adds inflation, as the Dow is unadjusted, the numbers become completely meaningless.

The unemployment numbers are currently 9.1% and considered the holy grail of whether we are better off than the Great Depression. Most people don’t realize the methods of calculating the unemployment rate have changed. The most significant change came in 1994 when those out of work for more than a year were eliminated from the numbers, essentially reducing the count by 5 million and in 2003 the statistical models were changed. Using old methods brings the current U-6 rate to 23%, in line with the numbers of the 1930’s.

The consumer price index (CPI) is the measure of inflation and it too has changed. The market basket of goods is to measure pricing averages as this index impacts policy and more importantly government dole like Social Security and Medicaid. Alan Greenspan argued the historic methods were invalid because, for example, if the price of a steak increased then consumers would substitute with hamburger. A somewhat valid argument until one considers rent, heating oil, and gasoline where there are no substitutions. Changes were made by Carter, Reagan, and Clinton to ensure inflation was not “overstated.” Housing is indexed to “rent equivalents” and energy has been eliminated.

In essence, we are not comparing apples and apples to look at today versus yesterday. “There are three kinds of lies: lies, damned lies and statistics.” – Author Unknown

August 20, 2011 by Capitalism Depression Economic Development Great Recession

Small Town Destruction – Part II

Small Town Destruction – Part II

In my first column addressing the demise of small towns I pinpointed three items I believe are consistent in the recipe for disaster: highway bypasses taking traffic around town, national retailers undermining local merchants, and outdated alcohol ordinances preventing thriving dining. Objective and specific, I believe the slow withering of communities can be avoided and in no way do I question the emotional appeal of charm or the fabric of the community. Expanding further on the recipe to create sustainability several more key strategies, in addition to the original three, can be implemented.

First, tax policy can drive business toward town center through a reverse property tax or by creating community redevelopment districts. Traditionally property taxes are lower in the suburbs, by reversing the millage rate growth is encouraged toward town and away from the outskirts. Continue reading…

July 16, 2011 by Economic Development Great Recession

Small Town Destruction

Small Town Destruction

In my job I drive through small towns throughout the southeast U.S. It saddens me to see these former, vibrant communities withering away. Most people would find easy reasons for the local downfalls, like manufacturing plants closing. There is some truth to this, and of course the long-term trends in demographics point toward moves toward the suburbs, but I would argue the root cause is the locally self destructive historic actions of the communities themselves. I believe there are three distinct errors.

First, “we need a bypass.” One can follow US441, US301, or US1 in Georgia and Florida to see numerous examples. Beautiful towns are bypassed by high speed highways giving no reason to slow and take a look. The land on the bypass is commercialized by modern developers building look-a-like cheap structures found anywhere in America. The unique downtown charm of Main Street is then left to die. Ironically, my Garmin GPS has routed me through many towns, instead of the bypass, as the shorter faster route. I have enjoyed this scenic discovery and reminder of small town charm, and enjoy the scenery of the plantation homes, brick buildings, and unique architecture versus the lackluster Continue reading…

July 13, 2011 by Economic Development Great Recession

How Small Towns Can Survive (Cleveland, GA)

The following column appeared in the “White County News” 6/30/2011 where I was a guest columnist.

In my job I drive through small towns throughout the southeast U.S. It saddens me to see these former, vibrant communities withering away. Most people would find easy reasons for the local downfalls, like manufacturing plants closing. There is some truth to this, and of course the long-term trends in demographics point toward moves toward the suburbs, but I would argue the root cause is the locally self destructive historic actions of the communities themselves. I believe there are three distinct errors.

First, “we need a bypass.” One can follow US441, US301, or US1 in Georgia and Florida to see numerous examples. Beautiful towns are bypassed by high speed highways giving no reason to slow and take a look. The land on the bypass is commercialized by modern developers building look-a-like cheap structures found anywhere in America. Continue reading…

July 1, 2011 by Big Government Economic Development

Carbon Copy America

Carbon Copy America

My wife and I came down off the mountain this weekend and visited “civilization” to engage in the most popular sport in America: leisure shopping. Visiting the Mall of Georgia is like visiting Altamonte Mall. The similarities start with traffic lights, waiting to make turns, localized strip malls with a variety of specialty stores, car dealers using balloons to lure naïve consumers, and franchised eateries overfeeding overweight patrons. My first inclination is to shop locally, like I did in New Smyrna at Coronado Hardware or eating at the Dolphin View, but lacking choices I was forced to head to the Mall.

My intent here is not to complain about the Mall, but to comment on willfulness to trade perceived success for lost identity. I have previously written about the “good old days”, circa 2006 during the boom, and also commented on the loss of small towns in my column, “Taking Back Roads.” At the end of our shopping expedition on Saturday my wife, LeeAnn, said, “we could be anywhere in America. Looking around the stores and architecture are no different here or in Altamonte Springs, Ft. Worth, or Minneapolis.” Her observation was spot on; we chose the economic path that brought our destruction and it started in the early 1990’s. Thinking back to the 1970s and 1980s, appliance and electronics stores were locally owned; Home Depot, Lowes, and Best Buy did not exist except in their original markets. Wal-Mart was a regional Arkansas chain, not a megastore found in every town in America. Even the Mall’s department stores appeared quirky to the out-of-state traveler as they represented decades old local businesses like Burdines, Daytons, Wanamakers, and Gimbels. And of course, the out parcels of Linens and Things, Old Navy, and Michaels did not exist.

In the 1990’s with easy access to money, a rapidly rising stock market, low barriers to brokerage services and do-it-yourself investment attitudes the economic boom erased our identity. Local architecture and business acquiesced to national franchises and bland buildings void of character delivering mass-produced Chinese merchandise meant to symbolize success to anonymous strangers. On a local level builders nationalized and did the same, trading character for mass production of McMansions with bathrooms larger than the prior generation’s living rooms. New Smyrna Beach and Cleveland, Georgia lag behind, but yet both claim progress by advancing box stores and abandoning local business heritage. Just push “Copy”, America has lost her character.

August 18, 2010 by Economic Development Great Recession Mainstream Media Peak Oil Stupid People