school debt

Higher Education Myth

Higher Education Myth (7/6/2011)

My daughter is 15, just finished her freshman year of high school. Like many parents with a high school student I am carefully watching her grades and doing everything I can to ensure she will make it to college. Over the last four decades the number of students going to college has increased, and so have the costs. I was the first in my family to attend college, earning my way on a scholarship and understanding the path in front of me: attend school, work hard, get good grades, and graduate expecting to find a good paying job. Even in the 1980s I was puzzled by the choice of major some would make, possibly liberal arts related and then wonder why they could not find a job. As an Engineer I was showered with job offers and an excellent starting salary (nearly $39,000 in 1990).

Today it appears college has become an entitlement program, fueled by readily available public financing and a willing consumer unqualified to receive a “real education.” In 2011 the average public university cost will be $20,000 per year, and a private school twice that much. Assume your son or daughter is following their passion into liberal arts and a 4-year degree will approach $160,000 with income prospects of $25-30,000 per year; if they are lucky. Sadly, there is an assumption these students are qualified for education, and more so entitled to a job at graduation. I recently heard this anecdote Continue reading…

July 6, 2011 by Big Government Capitalism Depression Great Recession

Wealth Disparity

Wealth Disparity (5/11/2011)

A drive through New Smyrna Beach demonstrates the extreme wealth disparity that can be found anywhere in America or the world. From the mega-wealth of beachside to the barely surviving poor west of U.S. Highway 1 radical contrasts in daily life are found. It is impossible to look away in a small town and not acknowledge differences, to ignore them would be unconscionable. Like New Smyrna, America’s numbers are mind-blowing: the top 1% controls nearly 33% of the wealth in America whereas the bottom 50% has just 2.5% of the wealth.

Don’t misunderstand me. I love nice things, eating out, a beautiful home, new cars, and a big bank account. As a country even our poorest live far better than the middle class does overseas, but such argument is not cause for turning our backs on the needy. Similarly, the populist envy driven by our current President does not justify excessively taxing wage earners, or the ultra-wealthy. The current raging debate has disclosed the failures of our progressive tax system: envy that the “rich” pay much of their tax through a 15% dividend, and sadly uncovering through subsidies and support programs a single mother of three earning $14,000 per year has more disposable income than a similar mother earning $60,000.

We need the successful to succeed, creating jobs, opportunities, and capital for driving the economy. Simultaneously an understanding and empathy must exist for those who need help. I do not have solutions, but must argue the debate is lost in political rhetoric and desire to drive pet projects. Taxing the wealthy at 100% will not provide enough revenue to fix the government spending problem and it certainly will not lift those in need. Milton Friedman argues in the movie, “The One Percent” the increasing wealth gap is justified because it has also lifted the poorest of poor. In earlier lectures Friedman, in characteristic fashion, shows at least that government creates a perverse system starting with bad schools, limits opportunity through minimum wage laws, and creates dependency via welfare programs.

The political debate from both sides focuses on our tax system and protecting special interests, Republicans arguing to keep tax rates low on the rich, Democrats seeking more. Sadly, both sides view 67,000 pages of tax code as the holy grail of government purpose and fail to understand simplifying the tax system and cutting spending will allow market forces to work toward solutions benefitting both rich and poor.

May 26, 2011 by Capitalism Depression Great Recession

Sheep

Sheep

This past weekend was the Superbowl, a time honored tradition of getting together with friends, watching the game, cheering for fantastic football plays and watching commercials at halftime. I scoff at this as a continued hilarious process of entertaining the sheep, or the “sheeple” if you prefer. Sadly, I assert more people know the names of the quarterbacks of each team and not the names of their two Senators. Most people will know which team won the game, but cannot name which party has a majority in Congress. Lastly, the commercials will be recounted with detailed attention, but the average person cannot describe the details of the largest federal budget passed in history this last week.

I find myself an outcast because I don’t watch the Superbowl, or follow professional football obsessively. I admit I don’t follow any professional sports religiously, although I may know names, teams, or who leads a league at times. And of course, if I were invited to a game or race, I would joyfully attend. Preparing this week’s column I had realized I had no idea who was playing, and did not care. I realized a long time ago I had no interest in watching millionaires who made no contribution to society run around on a field or court. When the players make the news it is usually due to beating their wife or girlfriend, an affair, drugs, or shooting. But yet, our society idolizes these players that have near superhuman strength.

With President Obama’s populist push against the CEOs and executives of major corporations I must wonder why sports and Hollywood celebrities are exempt. The American people readily hand their money over to large entertainment corporations that provide obscene riches to a very few in an environment where nepotism is more likely to drive success than any type of skill. On the other hand, a successful businessman who risked his home, personal family life, and employed others is now demonized if he rises to a successful level. No one questioned the use of private aircraft and limousines by Paris Hilton, but the automotive executives that employ hundreds of thousands and whose company’s stock is owned by the masses were chastised by Congress for wisely using their time to travel via an efficient means. Ironically, Nancy Pelosi travels every week via private aircraft from Washington, D.C. to California at taxpayer expense but that is not questioned.

President Obama has made it clear that to succeed in America by hard work, rising through the ranks, managing people, and running billion dollar corporations is bad. However, it is acceptable to sign a hundred million dollar contract to play games for a few years, and even get paid if hurt. Or, like Conan O’Brien to get $30 million to peacefully leave a contract at NBC. As much as his populist agenda is being promoted, it scares me to think about a lottery society where success is measured by luck rather than a society that favors hard work, risk, and rewards success. Life is not fair, everyone is not a winner, but America has led the world by everyone having the opportunity to succeed regardless of gender, race, or economics. The Romans distracted the people with entertainment, ran lotteries, and controlled the people to take taxes, and control the people. Governments know when the people are entertained they will turn their backs on the important issues and trust others to care for them, just like sheep. Sadly, it seems like the American people have become sheep who do not care. Now, I must ask, “Who won the game?”

February 19, 2010 by Depression Great Recession Mainstream Media Obama Stupid People