The College Tuition Disease

I been doing my homework now for a long time
And everything that I look for I know I will one day find
I'm a fool so I'm told I get left in the cold
Cause I will search the world for that fool’s gold 

                    Graham Parker 1976

$42,000 a year! That's what a friend recently told me it cost to go to Indiana University, my alma mater.  I had a great time there, and it's a pretty good school, but if you think your kid will be able to pay back $168,000 before they turn 35 with an IU degree, you're dealing thin.  The same could be said of just about any school in the country.

Skyrocketing college tuition has become a hot topic, with Time magazine recently devoting their front cover to it.  Many private schools have blown past $20,000 and $30,000, and are now in the 40s and 50s.  The average debt a student has after school is above $25,000, and for plenty of them it’s over six figures. The strange thing is that most articles that discuss the price don't even talk about the reason that it's going up, just the hardship.  It's as if somebody had a killer disease and all the doctors were only concerned with treating the symptoms, without figuring out what caused the problem in the first place.

Hopefully the following example will explain why prices are rising and how to quickly cure the disease:

Let's say you start a business that makes widgets.  You decide to charge $10 for each one. Unfortunately, you find out that the huge majority of your customers can't afford this price.  You quickly realize that you're going out of business unless you lower the price.  Just as you're about to do so, a man named Fast Freddie comes to town. 

Freddie's a great guy; all he wants to do is help people.  He starts loaning all your customers money so that they can afford the $10 widget.  You're thrilled, as now you don’t have to lower prices.  As time goes on you decide to test how nice a guy Freddie really is. You raise your prices to $15.  Obviously no one can afford it.  But Freddie steps in and lends even more money to your customers, so they can cover the $15.  You, being the sharp businessman that you are, keep raising prices because you, like everyone else, like money.  Before you know it, the widget that should be about $5 costs $50.  There's no end in sight.  As long as Fast Freddie keeps lending your customers virtually unlimited amounts of money, you're going to keep raising prices.

          You get this, right? Over 90% of college loans are now paid for by Fast Freddie, oh I mean the government. This has completely and totally distorted the free market, to the point that we have runaway inflation in college tuition. 

          The solution is simple. Get the government out of the moneylending business for college, and watch costs plummet.  But this is not going to happen. Why? Politics, like virtually everything else it seems nowadays.  No politician can get up and tell the truth.  He would immediately be criticized as a coldhearted, out of touch snob who is especially biased against the poor and middle class, who can least afford the sky high cost of college tuition. The sad thing? The current system hurts the poor more than anyone.  The rich guy or gal can either pay for tuition or have to borrow very little, so their kid doesn’t graduate with an oppressive debt load.  It's the poor and middle class that are now getting out of school as indentured servants.

          Go ask your father or grandfather what college cost before the government got involved. 

          Have a good night everyone.

 JR

Moral Dilemma

            This indecisions bugging me

If you don’t want me, set me free

Exactly whom I’m supposed to be

Don’t you know which clothes even fit me?

         The Clash 1981

 

Heading into the upcoming presidential election, I have a moral dilemma. This is one that I'm guessing a lot of people have before elections. Do you vote for the candidate that is better for you personally, or better for the country? In a perfect world the two are the same, but we don't live in a perfect world.

This time, it's about money. With Obama as president, it is ridiculously easy to make money on your investments. (I won't bore you with the details, but regular readers know what I'm talking about). This does not mean that you can’t make money with Romney in office, it's just that you have to do a little more homework. Actually a lot more. The problem is, overall Obama's economic policies are disastrous for the country. We're tipping back into recession (I actually think we're already there); if you think the last 4 years were bad, my friend, you ain't seen nothing yet.

So what would you do if you were in this type of situation? I first think what I would do if my profession were at stake. I make money representing injured workers. Let's say God woke me up one night and said that within 24 hours, if I voted yes, there would be no more workplace accidents in America. The catch is, of course, that within 24 hours I would be out of business. To me, this is an easy one. I've seen firsthand the devastation that physical pain can have on people and their families. I would vote to end the accidents in a heartbeat; I don't think I or anyone I know could live with themselves if they chose the opposite. Similarly, I would assume that all oncologists would quickly vote to immediately end all cancer if they could.

But yet, my gut tells me that when it comes to voting for the country’s financial well-being versus mine, I would choose mine. I'm not exactly sure why; I struggle to find the difference between this and the workplace example. Maybe I can hide behind the fact that I'm just one vote that realistically won't make any difference. Maybe if I had the only vote it would be different. Or maybe it's the fact that while I love America, I love me and my family more.

Whatever it is, I started thinking about it, and at least for me it's a tough decision. I would guess that this type of choice has to regularly be made by a lot of people in the workplace. Although in this particular example it won't make a bit of difference as to who is ultimately elected, I think it goes to the core of a person’s heart; are you someone whose interests lie primarily with yourself and those close to you, or with the greater good?

Have a good night everyone.

JR

 

Real Olympic Sports

              Take off your uniform
              They see what they want to see
          You should have never been born
          You’d better stay with me

          John Hiatt 1979

I am proud to say that I took my Olympic watching this year to an entirely new level of obsessiveness. First midnight, then 1:00 A.M., and by the end I was going to bed at about the same time my wife wakes up in the morning. Watching the Olympics on TV should itself be an Olympic sport. Which brings me to my topic tonight: if I was King, which sports would be eliminated from the Olympics. 

I've come up with a quick, easy system to determine this: 

1)       Any sport where the winner is determined 100% of the time by a referee's opinion has got to be cut. If there is no objective way to determine who won or lost (like points scored, fastest time, weight lifted, height vaulted, etc.), it has to go. So say goodbye to diving (sort of interesting, actually), synchronized swimming (still hilarious, even after all these years), and gymnastics (the older I get the more I can't stand this sport. I realize I'm a minority here).  

We’ll still keep the sports that can go to a judge's decision, but don't have to, like boxing. You can always knock the guy unconscious and not leave it up to a judge. There's always that.  

2)       You can’t have any sport in the Olympics that is a young kids’ game. Did you know that trampoline is an Olympic sport? No, seriously. There's a reason that the Olympics got rid of tug-of-war, which in the early 1900s was an Olympic sport (I'm not kidding, look it up).  

3)       We’re only going to keep sports in which the athletes have to excel in at least one of the following traits: Speed, jumping, or strength. The latter allows us to keep weightlifting, even if most of the athletes appear to be clinically obese. The corollary to this is we will only keep sports in which you actually sweat. Say goodbye to equestrian (beautiful, but give me a break), archery (actually cool looking, did you get a chance to see what a modern day bow looks like?), and air rifle. 

As an aside, you know a quick way to make the last two sports the top-rated in the Olympics? Combine the two, let loose a totally random animal for each competitor, and call the sport “hunting". Come on, you know you would watch this.  

(Please, no hate mail, I'm just kidding. Did I mention that I go to the zoo with my kids every month?)  

So there are the rules. This does not mean that the sports eliminated are not fun, cool, or interesting. My favorite show of all time was “O” by Cirque de Soleil in Las Vegas. I think this type of venue is more appropriate for the sports that did not make the cut. Similarly, I would love to go watch the best archer in the world and predict whether she's a better shot than the girl from Hunger Games. Just don't call it an Olympic sport.  

But since I'm not king, I guess we'll just get more of this. 

Have a good night everyone.  

JR

Minimum Wage Laws

 Hot soup on a campfire under the bridge
Shelter line stretchin' 'round the corner
Welcome to the new world order
Families sleepin' in their cars in the Southwest
No home no job no peace no rest
The highway is alive tonight
But nobody's kiddin' nobody about where it goes
I'm sittin' down here in the campfire light
Searchin' for the ghost of Tom Joad
                                           Bruce Springsteen 1995


          In the last five years, the term “living wage” has made its way into the political babbling. It’s generally used to justify minimum wage laws, with the idea being that all people have to be paid enough money for the work they do to live on. This therefore justifies the government involving itself in a financial transaction between employer and employee. The logic of paying someone a living wage at first glance seems compelling: you gotta eat, don't you?  

But dig a little deeper, and the logic breaks down. Let's look at it from both the perspective of the employer and the employee. The goal of businesses is to make money. Therefore almost by definition an employer will never pay an employee an amount of money that will cause him to lose money on the deal. In other words, employees are only hired because they bring more value to the company than what their wages are.  

For example, let's assume that an employer has to pay $10 an hour in wages and taxes to a particular worker. If that worker's labor brings $11 of revenue to the employer, he will hire the person. If that same worker’s labor only brings in $9 of revenue, obviously he won’t get hired; the employer would be losing money every hour.

          Therefore, from the perspective of the employer, he will continuously decrease the amount of employees that he hires as the minimum wage is increased. The federal and state governments can enact all the minimum wage laws they want, but it won’t affect how much value to the company the worker can bring to the table,  With the current federal minimum wage being $7.25, if the employee’s skills are only worth $7 to the employer, he will stay unemployed. 

From the perspective of the employee, I always find these living wage arguments kind of condescending to them. Now granted, the people making minimum wage are on the low and of either skills, education, or brains in our society. Or all three. As a workers’ compensation attorney for almost 20 years, I know these people well. I deal with them every day. But nobody is dumb enough to take a job that doesn't benefit them. If the wages do not provide enough for them to live on, such as for food, shelter, clothing, etc., they simply won't take the job. No one is putting a gun to their head to work for any amount of money. If there were no minimum wage laws an employer would love to offer the employee $1 an hour, as he’d make a lot more money. But the employee won’t take it, because it wouldn’t be worth his time.  

Some of the employees might choose to take a job less than the minimum wage to gain skills in order to later on make more money. Because of the minimum wage laws they don’t have this option. Others might realize that their limited education and skills are such that they cannot bring enough value to a company to justify even getting the minimum wage. Those people will stay unemployed regardless of whether they want to work for less, because of these laws.  The bottom line is, minimum wage laws cost jobs, in a predictable pattern.  

So what do you do for that small minority that genuinely don't have the ability to work? As we said, you gotta eat. Even someone like me, a believer in a radically reduced size of government, thinks we need some limited social programs, such as food stamps. It's much better to have a humane, charitable country that takes care of its poor than it is to distort the laws of classical economics. The latter never works anyway. 

Have a good night everyone. 

JR

Facebook 10 Commandments

Don't you know that no one alive can always be an angel

I'm just a soul whose intentions are good

Oh Lord please don't let me be misunderstood

I've got my faults just like anyone

Sometimes I lie awake long regretting

Some foolish thing, some sinful thing I've done 

                              Elvis Costello 1986

You've probably heard by now that archaeologists in Jerusalem recently dug up a second 10 Commandments, this one dealing exclusively with Facebook.  The following are my thoughts on whether I can obey or not.  Remember, these are God's rules, not mine.

1)    Thou shalt not post any comments about poop, pee, projectile vomiting, or any other bodily fluids coming from your sick child - Look, we’re parents, it's our job to take care of this stuff.  Let's just keep this a secret between us, okay?

2)    Thou shalt not have an extended Facebook posting conversation with your spouse - Come on, she’s sitting next to you on the couch, quit playing up for the fans.

3)    Thou shalt not announce when you are going on a trip - I guess God doesn't want you to get robbed.  I don't know though, are any of your Facebook friends really gonna rob you? I think it's also interesting knowing where people are traveling.  Which brings me to Commandment number…

4)    Thou shalt post pictures and comments of cool places and events you just got back from - Hey, at some point in my life when I have time I plan on traveling again, and I trust a friend’s opinion more than a travel blog.

5)    Thou shalt post cute comments your young children make – Personally, I'm not into them, but I get the feeling I'm the definite minority here.  I just either find them not so cute or don't really believe the kid said it.  The only logical conclusion is I'm a mean, cold person who hates children.

6)    Thou shalt post pictures of your happy children - Seeing pictures of kids smiling makes me optimistic for the future. The only logical conclusion is I'm a nice, warm person who loves children.

7)    Thou shalt not post more than twice a day - Obviously God is more lenient than I was here.

8)    Thou shalt occasionally tell your spouse that you love them, but shall not post constant PDAs - Should I say it?  Thinking, thinking… maybe not… still thinking… Oh, what the hell, it's just a blog; For reasons I think I understand but won’t comment on, my friends that have posted the most consistently and syrupy about their spouses have gotten divorced.  Just sayin’.

9)    Thou shalt tell everyone when you get fired – Huh? Where did this one come from? I've seen a lot of friends do this, and now that I think about it actually makes sense.  Most jobs come from referrals, and what better, more efficient way to get a new job than have the people that actually care about you looking.  Also, maybe it's just me, but I'm always hopeful that after they’re let go a buddy will go for broke, start their own business, and be rollin’ in it within 3 years.

10) Thou shalt post frequent, lengthy comments about events that you are at right now – YES!  There is a God, this is all the proof you need.  This cracks me up every single time.  There is nothing funnier than someone showing you how great a time they're having, by interrupting it to write about what a great time they're having.  Maybe it's me, but this kills me.  Whoever's doing this, please don't stop, my doctor says I need to laugh more. 

God I enjoy Facebook.

Have a good night everyone.

JR

                             

The End of the Republican Party

I said if

You're thinking of

Being my baby

It doesn't matter if you're black or white 

I said if

You're thinking of

Being my brother

It doesn't matter if you're black or white 

          Michael Jackson 1991

Right now the country is evenly split between Republicans and Democrats. Congress is split 1-1, and virtually everyone predicts that the upcoming presidential election will be tight (For my prediction, see here).  What you seldom hear discussed is who will be winning elections in the long term, say 20-40 years out.  I think the reason for this is most people feel like accurate predictions cannot be forecast that far into the future, and this particular discussion has to focus on race, which most people feel uncomfortable talking about.  I think you can make an accurate prediction, however, and I'll blog about anything.

          The Republican Party is going to lose virtually every election in the future, and that is based mainly on the birthrate of blacks and Hispanics.  The two demographic groups in the country that have the highest birthrates are blacks and Hispanics. You may have read the recent report showing that for the first time more than half of all new births in this country are from minorities.  The demographic experts tell us that whites will be the minority in the US by 2050.

          This is fantastic news for Democrats, and cataclysmic for Republicans.  The reason is simple; blacks and Hispanics vote overwhelmingly for Democrats.  More than 60% of Hispanics usually vote Democrat (although Bush did much better than this in 2004) and close to 90% of African-Americans typically vote Democrat.  I may or may not do a blog about why I think that's the case, but I don't think these voting patterns are going to change. 

          The bottom line is that Republicans better enjoy their election victories now, because they're not going to last.

          The interesting thing is, as the country becomes racially much more diverse, we may ultimately become more politically homogenous.  The Republicans will realize that without agreeing to more liberal positions that the Democrats favor, such as gay rights, Dream Act immigration reform, etc., they will have little chance of attracting new voters. Don't be surprised if by midcentury, and maybe a lot earlier than that, this country is much more homogenously liberal, at least on social issues.

Have a good night everyone.

JR

                   

For-Profit Synagogues

               Money changes everything

We think we know what we’re doing

We don’t know a thing

It’s all in the past now

          Cyndi Lauper 1984

          Here is a random thought tonight.  Would synagogues be more efficient, financially stronger, and less annoying if they were private companies, as opposed to tax-free charitable organizations?  Why is this important? Because synagogues don't really work financially (I’ve heard the same about churches, but I don’t have first hand knowledge).  The dues never cover all the operating expenses, so you know what happens next.  There is a constant stream of requests throughout the year to guilt you into paying more. 

You know the lines by now: “Our annual campaign”, “We want 100% participation”, “We’re having a dinner of honor for (insert name of great guy/ gal here), so please give to the shul to thank them for all their hard work” (by the way, as an aside, I love these people.  No, I luuuuuv these people.  Anyone who does a service for free that I benefit from immediately becomes one of my best friends).  Since I and most other members believe in the mission of the shul, we agree to pay more, and the shul lives to see another day.  You end up with the situation of smart, educated people who are not salesman frequently asking other smart, educated people for money.  Neither really enjoys it.

          We've become so accustomed to this way of running synagogues, that we never stop to ask is there a better way.  For me, whenever there's a shortage of money my first reaction is always: 1) Can the free market work it out? and 2) Is the government interfering?  If the answer to the second question is yes, the answer to the first question becomes no, and you end up with money shortages.

          In the case of religious institutions, we obviously have government interference because everyone gets a charitable deduction on their dues, which we all of course love.  It therefore becomes impossible for an individual to even think about running a for-profit synagogue, because nobody is going to pay dues that are not tax-deductible because of the competition.

And if an individual could compete with a for-profit shul?  Well obviously he (or she) would run it like any other business that's designed to make money.  He would make it as attractive and efficient as possible in order to have customers.  Just like any other business, if people were happy with the product he was delivering they would keep paying every year, and the owner would do well financially.  Otherwise the synagogue would go out of business.

The question is, is religion different than other businesses? Well yes and no.  For people like me in which religion play such an instrumental part of my life, the synagogue is a far more important entity for me than say, a restaurant or gym.  It forms the center of a community that is essential for helping convey to my children the values I believe in (2^nd aside tonight: the shul I currently go to is fantastic).  But God made the rules, and the rules are that religion operates under the same free-market principles as any business.  If I'm satisfied with the variables that make up a good shul (I like the Rabbi and the people, it matches my religious outlook, the dues are fair, etc.) I’ll stay a member; if not I’ll find another one.  Same goes for the restaurant.  If the food is good and the prices are reasonable I'll be a repeat customer.  If not I find another place to eat.

Similarly, a private individual starting up their own synagogue would have to provide acceptable services at a reasonable price.  There would be no more begging for money; just a set dues structure in whatever creative manner the owner could think of.  The congregants would either pay it or not.  He’d put all his effort into finding a financial system that not only barely keeps the shul open but makes it thrive.  You know why?  His financial life depends on it.  They’re his Benjamins, which makes all the difference.

Further, the owner could no longer rely upon volunteers.  He couldn't guilt people into doing work for free for the good of the community, as everyone would know that they're basically doing free labor for him.  For example, the owner of Prime Grill can’t say, “I know that steak cost $20, but I'm doing an annual campaign now and ask that you send me another $10 in the next three months or I'll be out of business.  I’m looking for 100% customer participation”.  Likewise, when people come in to eat, he couldn't say, “Could you do me a favor and for the next 15 minutes move some tables around for me?  I'm having a big event tonight and I really could use your help”.

The bottom line? I'm torn on this one.  Usually by the time I end these blogs I have a strong opinion one way or the other.  Not this time.  My gut tells me that private synagogues would be be financially stronger and provide better services for the community than not for profit, but I'm not sure.  Maybe religion really is different.  The amount of volunteer hours that is put into my shul on a monthly basis is astronomical.  Then again, the amount of paid hours that is put in by employees in for-profit businesses is far greater.

You know what? Now that I've had 41 minutes to think about it I think a for-profit synagogue would do better.  In any event, we’re never going to find out.

Have a good night everyone.

JR