The Real Bad Guys – Colleges & Universities

Whenever things go bad, people start pointing fingers.  You have seen fingers pointed at Wall Street, big oil companies, and Washington.  The truth is that we have all played a small part in this recession.  However, I want to talk about the detriment that our universities are having on our economy and society.

At a macro level, economics is the study of production, distribution, and consumption of goods and services.  To have a strong economy, you need people capable of producing and purchasing goods.  Are our universities creating producers and purchasers of goods?

The first item I want to talk about is the increased cost of tuition over time:

College tuition is increasing at an exponential rate.  This is causing an increase in college debt.  The average student debt went from $12,750 in 1996 to $23,200 in 2008, nearly doubling.  In just four years (2004 to 2008), there was a 24% increase in debt.  In 2008, 67% of students graduating from four year colleges and universities had student loans.

It used to be that if you got a college degree, you were guaranteed a job.  The cost was little for school and the benefit great.  The cost is no longer little and the guarantee for a job is gone.  Unemployment is high right now, despite numerous job openings.  The big problem is that we have few people with the skill set needed for the jobs that are available (mainly technical skills).

There is a new lower class and middle class developing.  The new lower class contains people who spent a lot of money on a degree they cannot do anything with or that is for a low paying job.  Many social workers now have masters degrees and while that helps them make a difference, financially, it puts them in a tough spot.  Even if they file for bankruptcy, that does not relieve them of their college debt typically.

The new middle class are being called by some as HENRY’s (High Earning Not Rich Yet).  HENRY’s are people with nice paying jobs, but loads of student debt; student debt has even surpassed credit card debt.  Because they are high earners, they are paying high taxes.  With the combination of high taxes and high school loan payments, the new middle class has decreased purchasing power.  Many can take up to 20 years to pay off all of their school debt.

I do believe there is a need for a great education at a low cost that has to be filled.  Public universities, like the federal government, have a spending problem.  Their simple solution to making their budget is to pass their cost onto their students, who really have no power.  Before, I mentioned that there was a 24% increase in tuition costs in a four year span.  Do you think a freshmen student in 2004 saw a 24% increase in value in his degree by the time he was a senior?  Public universities need to stop spending money on items that do not add value and provide a basic education that prepares students for the real world.

I do not see long-term growth in our country without tackling the costs of universities.  Our young adults are starting life behind financially with degrees that are offering declining value.

Personal Responsibility/Self Discipline…America Misses You

In the last two days, I have had two things happen that have helped me to see the importance of personal responsibility.

Yesterday, I met with a mortgage lender to understand what amount I could get for a loan.  I was quite surprised by the fact that I was approved for a loan that was much more than we could afford.  It made me realize that I could get into a lot of trouble if I wasn’t careful.

Today, I was reading an article about obesity and according to the World Health Organization, by 2015 2.3 billion adults will be overweight and 700 million will be obese.

While these two thoughts are completely different, they both deal with personal responsibility.  Currently, Congress seems to be on a path to pass laws that protect us from ourselves, such as the proposed laws to ban soda from school cafeterias or trans. fat from food.  Regardless of how many laws Congress makes up, they’ll never be able to protect people from themselves. Period.

Self discipline has deteriorated so much that the personal responsibility has been replaced with a sense of entitlement.  People feel they are entitled to welfare checks, free health care coverage, a good paying job, and a college education.

Politicians bank on this entitlement to get into office by promising the world to voters.  The message resonates with people because they feel they deserve all of the items being promised.  Congress is spending billions of dollars to help people w/o addressing the root cause.  The days of “Ask not what your country can do for you, but what you can do for your country” are long gone.

It is easy to sit here and complain about this, but this strong conservative blog always tries to have solutions to go along with the issues.  For the time being, I think there are some things we can do, such as tackle welfare reform. In New York City, they were able to cut welfare recipients down by 50% during the late 90’s with work requirements, imposition of sanctions, and mandatory workfare jobs. I will get into this more in future posts, but essentially, the government took a firm stance that you at least need to try to get a job to get a free check.

For the future, I think our educational system needs to focus on teaching innovation and leadership, along with the basics.  With a more volatile job market, people need to learn how to promote and motivate themselves.

Lastly, I believe that everyone has a circle of influence and that we can encourage those around us to be self-sufficient.  I believe that parents can teach the valuable lesson that you have to work hard to make it and that life is not always fair.  I really do believe that teachers and school boards can implement education policy that teaches leadership and self-motivation.  I believe that coaches of youth leagues can keep score to teach kids (and parents) how to win and lose.  Also, I believe there are politicians out there that can inspire us to be better.  I hope they do not take the easy way out and promise what they cannot give, but motivate people to be their best.

We can either take responsibility for our future and lead our circle of influence or we can be complacent/hypocritical and complain about all the people who do not take responsibility.  It is kind of like all the people who say they hate people who judge others, even though they are judging that group of individuals themselves.

This is your time to change your routine, even if it is mentoring one person, so that we can begin to mold this country.

Personal Responsibility…

Ronald Reagan, George H. Bush, and now President Obama gave a speech to the youth of America on the first day of school for many American kids.  I think it is completely appropriate for the President to give a motivating speech to kids going back to school.

It appeared by the text that the main theme was personal responsibility!  I love the theme and wish President Obama discussed it more to kids and adults!

I thought that it was an interesting theme being that most of the legislation passed by Obama and hoped to be passed in the future is all about removing the need for personal responsibility.  People who do not have money, health care, great jobs, or food are seen as victims in Obama’s speeches, not people who were not personally responsible.  It seems to be a contradictory message from a very liberal president.

In 1991, the democrats launched a nasty investigation against President George H.Bush when he gave his speech, including holding hearings, partnering with government accountability office to understand how the broadcast was paid for and more.  That was a political move and I am not going to make the same mistake the democrats made.  Instead, I thought I’d share some of my favorite quotes from the speech on personal responsibility by President Obama:

• “When I was young, my family lived in Indonesia for a few years, and my mother didn’t have the money to send me where all the American kids went to school. So she decided to teach me extra lessons herself, Monday through Friday.”
• “…at the end of the day, we can have the most dedicated teachers, the most supportive parents, and the best schools in the world – and none of it will matter unless all of you fulfill your responsibilities.”
• “And that’s what I want to focus on today: the responsibility each of you has for your education.”
• “You can’t drop out of school and just drop into a good job. You’ve got to work for it and train for it and learn for it.”
• “You’ll need the creativity and ingenuity you develop in all your classes to build new companies that will create new jobs and boost our economy.”
• “But at the end of the day, the circumstances of your life – what you look like, where you come from, how much money you have, what you’ve got going on at home – that’s no excuse for neglecting your homework or having a bad attitude.”

Good luck kids!

We’ve Landed on the Moon…Because of Competition

How cool is it that 40 years ago, a man landed on the moon?  The main reason we got to the moon, in my opinion, is because we had a clear goal to do so and we had a competitor trying to beat us there.  Who is our competition now?  Are we trying to be the best?

A growing number of politicians believe in transnationalism, a belief that the U.N. should have more power and the whole world should join hands and be happy.  If we are all to be equal, that means we will have to go down in GDP.  I believe America should be the best and we should compete to be the best.

As an athlete (or more accurately, former athlete), I believe competition pushes you to improve.  The competition helps give you incentive to be great.  I want to talk briefly about the government’s lack of internal competition and how it hurts us in numerous areas.

In government, if you do not spend the money in your budget, you typically lose it the next year. Congress has a seemingly bottomless pit of finances they can tap into.  There are no year-end performance reviews that determine an employee’s raise.  The inevitable result is that there are not incentives to be fiscally responsible but rather incentives to spend as much money as possible as irresponsible as wanted.

The average private school spends about $4000 less per child.  If the government started giving school vouchers to private schools and paid public schools based on the number of students, there would be a big incentive for public schools to increase the quality of their education.  Competition has the ability of driving great results!

What other areas do you feel our government can implement competition?