Archive for the ‘Economics’ Category

Comforting?

March 10, 2020

Hopefully it’s comforting to know – as you’re paying off your student loan fees decades after you graduated from college – that part of your debt likely made it possible for student athletes to receive scholarships so they wouldn’t have to graduate with student loan debt.

Maybe there should be an arrangement whereby this is tracked better,  so that athletes that graduate – or don’t graduate but leave college early to sign on with professional teams – pay back their scholarship monies, and appropriate amounts can be refunded to each student who attended during that athlete’s time at the school.  Or perhaps it could just be applied to outstanding student loan debt on a per student basis?

Otherwise, non-athlete students are paying for athletes to attend school for free in hopes of receiving high salaries as professional athletes.  Which sure doesn’t seem very fair to me!

 

 

It’s Not About the Money (But it is)

March 5, 2020

California has suffered the first death from the corona virus.  News reports indicate an elderly adult with underlying health conditions died from this newly identified virus.

In the meantime, without much fanfare and despite increasingly dramatic efforts to convince the population of the benefits of  flu shots, over 10,000 Americans have died from the flu so far this influenza season.  Ten thousand deaths, 180,000 hospitalizations and 19 million estimated cases of the flu this flu season, but California declares a state of emergency over one death.

Governor Newsom insists the move isn’t about money, but about mobilizing resources.  Said resources including additional Federal support, of course.  The City of Los Angeles also declared a health emergency as they have seven reported cases.  All of which certainly has nothing to do, I’m sure, with the fact that the US House of Representatives approved a bill for $8.3 billion dollars to be used in dealing with corona virus issues, and President Trump could sign off on it as soon as Friday.

The flu doesn’t qualify as a health emergency apparently.  Otherwise the more than 150 flu deaths in the state alone surely would have prompted a state of emergency declaration.  Money appears to be plentiful, as just a few weeks ago Governor Newsom was demanding $1.4 billion in new appropriations to fight homelessness.   And of course he wants to expand health care coverage to undocumented senior citizens at a cost tag of perhaps $80 million.  And facing the prospect of reduced incoming Federal funds because California doesn’t want to go along with Federal immigration laws, I can totally see how the decision to declare a state of emergency has nothing at all to do with money.

We’re apparently swimming in that.

 

Proportionate Love

February 14, 2020

Very interesting bit of Valentine’s Day news – for a change.  Delta Airlines announced they are giving their 90,000 workers a cumulative bonus of $1.6 billion dollars.  The details don’t indicate whether this is a one-time thing or part of an ongoing profit-sharing program.

Curious monkey that I am, I ran the math.  The video indicates every one of the 90,000 employees will get an additional two months worth of pay.  If you divide $1.6 billion dollars by 90,000 employees, it comes out to just shy of $18,000 each.  Sounds impressive!  Divide that by two, and you get a monthly salary of nearly $9000, or a salary of $108,000 year.

Managers and other specialized and upper-level administration types may get $108,000 a year (or more), but many employees get paid half that.  Or less.  So many employees will end up with a two-month salary bonus of $7000 or so.

Don’t get me wrong, it’s still an amazing thing to do and undoubtedly a huge help to many employees and their families.  But it would have been fascinating if they had just divided the $1.6 billion up equally among all their employees.  It would have meant that top earners – like CEO Ed Bastian, who pulls in tens of millions of dollars a year in salary – wouldn’t much notice the extra dollars (and could have added a PR bonus by not taking the bonus himself!).  But it would mean the lowest paid workers would get a bonus that could really make a huge difference in their lives (either for better or worse, to be sure).  I imagine when you earn $20 million or more a year not many bonuses make too big a difference in your immediate living situation.  But if you’re making $15/hour, wow.  A $17,000 windfall (before taxes, of course, which could be challenging to some unprepared for that hit) could be a real game changer.

Likely Bastian is stinging a bit from last year’s exchange with Bernie Sanders, who accused Bastian and Delta of enriching themselves at the expense of poorly paid lowest-tier employees.  If Bastian had really wanted to do so in style, an across the board, equal bonus for everyone would have really made a statement.

 

 

Need and Demand

January 15, 2020

This is an inspiring article talking about changes in the way restaurants handle excess food.  Instead of just throwing it away, there are a variety of organizations created to help them repurpose it without excess cost (man hours, etc.) to themselves.

But I found the most interesting – and least explored – aspect of the article occurred in the first two paragraphs.  A baker wanting to donate excess bread to a homeless woman’s shelter or even directly to homeless people in Los Angeles’ Skid Row discovered nobody wanted it.  Which to my mind says that hunger may not be the major issue for some of these people.

I’m all for repurposing food and helping to ensure it doesn’t go to waste.  And I believe there are hungry people who need it.   But what if that’s not the case?  At least not on the scale we imagine it to be?  In a patchwork of city, state, and national programs to assist in providing money for food, and in addition to countless non-profits and churches that also seek to help the hungry, is the nature of the problem changing?  Is hunger less of an issue for some people – like the homeless – than we imagine it to be?  Does this indicate a change in the homeless culture itself?

A local school district is facing financial challenges (of course).  One of the proposed solutions is to scale back the free breakfasts the schools offer to any student who wants one, to just those students who are verified as needing it.  I’m sure the breakfasts were made available to every student in order to eliminate the stigma of a breakfast only available to the verifiably destitute.  When I was growing up it was a stigma to not be fed at school, because the school lunches cost money and my family could only afford to send me with a packed  lunch.  Now the situation seems to be reversed?

I’m curious about why the shelter said no to the bread, and why the homeless themselves weren’t interested.  I’m sure the shelter can only use so much bread on a daily basis, but again, if people are dealing with hunger at the levels often touted in our media, it’s hard to imagine them passing up free food.

Unless they’ve discovered a better option.  In which case, we should be paying attention to that shift to make sure that unused food gets to those who actually need it.

Definitions

September 10, 2019

An interesting little piece on real estate and ministers.

I certainly admit to thinking ministers of Christ should think carefully about the decisions they make in regards to where they live – as well as most other areas of their lives as well.  This article raises some interesting questions that are not often asked (or reported on).

At some  point there was apparently an acceptable rationale justifying a 9000 square foot house for the residence of an archibishop.  Many people think that’s funny or unseemly now, but I’m curious as to the original rationale.  Was it an emphasis on the archbishop’s position and authority/influence/prestige?  And here I mean the office of archbishop, not the person who might happen to hold that office at a particular point in time.  Does real estate have a valid role to play in such a commentary?  I imagine a lot of those answers have to do with aspects of Roman Catholic theology I’m not familiar with, but I presume they exist.

It’s easy to point fingers and say that’s too ostentatious, that’s too big.  Except that those notions are acculturated in and of themselves and therefore not necessarily any better than the original assumptions behind building/buying the house.  I applaud the new archbishop’s commitment to “examine everything – including the home that I live in that the people of God provide me” in terms of Christian witness.  But I question a too-hasty, knee-jerk reaction that says any domicile over a certain size or monetary value is automatically inappropriate.

It all depends on how it is used.

There is a nod-wink later in the article to the parties hosted there.  That quote clearly seems condemning of the place and it’s at least occasional use, though the new archbishop specifically says his refusal to live there is not a condemnation of his predecessors.  Were the parties entertainment, as one might think of a wealthy person providing for amusement, or did they serve other purposes?  Does the Church necessarily need to hold meetings in a Denny’s?

Does the archbishop have a staff that supports him in his work?  Cleaners?  Secretaries?  Administrative assistants?  Do they live in the house as well?  Could the house be utilized for multiple purposes, or more appropriately perhaps, could more people live there than just the archbishop?

In other words, it’s easy to look at a price tag or a size or a zip code and pass judgment.  But judgment should take all aspects of the situation into account, both historically, for the present moment, and with an eye towards the future.  It could turn out that renting or purchasing another smaller place might in the long run by more costly than just living in the current building, especially if the current building could be thought of in terms beyond just one person’s abode.

To be certain, there are abuses of the collar and some of the other examples in the article seem to be good examples of this.  But size or cost is only one aspect of considering the appropriateness of a house – or a car, or clothing, or food – utilized by a minister of the Gospel.  Having a large space can provide other options if people are willing to explore and consider those sorts of things.  And I’d have to say if anyone is capable of doing a good job in thinking through sacred space or the use of space for the people of God, it’s probably the Roman Catholics.  I pray they have some good folks working on this situation, and that the resolution is definitely a reflection of the Church’s mandate to equip people (including clergy) to daily think through how to love God and love their neighbor.

Free Tuition?

August 12, 2019

Democratic candidates are stumbling over themselves in a bid to offer the most sweeping promises of college student loan debt to young voters.  Elizabeth Warren and Bernie Sanders are the most detailed and perhaps the most generous of the candidates in this respect, offering partial loan forgiveness based on current earnings (Warren) or complete forgiveness of all debt regardless of current earning levels (Sanders).

It’s a smart ploy, of course.  College tuition has skyrocketed in the past 40 years and now even in-state students can easily rack up tens of thousands of dollars in loan debt – per year – at a public institution.  The local state university near me estimates $30,000 a year for an incoming, in-state freshman living off-site.  Just tuition is over $12,000 a year.  What a campaign pledge – imagine not having your student loan payment any more!

Funny how none of the candidates are questioning the outrageous tuition rates.  Funny how none of them are questioning whether it is reasonable, rationale, or moral to set a 4-year degree as an expectation for every single person in our country, regardless of their aptitude or the necessity or applicability of such a degree to the work they’d like to do.  Funny how the party that likes to portray itself on the side of the working person presumes that the average working person should be a college graduate no matter what the cost.  In fact, the cost is irrelevant because if you vote for us, we’ll eliminate the cost!  Well, the upfront cost.  In reality, you’ll still be paying college tuition not  just for yourself but for everyone else through higher taxes and other fees imposed either personally on you or the financial institutions you rely on who will pass the costs on to you.  For the rest of your life.  But right now?  When you’re 18 or 25?  Poof!  No more $500 student loan payment a month!  You’re instantly richer!  If you vote for us, that is.

This is what I call the short-term view of the situation, though.  Trading student loan forgiveness for short-term votes.  What I believe is going on though is a much bigger and long-term play for votes.

Universities and colleges – especially public ones – are overwhelmingly liberal/progressive/Democratic in outlook and philosophy, both as institutions as well as in terms of the personal views espoused in and out of the classroom by professors as well as in the textbooks used.  Of course Democrats are going to push for everyone to go to college, because by and large everyone will be exposed to the ideologies and assumptions that undergird progressive/liberal platforms.  While this will obviously be the case at public institutions, it will also be the case at many private ones as well.  I’ve talked with multiple recent graduates from the local private, Christian university in town.  They jokingly laugh about how they entered the school with one set of ideas – generally more conservative and traditional both politically and spiritually –  and emerged with a more progressive/liberal set.  Some can recognize this and chuckle about it – sometimes.  But I don’t see many of them resisting it very much or very well.  To get through the system you need to at least be able to repeat what they want you to say, even if you don’t believe it or agree with it.  Do that often enough, and it’s hard not to internalize the ideas you are required to regurgitate.

So of course Democrats want to subsidize higher education.  It’s in their best interests in the short term (since once this becomes a policy, there will be a gradually decreasing level of  support and therefore votes specifically for the Democrats as the ones that inaugurated the policy).  But it is also in their best interests for the long haul.  They have the best chance of creating people who agree with their policies if everyone goes to college.  That’s a frightening reality, but not a very far-fetched one, unfortunately.

As a former college educator I highly value education.  But I question the outrageous costs associated with it, and I question why nobody wants to tackle that question seriously.  I also question the honesty of trying to prep everyone for college as though this is the path to financial success.  The past decade at the very least has shown this is not necessarily the case any longer.  While there are some  professions that legitimately require not just a four-year degree but more advanced degrees beyond this, for many professions and companies a 4-year degree is just a box to be checked off on a job application rather than a directly relevant matter of knowledge and experience.

Voters should be skeptical of the plan to offer free college education.  Not just financially but ideologically.  On both fronts, this isn’t nearly as good a deal as it sounds (and frankly it shouldn’t sound like a very good deal to anyone with the ability to think clearly – college-educated or otherwise!).  The government offering to subsidize an industry is pretty much a guarantee that costs will rise and quality will drop in that industry – at least if health care is any gauge.

Socialism and Sin

June 24, 2019

I’m not a socialist.  Not because I don’t think that this model isn’t attractive, but because of my understanding of human nature and the issue of sin.  Contrary to the popular optimism of socialism in general and particularly current advocates for socialism in America, history is one long description of humans wracked with sin.  Some of them wealthy, some of them not.  Some with good intentions and some not.  Utopian ideas rest on the idea that we will eliminate or overcome these traits so that socialism can function properly, otherwise it is doomed to failure.

This is a fascinating and brief article on how people who do like the idea of socialism see things.  Or at least how some of them see things.  I’ll just comment briefly on some of the assumptions I see inherent in this mindset.

The article is spawned by the split between the world’s richest man, Jeff Bezos, and his ex-wife, Mackenzie Bezos.  Since there was no pre-nup agreement, she is now in her own right a multi-billionaire, and has pledged to give a great deal – perhaps all – of that wealth away.

The author of the article thinks that this ought to be standard operating procedure for billionaires, and that this should be achieved both through taxation as well as changed social expectations for  billionaires.

It’s interesting to me that ultimately the goal of this author isn’t simply to increase philanthropic giving by the richest people in the world, but to actually reduce their overall net worth and prevent them from maintaining or increasing their net worth.  In other words, it isn’t enough to give some of your money away – you should give it away until you’re no longer a billionaire.  Since there are only 2000 or so billionaires in the world, this seems like a manageable process, I suppose.  But it also strikes me as arbitrary.

As the author states in the fifth paragraph of  the article, the goal is not philanthropy but the elimination of wealth inequality.  Philanthropy is merely one mechanism – along with higher taxes and altered societal demands/expectations – by which to accomplish this.  But why just billionaires?  Presumably, when we have eliminated billionaires through these mechanisms, the attention will then shift to multi-millionaires.  Anyone with a net value of over $500 million perhaps.  But then when that is accomplished, the focus will shift lower, to $100 million or more.  And where after that?  What will wealth equality look like?  When everyone has a million dollars in the bank?

It may sound easy and reasonable to demand that billionaires divest themselves of their money, but how low can you go before people begin balking at the demands made of them?  Frankly, the average middle-class family in America is vastly more wealthy than a stunning percentage of the rest of the world.  When do we start forcing them to divest themselves of their wealth?

I think a better articulation of the author’s real goals would be helpful here.  What is the expectation in terms of wealth equality, and how is it sustainable over time?  What are the mathematical models that demonstrate it is both possible and sustainable?  Alas, mathematical models are not so good at accounting for human nature and sin.

Also, let’s define what the author means by giving away nearly all of their wealth.  Is $900 million acceptable?  $100 million?  $1million?

It’s interesting that this process is to be vigorously monitored.  Watchdogs are to be responsible for insisting that such a divestment of wealth is not simply undertaken, but that it is undertaken well.  And here I’m confused.  If wealth equality is the real goal, then why is the concern over ensuring that well-vetted humanitarian programs are the recipients of the monies?  What if J.K. Rowling decided to just write out checks to individual people for one million dollars (or whatever the assumed amount of wealth equality will be)?

I assume that’s unacceptable because many people wouldn’t know how to handle that sudden windfall.  There would need to be support services and mechanisms to help them.  To prevent them from falling back into an inequal wealth situation.  More watchdogging and regulation etc, etc, etc.

I also find it interesting that the author feels that there is no need to invent new philanthropic organizations or  mechanisms, and those that choose to do so are castigated for this.  Wouldn’t you think that someone capable of inventing Amazon or Facebook might be equally skilled at coming up with new ways of doing philanthropy and addressing humanitarian issues?  Again, a curious insistence on regulation rather than recognizing that someone who amasses billions of dollars might be rather good at other things as well.

None of this addresses the issue that millions of dollars are donated annually to very good causes.  Yet despite high-profiling and large amounts of money, malaria is still a very real threat to much of the world and poverty does not seem to be appreciably abated in most of the neediest places.  How is throwing additional money at these problems going to fix them to a point where wealth equality then becomes feasible?

Good intentions can be derailed by sin.  Dishonesty, greed, envy – these are deeply woven into our human natures.  Hence the need for constant vigilance in the socialist future envisioned by this author.  But such vigilance seems ultimately to be inadequate.  I’m not saying that we shouldn’t try to improve the human condition, but simply forcing people to give up their money to other people hasn’t – historically – been very effective for very long.  Politics and economics alone are inadequate to dealing with our human situation.  Until we take seriously the theological aspects, we are doomed to continued failure.

Slow Moving Train Wreck

May 1, 2019

The Los Angeles Times reported today that for the first time since records have been kept, the county of Los Angeles experienced a growth rate of 0% last year, and California as a whole grew by the smallest amount since we’ve tracked these sorts of things.

The article duly noted a variety of potential causes for this slow in growth rate.

  • Fewer immigrants from Mexico and more from Asia.  Asian immigrants apparently on the whole are better educated than Mexican immigrants, and better-educated people tend to have fewer children.  Tuck this particular detail away in your memory for just a moment – we’ll come back to it.
  • Native-born Americans have been experiencing a decline in birth rates for years.
  • A lack of housing (affordable, of course) is another possible contribution to slower growth rates as people can’t afford to move here.  Or stay here.
  • Economic uncertainties over the past 20 years are also likely to blame as people are less able or inclined to have kids in rugged economic times.
  • Natural disasters such as the devastating wildfires of 2017 and 2018 contributed to a rearrangement of population in certain affected areas.
  • California lost roughly a million people between 2007-2016.  Six million people moved out of the state and only five million moved in.

What the article didn’t see fit to note is the popular idea – pushed for the last 50 years – that we are overpopulating the planet.  This idea – pushed in schools particularly – is likely to take psychological root in many people who then decide to have smaller families.  The longer you’re in school (the better educated you are, as per above), the more often you’re going to hear this over-population mantra and will likely feel greater pressure to respond to it by not having lots of (or any) kids.

However the article mentions in passing the completely devastating this false idea is and will continue to have on our society as fewer young people struggle to support a larger population of older people.  Is it any wonder that socialism and a restructuring of our economy is gaining popularity among younger generations?

Also not discussed in the article is the trend for people to wait longer before marrying.  I’d presume that there is a corresponding delay in having children, at least among people inclined to think that those two things are related.  And if you aren’t marrying until your very late 20’s or early 30’s, and need to get your economic ducks in a row before contemplating children, then it’s going to be getting more and more difficult (biologically) to get pregnant and carry to term.

And I wonder about possible links about delaying having children and whether people who have built enjoyable lives without children are having a harder time considering adding children to the equation and spoiling some of the fun.

No conjecture was offered as to why more people are leaving than coming to California, but many Californians will quickly offer some explanations – over-regulation, over-taxation, and a disconnect between the major population centers and the rest of the state.

Lots of factors to consider, both ones that the Times chose to talk about and a few it didn’t think to mention, but which likely have a real impact as well.

 

 

 

Poverty Colored Glasses

April 30, 2019

An essay which recognizes the narrative being pushed in certain segments of our culture and society isn’t just divergent, it completely ignores reality.  It has to, otherwise certain economic and political aspirations can’t possibly succeed.

There’s a good reason for that, but we’re in danger of being lulled into a false depiction of reality.

Your Money at Work

October 19, 2018

How do you help cope  with the devastation of Hurricane Michael in the Southeastern United States?  Lots of ways come to mind.  You could volunteer your time.  You could send money.  You could rally others to do these things as a group.

Or you could fly 15 dogs to Santa Barbara from Florida.

Something you might want to consider the next time you’re hit up to donate to the Humane Society.

I can’t honestly believe that this was the most cost effective solution to the situation.  Surely there were shelters closer that could have accommodated these animals at a fraction of the cost?  But to fly them across the country?!  Are they going to be flown back at some point once the influx of storm-related loose animals abates?

I speak as a dog owner and dog lover.  This just sounds like a ridiculous waste of money, and yet is being promoted as somehow wonderful.  I’m glad these dogs are safe and that other animals can be safe because of relocating existing shelter animals.  It’s one of those logistics that I wouldn’t naturally think of.  But I also wouldn’t naturally think of relocating them to the entire other side of the continent.