Saturday, March 27, 2010

Musing on the cost of college...

Brad Delong, economics professor, blogger, expert on money stuff, has a sidebar on his blog noting that he's signed up for a speaker's bureau because "the Eighteen-Year-Old is going to college next year, which means that I need to think about making more money."

Which makes it a bit odd that he's got a guest post on the Berkely Blog called Is It Fair for Education to Be Cheap?

A man now on the hustings to raise money for college is well aware that "cheap" and "college" are not a likely pair.

What he's referring to is the subsidized higher education one can acquire at a public university.

In my state, the in-state tuition is about $22,000 a year, which makes the cost of a four-year degree close to six figures when it's all said and done.

That's not "cheap" education. Or if it is, I'd like to know how a family that makes today's average income of $50K can afford to send multiple children off to school and pay for it without loans.

The cost of private colleges are approaching $40,000 to $50,000 a year. So it's essentially priced out of the realm of possibility for many families, unless draconian loans are taken out or colleges slash tuition costs for poor yet desirable students.

Now I am some years away from writing out those hefty tuition checks – still writing out less-hefty Montessori checks right now, but I shudder to think of the impact college tuition will have our family's bottom line.

And I have twins, so for us, it will be college expenses x 2 students x 4 years x the older brother's college expenses.

We've started saving for future educational expenses, but as we all know, investments have taken a big beating thanks to the crash. For many families, money has been lost in the gamble know as the college savings fund. God only knows what influences college savings fund will experience when it is finally time to send my kids off to college. One hopes not to be on the wrong side of a market adjustment!

Back to DeLong's post on the fairness of cheap college education, a post filled with rather bold claims that don't seem to have a foundation in fact. Like this one:

"On the one hand, the people who benefit from public and publicly-funded higher education are primarily people who are or will be relatively rich...."

I'd like to know what Brad DeLong's definition of "relatively rich" is. Certainly, a college professor's salary does not make one "relatively rich" enough to set aside enough money to send the 18-year-old off to college without additional income.

The most intriguing of DeLong's assertions is this:

"If we don’t keep college cheap–and publicly-funded–we find it next to impossible to increase educational opportunity; if we subsidize college with public money, we are transferring from the not-so-rich to the relatively rich."

First, where is the "cheap" college education? And how is this money being transferred? Are state schools filled only with the "relatively rich?" Are only the not-so-rich paying taxes these days?

Instead of a strange post seeking to answer the fairness of an issue that doesn't exist, I wish bright economists would focus on answering the question: why has the cost of college soared in recent years? Why do American colleges and universities believe that students graduating from college loaded down with ever-increasing amounts of debt is a sustainable business model?

What has motivated them to raise their fees significantly each year? And what are colleges doing to bring costs increases more inline with the cost of living increases? If only the "relatively rich" can afford the debt needed to acquire a college degree, we're looking at an economy that's pricing far too many people out of college. That's not good for a nation interested in retaining its superpower status.

Sunday, March 14, 2010

Tim Geithner: Going Vogue

It will take a while, but you'll find him if you look hard. Page past the metal-clad Gucci model...

Past the the starved-looking girl in the Juicy Couture ad (note to Juicy Couture marketing execs: nothing juicy about anorexia!)...

Past Kate Moss wearing little more than a purse in a cab...

Past the spread on "the Warrior Way" (which has nothing to do with warriors and everything to do with "tattered minis strapped with shoulder armor and breastplates")...

Past the story on Tina Fey (but before the pic-heavy story on Robert Pattison)...

And there you'll find him.

Tim Geithner going Vogue, "on the money," spilling his guts about the bailout, all in the March issue of Vogue magazine.

Who needs the New Yorker and Atlantic profiles when Vogue is there to chat with the US Treasury Secretary about TARP and bonuses and all the other topics so dear to the hearts of Vogue readers?

The article opens with this:

"If last year's bailout of the financial industry caused you to start muttering words like investment banker and robber baron in the same sentence, it may cheer you to know that Timothy Geithner, the man responsible for crafting much of that bailout, agrees with you.

"'I am,' he says, seated in his Washington, D.C. office, an intimidatingly ornate room worthy of a Hogwarts headmaster, 'incredibly angry at what happened to our country.'"

Truly, he looks a little pissed - or kind of angry - or bemused in the pic they use to visualize the Secretary for us.

But even in Vogue, Tim Geithner seems to have a hard time conjuring up the look that suggests "incredibly angry."

Frankly, when I see a profile of Geithner in Vogue magazine, I see a White House press organization desperate to rehabilitate the Secretary's image. And when I see how Vogue describes the Secretary, I think this profile was a bit of a mistake all around:

"A lithe and athletic 48 years old, Geithner, who was named one of the 100 most beautiful people by People magazine (it may have helped that his brother works for the publication), has the the kind of looks that can go either way: Half an inch one way he's John F. Kennedy; half an inch the other he's Lyle Lovett."

God help us! Did not need to Vogue to help us visualize the Treasury Secretary as a JFK/Lyle Lovett combo!

Why Vogue? Are the Elle Woods of the world truly interested in what Geithner has to say? Are they wondering why their dollar is not buying as much Gucci any more? Or will they just page past Geithner in search of Robert Pattison pix?

Do Vogue readers really want the answers to why the economy crashed? Here's Geithner, on the "irksome aspect" of being blamed for the collapse:

"'Think of all the stuff that burned first,' he says. 'Fannie and Freddie, the investment banks, AIG, the monoline insurance companies – it was their collapse that broght the system to the point of panic, but those things were outside the scope of the Fed's jurisdiction. They all got dumped on us when they went bad, but we had no authority up front.'"

There are people who once thought the head of the Federal Reserve of NY should have been able to wield some power over the events that led to the crash. But apparently, according to Geithner, it was a position without much ability to impact the financial sector at all until all hell broke loose.

Vogue is on the money here:

"As the Obama administration's point person for a cratering economy, Geithner knows thing or two about unpopularity."

Progressives think Geithner has sold out to Wall Street. Wall Street thinks Geithner is too tough (according to Vogue.) Which makes Tim Geithner a very unpopular man today.

So Geithner's out on the trail, chatting up with reporters, giving them the skinny on the skinny guy at Treasury. Through Vogue, we learn what Geithner really thinks:

"'In the end,' he says, sounding very much like his political hero, Lyndon B. Johnson, 'it's not about what you believe. It's about what you can achieve.'"

The answer to a Treasury Secretary's unpopularity isn't multiple profile pieces in a variety of publications.

The solution is creating jobs. Reforming the financial sector so that the financial firms can never again drag the economy off the cliff. Reinstating accounting standards so that off-balance accounting, like that which Lehman allegedly practiced, is an immediate red flag to investors and regulators alike warning everyone that funny money is not the sign of strength and stability.

As a war room once reminded all its warriors: "It's the economy, stupid." And improving the economy would be an achievement we could all be happy with.

Innovation that makes you smile...

A video by OK GO 'This too shall pass." (And if this innovative production doesn't leave you with a smile, don't despair. Spring is coming...)

Having spent a portion of my career in production, I know this one-shot video was no easy task!

Friday, March 12, 2010


The Chi-rish are about to let loose.

It's St. Patty's weekend in Chicago.

Which means the Metra today let us know that there would be no glass objects or alcohol allowed on the trains this weekend.

Yes, we love our St. Patty's day in Chicago - it's our way to let loose during Lent. Unlike New Orleans, we still feel compelled to party hard during the time of abstinence. We dye the river a bright, unnatural green. And we all add an O' or a Mac after our name, no matter where our ancestors came from.

Everyone is Irish on St. Patty's Day! At least in Chicago. Not sure what it's like elsewhere. I've heard that until recently, St. Patty's day was a day to go to church in Ireland. That was until the Americans flooded the place wondering where the parade was.

I had no idea that booze was allowed on trains on other days! Just thought the people surreptitiously drinking beer out of gigantic cans during non-festive days was their surreptitious way of getting drunk before getting home.

According to a friend, some bars in Chicago will open at 7 a.m. on Wednesday, March 17.

A fab way to celebrate the saint who drove snakes out of Ireland...

(Wonder if Starbucks' numbers diminish in Chicago in March.)