Higher Ed

Darwin writes here about how everyone’s getting a college degree these days, and the economic consequences.  I was going to leave a comment, but I finally just decided to hit the ‘like’ button and be done with it.

Mr. Magundi laments the consequences of collegization for communities, but offers a hopeful solution:

We have raised the price of higher education to the point where it may simply be ruinous even for comfortably well-off families. And so we may end up abandoning the university system as we’ve built it up, in favor of a system where we stay home for most of our higher education, perhaps in community colleges, or in some similar institution we haven’t thought of yet. Educated people might get in the habit of thinking of the place where they grew up as home. And in spite of the disadvantages to Harvard and Cornell, I think that might be a very good thing.”

Am I the only one horrified that you can’t get a decent catholic college education without taking out a mortgage on your life?  Though I think charities such as Mater Ecclesiae Fund have their hearts (and wallets) in the right place, I find it frankly predatory that catholic colleges will load students up with such levels of debt to begin with.

Yes, I meant that.

***

Meanwhile, Public Discourse is running this essay.  The gist: the political science education offered in the Ivy League in the 1990’s let ideology get in the way of reliable scholarship — to the detriment of the State Department today.  Well, funny about that.  Because those of us getting our int’l poly-sci degrees from Backwater State U, we were studying under some of these guys.  Taking courses like “Islam, Politics and Revolution”.

–> And happily for the State Department, some our grads found their way to Washington.  So not all is lost.  Most of us local-U grads grow up to be, well, locals.  But we let loose a tithe of our debt-free adventurers, to go assist our better-indoctrinated educated brethren up north.

So if our government should get something right, you know who to thank.

Just kidding.  Sort of.

Dear Caesar,

Finally got the taxes in the mail.  Summary of my thoughts for the 2010 season:

• Gee those forms are getting complicated.  I had all easy ones this year, so no big deal.  But wow, that’s a lot of laws.  I printed off a 1040EZ for my form-loving daughter to play with, remembering the nice simple document the EZ was last time I looked at one, over a decade ago.  Not so.  Even the EZ isn’t EZ anymore.

• Making work pay?  Mmmn.  Well, I appreciated the discount.  But . . . a) What about our federal debt?  and b) See “complicated forms” above.  Always one more thing.  If we can afford to lower taxes, let’s just lower them, no Schedule M required.  If we can’t afford to, then what’s with the populist pandering?

• (Yes, I know what’s with the populist pandering.  Yes I do.  Smart Alek.)

• I kinda missed getting my packet of forms in the mail. I think the move to 100% digital was brilliant, and a necessary cost-saving measure.  In the end I printed out my 1040 instructions and stuck them in a 3-ring binder, which turned out to be much easier to work with then the old newsprint booklet.  But despite all that, I did whine a little . . .

• Because I like getting stuff in the mail!  Plus that big envelope is handy when you have a lot of forms to send in!  I had to stuff everything into a little office envelope this year, ’cause it was all I had lying around.  Plus, I almost forgot to do my taxes — (I know!) — because there was no 1040 booklet sitting on my desk to remind me.

• Still, I support the switch.  IRS gets a thumb’s up once again on a useful and well-run website.  Was able to find everything I needed easily.  Well done.  Yay IRS.

• LOVED the fillable Adobe forms this year.  That was a highlight.

• Count me in the six remaining people still mailing in paper forms. I was pleased to see there’s now  a free electronic filing option for those of us who do our taxes by hand.  But sorry, not enough info on which company is running the program, and what their reputation is, and all of that.  I would have used the electronic file if the IRS were running it themselves.  I’ll consider outsourced e-file in the future, once I get more info about how it worked this year on the guinea pigs.

In all it was  a pretty good tax year, probably my fastest one in the past ten years.  No weird stuff to monkey with, so the spreadsheet was ready to go as-was from 2009.  Our real federal income tax rate was about 4%.  That’s not counting self-employment taxes, medicare or social security.  Just the amount of income tax  as a percentage of gross income.

Sounds low, but I don’t think it is.  –> Taken as part of the larger tax picture, where you add in state income tax, the various social welfare taxes, property taxes, etc., that percentage seems okay to me.

Which tells me maybe the federal debt equation is better managed by spending less.  Hmmn?

***

If anyone is game for comparing real federal rates, I’m curious.  Please don’t post any income information! Just the ratio of the total federal income tax you owed (roughly, line 55, less any credits from lines 63-71) as compared to your gross income on line 22.

This will be a very individualized number, so kindly refrain from explaining it, since you may end up sharing more personal details than are seemly, even for the internet.  Just the percentage.  That’s what financial policy geeks care about most.

Wake up! Hey, Wake up!

That’s what my then two-year-old used to shout at his baby sister in the next seat when we arrived at our destination.  The parents were not amused.

These two articles might not amuse you, either.  But if you need to be really grumpy, these’ll do it.

–> I’m continuing with the regular-life-requires-my-attention-theme, so outsourcing my invective to ‘things that showed up in my inbox’.

From Christian LeBlanc, interesting link to an essay on contraception and the fall of the west.

The West lasted from AD 732, when Charles Martel defeated the Muslims at Tours, until 1960, where it fell without a battle. In 1960, the birth control pill became widely available. Many think of it as heaven, sexual nirvana, the route to self-expression, wish fulfillment, and liberation for millions of women. I think of it as Auschwitz in a bottle. It was and is genocide, as, using it, the women of my generation happily traded off 1,200 years of unparalleled growth, wealth, security, stability, scientific and ethical progress for a second BMW in the garage.

I’m not persuaded of author’s provocative conclusion (“Islam is the only way”), but the irony is there.  In the 19th century the French quit reproducing — yes, before effective contraception became widely available — and by the late 20th were wringing their hands over the cultural impact of all the muslims they’d imported to do the labor of the children they’d never had.  Germany has followed suit, and the US isn’t far behind.

(Though, luckily for our culture, we are importing truckloads of macho catholics with their awesome mariachi masses.  Maybe God does love us more?  Kidding.  Really.  The French have Brie — if that isn’t love, I don’t know what is.  But yes, I do like a rousing Spanish mass now and again.  Perks up the excessively-somber soul.   And as much as I am moved by the beauty and devotion of faithful muslims at worship, no, I can’t slip down to the corner mosque for a mini-revival.)

Anyhow, key point of link for me is this:  You can’t refuse to bear children, then get all shocked and horrified at the presence of the people you imported to do the work of the offspring you never had.  You want someone t0 mow your lawn and do your dishes?  Either rear yourself a pair of middle-schoolers, or hire someone else’s.

[Teenagers everywhere are now saying aha!  You really did raise me to be a slave! The mother points out that she does a thing or two for her own children that she doesn’t do for the random low-wage stranger.  Indeed, here may lie a bit of the problem: rather than a steady flow of youngsters who do the grunt work for a decade and then move on to greater work, we attempt to create a society divided between perpetual overlords and perpetual economic-teenagers.  And then are shocked, just shocked, when the daring, hard-working, self-sacrificing immigrants turn out to be just like our own children — ready to move up in the world after a spell.]

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Your other link is this article from the HSLDA, from Swedish parents who moved to Finland in order to homeschool.  I will use this as my cue to get off the internet educate a few fresh faces of my own.

****

PS, castle news: We got a new roof.  Looks a lot like the old one, only much, much younger.

 

 

 

 

 

Fr. L. on the gambling industry.

More yes.  This is all true.   Over the past dozen years I’ve spent a lot of time in Vegas.  I’m familiar with the city, inside and out.  (Surprise: I prefer “out”.  Red Rocks, to be precise.)

To Fr. Longenecker’s comments I’ll add that gambling generates no wealth.  It doesn’t feed, clothe or shelter any better than my sitting on the porch playing 3-men’s morris does so.  (Except, in that case, I get to spend time with my child, teach some strategy, get my rear whipped by a 4-year-old . . . yes, there is all that.  The bulk of casino gambling doesn’t even pretend to give us that much.)

Gambling does redistribute wealth.  If you need a method to get cash from the hands of wealthy private-jet owners into the hands of waitresses, well, yes, that is one way.  But what Fr. L says about the industry is absolutely true, including the addiction and family-destroying and saving-depleting bits.

He didn’t mention the associated crime, but you can count on that too.  When you take a whole bunch of people who want something for nothing and stick them all together in one place, it’s not exactly a surprise that greed crosses legal lines here and there.

–> This isn’t some fundamentalist getting his rear in a wad because you like to play poker with your friends.  It’s not about whether games of chance are somehow evil.

But when you pray that prayer about “lead me not into temptation”? It implies a responsibility to avoid leading your neighbor into temptation either.

You want investment?  Build a farm, or a factory.  A school even.  (Or, go crazy, send a guy to seminary.  That’s an investment.)  The gambling “industry” is not industry at all.  And you go there to spend your money, and end up spending yourself as well.

Sunday Thoughts

Three of them:

1)   Months on end spent vomiting really is excellent preparation for parenthood.   Allows you to stand calmly in the bathroom door at midnight and give your child practical tips for dealing with her stomach virus.  And you are thinking, “Ha.  Wish I couldda kept my popsicles down when I was pregnant with you.”  But you don’t say that.  You are tender and encouraging, and very pleased with the thought that the likely break is coming not at 14 weeks, or 24 weeks, or heaven forbid 40 weeks, but probably in just a few hours.  Still, you will be quite happy when it is all over.

2)  P.G. Wodehouse.  Our friend.  Just the companion for the restless mother, relaxing in the wee hours between pep-rallies in the bathroom.  Better on the second reading, I’ll add.

3) H/T to The Pulp.It for this article on why you should not shop on Sundays.  And since I am not afraid to be insufferable, let me just totally ruin your plans . . . Going out to brunch does more of the same.  Just say no.

Sunday:  Get up.  Get a shower.  Go to Mass.  Come home.  Rest.

Works great every time*.  Try it.

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*Actual mileage may very, subject to some limitations due to VOMITING CHILDREN.  DID I MENTION VOMITING CHILDREN?!  Actually just one of them.  SuperHusband took the healthy people to the usual mass then penitentially kept them out on the playground awaaaay from the ill sibling.   I went to the Spanish mass after lunch.  Lovely Mass, need to go to it more often.  Note to self: Learn Spanish.  Worth the risk.

Hoodlum-Loving Pro-Life Ninjas

The reference to ninjas is tucked inside Simcha Fischer’s otherwise apolitical posting of a Loretta Lynn housewife song:

It seems like a pretty good follow-up to the March for Life, doesn’t it?  You know, that day when hundreds of thousands of ninjas march to show their support of women and babies.  I say “ninjas” because they somehow slip by the attention of the media — amazing!  It’s like they were never there.  And yet they get the job done.

Our local March for Life, however, was not entirely ignored by the media.  Our free entertainment weekly, which doubles as our incisive political reporting weekly*, made mention of the event:  Our intrepid reporter tells us that the March happened, and then utterly topples the foundations of the Pro-Life movement, by pointing out that all those aborted babies would have grown up to be criminals anyway.

Not his idea, he was citing Levitt & Dubner in the very famous Freakonomics.  (The hardcover was published William Morrow, 2005.  You can buy other versions now, of course.)  The book doesn’t make any moral prescriptions, by the way — economists general don’t.  But it really does set forth the theory that the drop in the crime rate that occurred in the 1990’s was the direct result of Roe v. Wade.  The idea being that the really bad mothers know they are really bad mothers, so they abort their children rather than raising them up to a life of crime.  And 18 years later, you and I reap the benefits of that instinctive act of preemptive genocide.

If only all those marching ninjas had known!

But all mockery aside, our reporter got to the bizarre heart of the Pro-Life movement: We actually believe that even the children of ne’er-do-wells should not be summarily executed.  We are willing to take the risk that you, child of poverty, decadence, and a very broken home, may or may not live out the hope embodied in your cute little baby smile.

Radical freedom.  The idea that the right to life belongs even the children of those other kinds of people.   The idea that having lousy parents is not, in itself, a capital crime.

And so I’m thankful to our reporter for giving us such a clear vision of the divide.  We see how those who want to apply the abortion chapter of Freakonomics to public policy feel about the human race:  What’s a few million dead bodies, if it lowers the crime rate?

Which explains why you would need thousands upon thousands of ninjas, if you wanted to go head-to-head with a regime like that.

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*I am not kidding about the politics — in addition to vast coverage of bars, restaurants, and services with 1-900 phone numbers, it really is the only local paper that does investigative reporting.  And we wonder why the mainstream newspapers are failing.

Usury Part 3: Lending Gone Right

This is the post where I propose that there is an acceptable kind of lending at interest.  Which we can then use to evaluate other situations and see how they stack up.  Here goes:

Imagine for a moment that I give up my life of prayer, goofing off, and educating children (let us not contemplate which one I put most effort into — hint, the prayer part could use a lot of work), and decide to start a business.  Any kind of business, but one that produces a tangible product.  Knitting socks, growing tomatoes, something like that.

[If either of those sound immoral to you, just imagine me producing something that you think really truly ought to be produced.  We’re going for an unimpeachably worthwhile productive activity here, for the purposes of our study.  And we are going to refrain from comments about how my knitting and gardening skills are only slightly better than the prayer life.]

Now imagine that I have the talent for this business, all the necessary organizational skills, even the ability to file my taxes properly. (Which I actually can do!)  But that YOU are the one who has the cash I need to buy supplies.  And you’re perfectly willing to invest in my business.

So what do we do?  Surely the Church does not require you and I to abandon all prospects of a business venture, on account of the peanut butter and chocolate never being permitted to touch.  You have the cash, I have the rest, we can change the world one sock at a time, if only we can join forces.  Our current options are this:

Become full partners in a business. It’s like getting married, only harder to put asunder if things go awry.  You love me, but not that much.  Really all you want is to fund some yarn purchases in exchange for a cut of those huge margins I’m gonna make on my extraordinarily unique sock creations.

I sell you stock in my company. If it’s a publicly-traded company, it will be relatively easy for you to sell off your portion of the business if you so desire, but you may or may not get your desired share of the profit if you do that.  If it’s a privately held company, it’s eerily like that partnership option.  And from my perspective — do I really want you having a voice in how I run my sockworks?

–> Really what you and I both want is for you to contribute some cash to this year’s sock run, and at the end of the season you take your cut of the profits and move on.  Maybe we’ll join up again later, maybe we won’t.  But we want a nice, clean, short term arrangement.

Now in certain staunchly Muslim countries I am told that to get around the usury problem, a profit-sharing type of financial instrument is available.  But here in the U.S., we either have ownership equities (those stock or partnership options rejected above), or . . . DEBT.

Yes, debt.

Our friend, debt.

Bet you never thought I would type that ever.

But here’s what:  Debt is simple.

You want to contribute some cash to my sock works in exchange for a share of the profits.  Now we could, in theory, set up something to do exactly that.  I say you’ll get, say, 10% of the profits off of this year’s sock production in exchange for buying a year’s supply of yarn.  But where does that leave us?

–What if we disagree about how to calculate the profits? I feel sure sure sure my knitting needles will depreciate fully this year, and you think I can get a good twenty years out such sturdy bamboo.  (Which means lower costs, more profits, a bigger piece of pie for us to split.)

–What if I have more than one product line, and you only funded one of them? Now the accounting gets really rough.  How do I allocate my call center costs between the project you funded (all that beautiful chartreuse wool — thank you!)  and the project my other faithful reader funded? 

-And that’s not even taking into account horrible management decisions, strange market conditions, and everything else. Surely I would have made much more money, you argue, if I’d gone with the other shade of chartreuse.  And if only we had waited 14 months before settling up instead of 12, you would have gotten 10% of a much bigger pie, what with the sudden epidemic of Sheep Flu that hit right after I paid you off.

Summary: Profit sharing is complicated.

So we simplify our agreement.  I expect that if I use your $100 to buy wool, I can turn around and sell the socks for $150.  Dividing the proceeds fairly, after taking into account my other expenses, we agree that if I pay you back the $100 plus an additional $5 as your share of the expected profits, that will be a win-win.  And we agree that I’ll pay you back exactly one year from now, rather than having to worry about exactly when the project is over.

Will one of us end up the loser?  Maybe.  I might not sell as many socks as planned, and I still have to pay you the $5 interest.  I might make more profit than planned, and you still get only a measly $5.  But it is a clean arrangement, built around the real expected values of what wealth the sock project is going to generate.  If it is part of an overall habit of making prudent business decisions  over the long run, it should balance out.  Maybe this project you get the better end of the deal, next time chance favors me, but in the long run, when we aggregate all these little arrangements we work out within the business community, we both get our fair share.

And that, I think, is the basic model of why and how debt can be good.

Usury, I argue, is something else.  A situation where we pretend to have good wholesome debt, but in fact one of us is abusing the financial instrument to exploit the weaker party. We’ll look at that in Part IV.

 

 

 

whether to give to panhandlers

Julie at Happy Catholic answers the question.  Need to replenish my snack box.

Usury II – Kings, gold, wars, family jewels

2nd Installment is finally here, and I know there is at least one other person on the entire internet who is interested, because Jim Curley posted on topic last week.  (And yes, I would totally write an entire blog just to keep Jim Curley entertained.  What sensible person wouldn’t?  Plus it turns out that the SuperHusband sometimes reads here, and when he does, he laughs at all my jokes.  So that’s two reasons the rest of you have to put up with Usury.  Intro is here.)

Anyhow, post #2 is a sidenote about where we are not going in this series.  And it’s this:

In Dante’s era (and before) a fair bit of the moneylender’s business was loaning money to warlords.  This is a rough business model: The industry functions more smoothly — that is, more profitably — when the lender is the one who can shake down the delinquent borrower.  Staying afloat is rather more awkward when that relationship is reversed.

[Note to creditors of the US government: We do not intend to nuke you nor expel you.  We just expect you to continue to loan us money.  Forever.  Because no, we are not going to pay you back.  Don’t people know this by now?  99% of the time, the chronically late, the chronically disorganized, and the chronically indebted stay that way.  Hence my desk and our deficit.]

So back on the not-our-topic:  Moneylender finance wars.

And here is what you need to know about wars:  Wars do not generate wealth.

You can have a defensive war to protect your wealth, or you can an offensive war to acquire someone else’s wealth.  But war does not create wealth, it spends it and destroys it.  So anyone who is loaning money (at interest) to finance a war is loaning money for a non-wealth-generating activity.

Now this is very confusing because wars keep people Very Busy.   The employment rate — that is, the measure of how many people are being kept busy — goes up.  And this warms our hearts, because if you haven’t got anything to do, you also probably don’t have a way to feed yourself.

But all this extra work falls into one of three categories:

• Things you get paid to do right before someone kills you
• Things you produce that will be used up by the people getting killed
• Things you could have been making all along, if only the king had wanted them sooner.

I concede that last category is a kind of wealth generation.  But the king could have purchased it war or no war.  And given that the whole business of war is to kill & destroy until the enemy gives up, I maintain that war does not generate wealth.  (It may still be necessary – see “just warfare”.  But that doesn’t mean it makes us wealthier.  There are many things we must do that do not make us wealthier.)

But I go into the whole giant aside because Dante (and us as well) would have observed that the money lenders were, at least some of the time, making a profit off lending money for war.  And that is mighty distracting when we want to debate the morality of usury, but I don’t think it should be our topic.  Either you need to go to war or you don’t.   If you must, then I suppose you’ve got to pay for it somehow, and let’s not get all carried away about the moneylenders until we understand the morality of lending at interest in blander situations.   If it is an unnecessary (and therefore unjust) war, you never should have waged it to begin with, so money lenders are a moot point.

***

The other thing I want to say about the historic situation with money lending is all that drama over the family jewels.  You know, such and such (usually Jewish) moneylender held the crown jewels of xyz great king, and blah blah blah.   Hello?  This is not an O. Henry story.  I’m very sorry if her majesty had a particular fondness for her financial instruments.  If my 401K were as pretty as all that, maybe I’d have it shaped into something I could wear on my head, too.

But whereas I will gladly dive right into the topic of holding cloaks, cars, and the family farm for collateral, I draw the line at lumps of metal and rock, no matter how cool lookin’.  Precious metals and minerals are money.  They do have intrinsic value out in the garage, as drill bits and conductors and all that, so yeah, if we were talking about pawning your tools, I’d be willing to talk.  But the bulk of their value is as money, and it is as money, not as hardware, that bankers will accept them.

Now you can imagine that a bankrupt king would be perfectly happy to sell you sob story about why he had to shake down his banker to get back the precious heirlooms.  Because it was all a plot against his poor innocent majesty.  So when we start to talk about the morality of banking, especially within the historical context, keep in mind to disregard all that propaganda.   It’s not about family memories.  If we’re going to ream the bankers, we’ll have to find a more substantial charge than “his majesty wants his money back”.

***

And that’s where we’ll start to head in part III — back into the question of whether lending at interest is ever right, or ever wrong.

This series, btw, is coming out awfully slowly because I have been sleeping late.  (You thought it was because I was deep in thought.  No, I was not.)  If I wake up early, it gives me this lovely uninterrupted writing time when I can actually think.  But after a certain hour, that window is gone gone gone.  The only reason I got this post out is because I sent SuperHusband off to an event with the big kids, and put two littles in bed.  So if I’m going to get more substantial posts written, either I’ve got to stop sleeping so much, or else people need to start sending us more invitations.  I’m good with either.

Usury – Intro

Note: I expect maybe a little series is brewing here.  I thought this was going to be The Post, and instead it’s just an introduction.  Oh dear.  Well, it should be fun, anyway.  Talking about usury is always fun.  We’ll sidetrack into the family jewels and the waging of wars next post, as all good usury discussion must.  Then it’ll be back on topic in post #3.

***

So back to usury. Dante complains, as Mark Shea explains:

Well, for Dante, since fruitfullness can only proceed from Nature or Art (or, as we would say today, “raw natural resources and manufacture of goods and services”), it follows that mere chicanery by which dead gold or silver are made to “breed” by manipulation of interest rates by those who lend at interest is another form of perversion.

The argument is that money-lenders aren’t producing anything.  But somehow they’re getting rich anyway.  Suspicious.  Very suspicious.

Now we can take the classical view of the situation, and argue that bankers are “renting out” their money.  Same as you might rent an apartment, or a car, or a tuxedo.  The banker owns something you need to use for a while.  You get the use of the item, and in exchange you pay a fee, in addition to returning the item when you are done with it.    All very above-board, frankly.

As with housing, the renting of money only comes under fire when there’s a perceived abuse.   We want there to be a certain amount of real estate and money available for rent.  (And tuxedos.  But no one gets too excited about tuxedo-sharks.) What we do not want is for one lucky super rich guy to lord it over us, and the rest of us have to live in his tenements or his mill village and pay ridiculous fees just to cash our paycheck, with us constantly in crisis and owing money we can never pay back.

–> The ‘rental’ model of banking works pretty well until you attempt a moral analysis.  Suddenly you’re stuck: The difference between a modest mortgage and a horrendous title loan is only one of degree, not of kind.  Surely there should be no objection when both parties engage willingly?

If you are happy with loan sharking, it’s not a problem.  But suppose you have this nagging feeling that all is not right?  And suppose you are comfortable with a certain amount borrowing and lending — perhaps there’s even a favorite financial instrument you have rather come to know and love?  Then you’re super-stuck, because you can’t just outlaw all lending at interest, because there goes your baby out with all the rest of the wash.  Trouble trouble.

What I’d propose is that we take apart the types of loans and financial investments that are out there, and see what makes them work.  Is it all just an indistinguishable mass of “money for rent”?  Or is there something qualitatively different going on?  And if different (as I will argue), what kinds of transactions are good, and which kind are that financial chicanery that Dante would have been right to detest?

***

Next up: Disclaimer about kings and their wars.  Then back to answering the question.