Monday, July 14, 2014

The President Discovers Opportunity

In the President's Weekly Address, he discovers the need to create opportunity.







As is his custom in his weekly addresses, President Barack Obama opened with a human interest story.

This time it concerned Elizabeth Cooper, a college sophomore concerned about the cost of college and how difficult it is for middle class families to afford it.

On the one hand, once a woman gives birth, the parents have nearly twenty years to save for college. If one starts twenty years before the first tuition and books bill arrives, it is no so bad. If one waits until high school graduation day, it is definitely a challenge.

On the other hand, college is more expensive. When I attended the University of Texas way back in the late 1970s, the University charged $15  a semester hour. That translates into  about $45 a course or $225 a semester for a full load of five courses. Of course, the University hit me (or, more specifically, my parents) with all kinds of fees. Housing proved the biggest expense. Today, tuition at the University of Texas approaches $10,000 a year. I have since relocated to Atlanta, Georgia. Tuition at our flagship state university over in Athens is over $10,000.

Of course, what no one will hear from President Obama is red hot rhetoric about "greedy" administrators or professors. Thy constitute a small but important voting block.

Frankly, they are not responsible for the rising costs of college. Part of it results from rising demand. Because everyone knows the lifelong impact to one's financial well-being that a college degree will bring,  everyone  feels compelled to attend college. Many politicians at both the state and local level attempt to enact policies to allow more people to attend college. This increased demand drives up the cost.

It also means fewer subsidies to go around for each student. States have subsidized the costs in public universities for decades. With more students attending college and fewer tax dollars available to fund higher education, students find themselves paying a greater percentage of the actual costs.

Here in Georgia the legislature created a state lottery to fund the Hope Scholarship Program. This accounts for the fact that in while in Texas just over 50% if students receive some kind of aid, here in Georgia, over 90% of students receive aid. One side effect of the program is--you guessed it--increased enrollment in Georgia colleges. Some of this results from grade inflation. Although SAT scores remain stable, students "earning" the kind of grades that qualify them for the Hope Scholarship have increased. Teachers appear to be inflating grades to permit more students to attend college. This, of course, drives up costs.

Back to Barack and Elizabeth:

"And she shared something I know many of you feel when you wonder what’s going on in Washington. She said she feels 'not significant enough to be addressed, not poor enough for people to worry [about], and not rich enough to be cared about.' ”

Yes, this is one might feel when the one middle class government benefit dries up. The government appears increasingly devoted to the well-being of the rich and the poor--not the middle class.

The President acknowledges the plight of the middle class in the next passage:


"And after the worst economic crisis in generations, our businesses have now created nearly 10 million new jobs over the past 52 months. The unemployment rate has fallen to its lowest point since 2008. By almost every measure, our economy is better off than it was five years ago.

But while we’ve created more jobs at this point of the year than any year since 1999, too many families barely earn what they did in 1999. It’s harder to pay for college, save, or retire, because people’s wages and incomes have not gone up. Nearly all the gains of the recovery are going to the very top – and aren’t making a difference in your lives.


And I believe America does better when the middle class does better. And I’ve laid out an opportunity agenda to create jobs, train workers, educate our kids, and make sure hard work actually pays off."

This is a sad, but revealing indictment of his own administration--that "nearly all the gains of the recovery are going to the very top." 

If this is true and he finds it objectionable, he only has himself to blame.  Although he faults Republicans for obstructing his economic legislation, Obama enjoyed a Democratic majority in Congress for his first two years in office.

Granted, he inherited both the economic crisis and a policy of bailing out wealthy financial institutions. So what did he accomplish? He continued with bailout of financial institutions, especially those two notorious GSEs--Fanny Mae and Freddie Mac. And he secured passage of the PPACA--a plan that already moved businesses to reduce working hours for their employees and  will need incredible amounts of taxed derived subsidies to keep it on life support--taxes invested in the real economy.

How's that for helping the middle class.


5 comments:

CW said...

Excellent post, V.L.

To be honest I didn’t watch the video and just relied on your account because I just can’t stand to watch this man lecture me and spew his lies. I think I’d rather listen to a door-to-door vacuum salesman ramble on for an hour. But I trust your take on things and the notion of Obama, 5 and a half years into his presidency, still behaving as if he just came on the scene and noticed how badly things are messed up for the middle class is classic for him.

I have two boys in college and though they aren’t expensive colleges it’s pretty painful. I think you’ve summarized the problem well, although I wouldn’t discount the role that administrative costs and teachers’ salaries & benefits have played in skyrocketing costs. The Left has learned how to use all of our educational institutions to comfortably feather their nests, and they manage to get a bit more comfortable every year. And maybe it’s just the ivy league schools but judging from the headlines it looks like they funnel plenty of money to people like the Clintons and other leftists for their invaluable speaking talents. We pay hundreds of dollars for books that are conveniently out of date when the kids try and sell them back, and yet we’re told that the liberal professors who write the books are concerned about the cost of higher education. They mull these problems over while they sail their boats and take mini-vacations to their summer getaway homes. (My sister-in-law’s father is a department head at a major university in Colorado. For as long as I’ve known them he’s had boats, a Porsche, a second home in a ski resort and plenty of money to travel. So I think the cliché of the struggling college professor is a myth of the past).

RightDetour said...

I do not watch him either; I read the transcript.

I remember the book buy-back scam as well. I sometimes saved money by finding books in a library or using an old edition anyway. Not much really changes. I think it works out more of a windfall for the publishers than the professors--but I do not really know.

Here is an "interactive" link on college faculty salaries. I linked to setting for Texas since you live in Foat Wuth. You can used the drop down menu to refine whatever data you seek.

http://chronicle.com/article/Interactive-Table-Average/131433/

RightDetour said...

Well, my link does not quite take you where I said. But you'll figure it out once you get there.

CW said...

Well the range is all over the place but you have to remember that state employees don't pay into social security, they may work just 9 months of the year,and they typically have great benefits.

Elizabeth Warren earned $350K at Harvard and I understand it's ivy league but certainly it undermines the argument that they're fighting to help the middle class.

RightDetour said...

I did not expect the high salaries as those most exclusive of universities. I found most surprising, however, the large difference between full professors and asso. professors/instructors.

Another aspect of the salaries concerns exactly what the universities are getting for their money. Many full professors have a light teaching load so they can devote time to research. And they must do this because of what they call the dilemma of "publish or perish." And much of the "grunt" work is done by grad. students. In most freshman survey courses, grad. students to the grading. They assist in research as well. When I went to grad school, I received a small grant of money to work a research assistant--sometimes doing something as mundane as typing up research notes and preparing a bibliography for a professor's book. And sometimes I actually conducted some research!