economicmultipliers_173

Economic Multipliers (173)

Do you know what these are?
They help CREATE wealth in systems.
Poverty is not an economic multiplier.  (No. 3)
  
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I reiterate:

‘Elections are a great time for young people to ‘meet’ their leaders.

For that reason, I’m hoping young people will think about some things they observe in their world related to how their ‘leaders’ lead.’
 
This is a great question to ask around election times:  ‘Should a college education in the United States be free?’
 
I don’t have the answer to this.
 
I am going to tell you that ‘our leaders’ are (from my perspective) asking the wrong question.  The ‘right’ question is:  ‘Should a high school education in the United States be free?’
 
It seems to me that starting in 3rd or 4th grade, every student in the United States should be given a card at the beginning of the school year that states:  ‘You have won the lottery (you lucky kid).  You get a chance to go to school this year.  If you don’t feel like you won the lottery, you need to talk to …’ (It’s really important to connect kids to people who can make their school experiences worthy and their start of life journeys positive and memorable.  Likewise, even if students aren’t ‘book’ inclined, it’s critical to get them ‘learning’ inclined.)
 
Education should not be ‘free’ to children who do not believe they ‘won the lottery.’  It is possible that that there is nothing more ‘unlucky’ for a democratic, capitalistic society than lots of people who aspire to intellectual poverty.  (My opinion. – What is yours?)
 
Likewise, if you ‘win the lottery,’ it’s pretty important to know how to invest the ‘winnings.’
 
Since YOU have an opinion related to FREE education AND that opinion may be tied to a number of things, ponder:
  • what you expect of yourself and/or your own children,
  • how your parents and/or grandparents treated you,
  • how you paid for your own education if you acquired any beyond high school,
  • whether you and/or your kids are or ever were eligible for scholarships,
  • whether school (or anything else) was easy or harder than most for you,
  • how much money is available for anything that you and/or your family do,
  • how much your family relies upon ‘free’ things,
  • whether anyone in your family ever scrimped and saved so someone could have an opportunity while other families were freely spending money and doing things that seemed a lot more fun,
  • your age (different generations ‘capture’ different opportunities and experiences and as a result, have different views of the world),
  • whether you want to go to school today or in the future, where you’d want to go and how much it would cost,
  • whether you think differently about different kinds of education (i.e. work-related, community-building, skill-building, relationship-building, intellectually stimulating, just for fun, etc. – Effectively, who derives the benefit?),
  • how much you pay in taxes and/or would expect to pay in taxes if some system was altered and even
  • whether you have children and/or like young people or people who like to pursue education.
 
The concept of FREE is unusual.  Everything always has some sort of cost.
 
I’ve ‘listened’ a bit over the years:
  • Parents who require that their children live at home, do chores (work) a number of hours a week and attend less expensive schools unless they can get full scholarships probably would say that FREE would mean only the maximum tuition that they were able to pay for their child.
  • Many people (myself included) think that prior to taking on student loans, borrowers should be required to pass a series of financial literacy tests.  If you think this sounds ‘unfair’ or ‘crazy,’ ask yourself whether you’d want a person in college to think they were particularly intelligent if they were not financially literate.  Keep in mind that it’s predominantly ‘college graduates’ who write state and federal tax booklets and who pass federal, state and local laws tied to taxation, budgets, spending and just about everything else.
  • Parents who managed to keep their children from drinking and/or recreational drugs wouldn’t tend to believe that they should help reimburse or forgive (be taxed for) student loans that were used for living expenses which included alcohol, recreational drugs and/or ‘party trips.’
  • Business-oriented people would usually say that it is a waste of societal resources for a person to take out large loans to attend an ‘elite’ school for a degree where the long-term salary is not ‘elite.’  If a student attends on a scholarship – that is different – since they don’t end up with excessive debt prior to graduating.
  • Some people believe that ‘critical skill’ education in areas which require a lot of excess knowledge and continual learning like medicine should be highly subsidized no matter what so that it’s easy for those individuals to focus on their education.  If it’s really important to ‘test’ their coping or response skills, that may be better done in an emergency room versus seeing if they can figure out how to pay for groceries while they go to school.  Of course for wealthier or more resource-endowed kids, there are a LOT of things that they never have to COPE with for any degree.  Just as students should not be in college if they can’t or won’t do the work, making education difficult to get (financially) doesn’t make a nation ‘smarter’ or more resilient.  Many students may learn extra coping skills in the midst of financial distress – but they’re probably not the hard skills that help them spot patch a neighbor’s roof after high winds or know what to do if flooding is forecast – skills that help retain community value which prepare them for property ownership.
  • Some people (myself included) think that some academic institutions have become so adept at chasing ‘money’ versus educating students in ways which are fiscally responsible that their very actions are creating social problems.  As a result, if a college education (predominantly tuition and books) was to be FREE, would it be wise to first evaluate the loan amounts and payback rates of all the students who attended any institution for the past 50 years to determine whether, as an educational institution, they could be trusted with public funds?
  • Parents who’ve always struggled usually want education to ground their children so their children don’t have to struggle.  Excessive educational debt has been eroding the ability to help ground anyone who pursues higher education.
When Benjamin Franklin (a rags to riches kind of guy who highly valued education and learning which emphasized the ability to think AND do) died, the very first President of the United States had been in office for less than one year.  Although most of Ben’s estate was left to his family, he also left money for education for future generations … to be spent 200 years after his death (1990).
 
You have to have a lot of faith in the people around you to believe that they will not squander your legacy or the work you put in helping found a nation designed to let people achieve and be free.
 
Check to see if this is true:  There’s a possibility that some public officials decided to ‘dip into’ some of the money Ben left around the 1890’s – they may have liked traveling.  A wealthy donor may have ‘reimbursed’ the fund with money he would have spent on other publicly beneficial projects he had going.
 
Boston and Philadelphia were the beneficiaries and in 1990, the two cities had money to spend – on education.
 
Benjamin Franklin thought that his educational fund should be a ‘perpetual fund.’  He wanted ‘his money’ to earn interest so the interest could fund someone’s education in a way where they could pay the money back over time (most likely without interest or time constraints).  The fund itself would continually grow and since outlays would usually be reimbursed, more and more people would have opportunities.
 
Today it’s hard to imagine someone stipulating that some money should be set aside – to be spent 200 years from now.
 
I think Benjamin Franklin was hoping that ‘reincarnation’ would give him a chance to find out not only whether the United States of America survived but also whether men (and women) of integrity survived to honor his request.  (Not a betting man to my knowledge, he hedged his bets in regard to religion.)
 
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P.S.  Benjamin Franklin didn’t think people should be reimbursed for ‘public service’ but was paid for many things.  In a different time and world (and most likely because he was a witty and enjoyable guest and well-respected author, businessman, scientist, inventor and ‘doer’), he received a picture frame from the nation of France embedded with hundreds of diamonds.  As a point of humor, he stipulated in his will that those diamonds never be used for frivolous things like jewelry.
 
Thomas Jefferson, equally talented in different ways, one to two generations behind him and a bit of a spendthrift and partier who was born into ‘land wealth’ (appreciate that this is different than financial wealth as land assets can be difficult to glean a return from – particularly if, for any reason, the land values depreciate), must have driven him crazy.
 
P.S. (2)  I don’t know why they don’t:
 
When organizations give scholarships, they should include a note that says:
 
‘Some day, years in the future, you may believe that your opportunities and financial success were partly because someone from the past worked to help give you an opportunity.
 
If you ever get a chance to reimburse the scholarship fund, do so.  That choice - your choice - will help give others the same opportunities.’
 
P.S.(3)  As I shopped for a computer one day (and was grateful for the opportunity to upgrade), I overheard a young man asking the store clerk whether it was possible to buy a computer ‘on time (credit).’  (Know that some companies do let you do this.  Also know that in today’s world (2016), a company that does so because they consider you to be a good risk will charge 5% annual interest (or less)).

Imagine if some ‘Ben Franklin’ today set up a revolving fund for small scale technology purchases for businesses and education with the ONLY stipulation being that the core capital and any additions to core capital couldn’t be eroded and if the recipients ever did well financially, they would reimburse the fund (without time or interest constraints).  If they did really well financially, they could be encouraged to contribute to the ‘core capital’ – creating even more opportunities for others.

P.S.(4)  Lest you believe I think it’s good to give things to people for ‘free,’ appreciate that taking a one-time chance on someone who could, as a result of that chance, get to a point where they are able to do well in their educational or business pursuits and ultimately ground themselves and pay taxes and contribute back in all sorts of ways is actually a bit ‘selfish’ on my part.

‘Men of history’ have many facets to their character.  I was struck one time by ‘a story’ of a man who invested in ‘hard working men with good ideas who simply lacked capital’ (inventors by all accounts who had skills like those of Henry Ford).

When he got around to ‘settling the books,’ he made a point of making sure that ‘the hard working man with good ideas’ retained at least 51 percent of his company – no matter how much he had invested or how much it was worth.

Asked why he would ‘give away’ so much ‘equity,’ he noted that the business only existed because of the hard working man with good ideas who turned it into something of real value.  He didn’t want to take a chance that that man wouldn’t want to be working with him as he profited from the labor tied to that investment.

When you consider that not all of the businesses he invested in would have succeeded (but a select few would have ‘soared’ due to good management, good ideas and good timing) and when you consider the fact that he had an opportunity to evaluate extraordinarily hard-working and talented people who may have been better suited to working in other’s businesses than running their own, it’s easy to understand how he became a billionaire (by the standards of his time).

When he passed, he bequeathed a substantial portion of his wealth and his collections to a museum he built.

It can be hard to understand long-term versus short-term thinking.  Many people in the United States were literally starving as this man knew his days were numbered and he chose to put marble on the museum so it would ‘survive the ages.’

The businesses he invested in paid wages:  Employees could afford to eat.  The marble quarry retained jobs at a time when many communities lacked money for large scale public projects.  (Years ago, even many hospitals had marble floors.)

P.S.(5)  I’ve become convinced that the easiest way to make any nation wealthy or wealthier is to create lots of people who have the resources to:
  • pay taxes,
  • invest in people and
  • invest in infrastructure

IN sustainable ways.

P.S.(6)  If you don’t think young people are making a difference (and finding ways to invest in infrastructure and education in their own ways), check out the teachers who are developing resources for their classrooms through ‘GoFundMe’ pages and other similar pages.  While you’re at it, check out all the corporations, groups and ‘older shoppers’ who have been doing similar things in your community for years (decades – think grandparents and great grandparents).  I think you’d be amazed.

And along those lines, someone once told me that it is possible (if you are part of the program and relatively frugal, don’t have any heavy eaters in the household and have access to other resources like food banks and community and school lunch programs) to end up with extra SNAP (food assistance) benefits.  Wages across states can vary greatly and it seems to me that if individuals who ended up with extra benefits had the ability to ‘spend them,’ they would make good choices.  (Appreciate that these are individuals who usually don’t get to make a lot of choices but understand needs much better than many.  Likewise, and I’m guessing:  If individuals could donate to some program or organization that they at one time used or know someone uses now, I believe they would treat the benefits like their own spendable (and budgetable) cash – and that kind of decision-making increases wealth in communities).

Do you think it would be OK for a state or county to advertise community ‘food support’ needs? – and designate organizations that excess benefits could be donated to? – such as:
  • meals on wheels
  • homeless shelters
  • food banks (for locally sourced food only – in an effort to ensure local food production)
  • summer breakfast and lunch in the park programs for kids
  • young (and/or older) people who are trying to work while taking at least 3 educational credits (through ‘meal credits’ at their schools)

P.S.(7)  In ‘Rich Habits, Rich Lives,’* I recently read that George Washington rarely spoke as the Constitution of the United States was being drafted.

Did we just get ‘lucky?’
  • By choice, he limited his term and turned down the offer to be ‘king.’
  • Upon he and his wife’s death, he freed his slaves and set up age-based pensions for those who would have difficulty finding other work based on their age.
  • He effectively dealt with an armed tax rebellion tied to alcohol during his administration.
  • He had some innate ability to either attract or develop or immerse himself in men of talent, courage and integrity.
  • He had parents who somehow managed to pass on every skill that would be important as the United States got its first bearings.
  • He literally had a whole ‘new nation’ at his disposal and somehow intuitively knew what to do with that opportunity.
So, did we just get ‘lucky’? – Or, did men like George Washington and Benjamin Franklin (long passed) help create our ‘luck?’

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Rich Habits, Rich Lives by Randall Bell is a book worth reading solely for the ‘Me, We, Do, Be’ concept.  If you do read it, also read into the statistics that are presented the things that don’t show up in the statistics.  For instance, in large cities, many people do not drive cars so statistics related to people who do represent ‘segments’ of the population.  I used the term ‘deceptive’ statistics as I was sharing my enjoyment of the book with someone (most statistics are) yet also believe the author presented statistics based on real data.  Be aware that the context of any statistics you read is relevant.  And, if you have an interest in organizational development, the citations at the end are worthy reading.