Education

Monkeywrenching socialism – Introduction

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I always thought that if we every got within shouting distance of a tipping point where we would become a socialist country somebody would start up an extended discussion on monkeywrenching socialism. Nobody else seems to have done so (feel free to educate me on other efforts in comments) so I thought I’d put in my two bits with a blog post series.

Let me be clear as to what I am talking about. This is not about felonious conduct. It’s not a mirror image of left-wing monkeywrenching. It’s about exploiting a simple fact of life, that socialism doesn’t work and the socialist ideology makes headway only when the long-term effects are hidden or obfuscated. Monkeywrenching socialism is about improving society across the board from politics to economics to culture by introducing moments of clarity and insisting that there is no moral or ethical high ground for a wrong system that has caused as much damage in the world.

Peacefully adopted socialism depends on people feeling a misplaced sense of loyalty to the corpse of the system that socialism is usurping. People know that something is wrong but they ‘play fair’ long after the socialists have started their long march through the institutions and played dirty pool to tear the guts out of the old order before anybody notices.

More soon.

Quote of the Day

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… as it has been my lot in the peculiar position which I have occupied for more than half a century as counsel and adviser for a great corporation and its creators and the many successful men of business who have surrounded them, I have learned to know how men who have been denied in their youth the opportunities for education feel when they are in possession of fortunes, and the world seems at their feet. Then they painfully recognize their limitations, then they know their weakness, then they understand that there are things which money cannot buy, and that there are gratifications and triumphs which no fortune can secure. The one lament of all those men has been: “Oh, if I had been educated I would sacrifice all that I have to obtain the opportunities of the college, to be able to sustain not only conversation and discussion with the educated men with whom I come in contact, but competent also to enjoy what I see is a delight to them beyond anything which I know.”

My Memories of Eighty Years by Chauncey M. Depew (1921)

Manufacturing, the Ivy League, Jarvis Cutting Tools, and Toyota

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Bill Waddell argues that American government and business suffer from excessive dominance by people from a small number of “elite” colleges and prep schools.

In the comments, Costikyan Jarvis–who runs a family-owned manufacturing business–defends the value of the Harvard Executive Education program which he attended:

First, my professors were very diverse. They came from North America and Asia and had a variety of experiences. They had worked in private industry and some still served on boards of various companies. I enjoyed some more than others, but they were all excellent.

More important was the student body. I, and most of my other classmates, learned more from each other than our professors. Of the 143 people in the course, 45 are from the United States (about 30%). So yes, we were all located in Boston, but we came from all over the world.

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I can not speak for the other programs, but if you ask my fellow classmates why they chose Harvard it is clear we feel that Harvard is the best. Yes it is the best in our minds (we decided to spend the money), but there is no doubt that the institutions that you mentioned attract some of the best professors and students from all over the world.

Today, Bill responds to Costikyan’s response:

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Indoctrination at U-Delaware

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Here’s a video, made by the American Council of Trustees and Alumni, about the indoctrination programs that have been implemented at the University of Delaware as part of their Residence Life program:

Part One

Part Two

Watching this, I was reminded if a German folk song that dates from the early Middle Ages: Die Gedanken sind frei. This translates as “the thoughts are free”…in one of the many versions of the song, it is “only the thoughts are free.”

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Negative Net Worth

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The Chicago Tribune business section has a series where readers write in with their financial issues and the columnists seek professional help and recommendations and publish the results. This column is titled “Law Degree on Her Side” and shows the plight of a woman under 30 who is a lawyer but is struggling under a mound of student debt and is considering bankruptcy.

BALANCE SHEET VS. INCOME STATEMENT

A big element in our economy’s struggle is the fact that the analysts and “experts” were focused on the income statement and not the balance sheet. An income statement view focuses on profits, or the difference between earnings (in her case, salaries) and expenses (rent, living expenses, etc…) and what remains each year. Companies often report earnings EBITA which stands for “Earnings Before Interest, Taxes and (depreciation) and Amortization”. In this model, you become a lawyer because you can make a lot of money (top line revenue) and use it to support the rest of your living expenses.

However, this “income statement” model ignores the debt needed to finance education and expenses related to education. This debt keeps piling up and is a negative item on your balance sheet, which is the long term debt that you owe others, along with the annual interest that you need to pay to service this debt. In an analogy to the stock market, it is the debt payments, along with the fact that companies can’t come up with the cash to pay off principal (or roll-over debt) that is causing the liquidation of companies like Circuit City, Linens & Things, Mervyns, and soon to be many others.

In this lawyer’s case, her balance sheet is “negative” meaning that she is insolvent or has a negative net worth. She has a tiny amount of assets (a bit of retirement savings, some cash on hand, and maybe equity in a car or something) which is all she can show to offset a mountain of debt.

I don’t have exact statistics but I would venture that most Americans have a negative net worth nowadays. By this I mean that the value of their debts exceeds the value of their assets. I also run a site called “trust funds for kids” and I often tell my nephews and nieces that even the relatively small amounts that we put aside ($10,000 or so), as long as they don’t accrue debt, will make them better off than most Americans who have worked their entire lives, since they will have a positive net worth. Obviously some of this is tongue-in-cheek since you need a steady stream of income to pay minimal living expenses but there is much fundamental truth in that analysis in that if you pile up debt you will never accrue enough assets to offset this debt. And if you have a negative net worth, you can never stop working (retire) unless you have a guaranteed string of income high enough to offset your living expenses, interest costs and principal repayments.

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