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On Being Sandwiched

          As we were, so you are.

          As we are, so you will be.

                – Sign in the crypt of the Capuchin Order, Rome, Italy

You see some odd things as you travel and one of the oddest is the crypt of the Capuchin Friars in Rome.  It is a multi-room collection of the bones – some still full skeletons – of more than 3700 Capuchin Friars and others, assembled in various displays that in some ways are morbidly artistic.  The captioned quote is on a sign in one of the rooms and serves as a graphic reminder to the tourist of the fleeting nature of life.  I saw the sign during a family vacation several years ago and noticing it served as the cherry on a thoroughly bizarre day.  But the full import was lost on me until I became sandwiched between the youngsters and an elderly parent.

For most people, life is a Bell Curve and the plateau for the total person – mental, physical, emotional – is typically reached during middle age.  When you have kids, you’re at or near the top of your game and can focus on raising them, bringing them along and preparing them for their own adulthood.  It is hard work, as the Wall Street Journal noted in a groundbreaking article some years ago – seriously, when I first read the article years ago, I actually looked at the title and exclaimed “well, duh” – and when you have more than one young child, the work explodes on a seemingly exponential level.  But that work is also played out against a backdrop of anticipation, hope, love and at times, pure joy.  But there will come a time when the Bell Curve starts to slope downwards and while you are still approaching, at, or near the plateau, your own parents will start to descend that slope.  The parent’s decline can be gradual and it certainly doesn’t occur across all the phases – mental, emotional, physical – of the person.  But there can and probably will come a time when there’s a break in the elder parent’s descent and it goes beyond the capacity of one or both parents to manage it in the moment.  Falls that once would have left a bruise now leave a break and if the parent is sufficiently elderly, the break can create a cascade effect flowing further to the downside.  Middle-aged moments of forgetting what you needed from upstairs become senior moments of forgetting to turn off a gas range or even where you live when you take a walk.  These are the situations that bring the phone calls soliciting help from the elders and lead to an entirely new dimension of adulthood:  parenting your own parent.

The slang term for the situation is being sandwiched because of the pressure that’s felt from being responsible for both sides.  While it makes sense on one level, it’s also deceptive.  What’s really happening is that you’re simultaneously being stretched as the demands of each surrounding generation pull you in one direction and then in another.  If you’ve waited to have children until you’re older, then the stretch is even more pronounced as you might find yourself visiting both pediatrician and geriatrician in the same week.  Trying to juggle making an appointment for the kid with the work schedule?  Now toss in having to make an appointment for your infirm father and the tension from the stretch becomes palpable.  As the American family has gone nuclear and mobile, creating physical distance between the adult generations, the response has been a budding growth industry for assisting the elderly when the adult children are absent.  The elderly with sufficient assets can enter full-spectrum retirement communities able to meet their needs as they age; the parents can purchase a cottage and if and when the need arises, they can then shift to an apartment and later, be assured of a bed in assisted-living or skilled care.  Want to stay at home?  Purchase a chairlift for the stairs or modify the bathtub to account for increasing issues with balance.  Hire a person to come visit for periods of time to combat the cumulative effects of isolation upon the mental faculties. 

There’s a downside to this however and my wife noted it, in of all places, a commercial for Priceline.com.  The gist of the commercial was that another market segment for discount travel was for those who needed to get to elderly relatives quickly and inexpensively, because emergencies don’t allow the luxury of planning six months ahead for the best rates.  In the commercial, an elderly woman was hiring someone to do repair work and the contractor was then coaxing her out of her social security number.  That came on the heels of a recent phone conversation between my wife and her own mother, who’d related how an upset elderly neighbor had visited, frustrated that she had allowed herself to divulge her bank account information and number to an unknown person on the phone.  This isn’t to necessarily imply that all businesses oriented towards the elder market are shady, because they aren’t.  But it is a real and added concern for the adult children because they don’t want to see their parents manipulated and gulled.

There is a common factor amongst the previous two paragraphs and it’s one of which I am highly mindful as I look ahead:  assets.  We’ve predicated our family structure and society upon a model that requires assets for optimal performance.  Americans are living longer and encountering aging issues that didn’t exist before simply because people died before they could reach the point at which the issues became relevant in the aggregate.  But the American family isn’t in the same situation as it was during our grandparent’s generation.  The costs of healthcare and higher education are disproportionately higher relative to family income than two decades ago, yet the family and individual now must bear a greater burden than before…and on a family income that is, in the aggregate, declining.  The private assets simply aren’t there to support such a model for more than another generation and it’s already leading to generational warfare between the likes of AARP and the Millenials as squabbling begins for the allocation of public assets.  While raising children can bring the emotions of anticipation, hope and joy, what I honestly feel as I look forward isn’t tension, but foreboding.  On a personal level, is this something I can expect?  Debility and dementia?  Frustration and fear because I might be increasingly incapable of navigating a technological system that’s opaque to an elder American for its complexity?  Hell, I have difficulty figuring out the new smartphone already…what’s going to happen when I’m three-quarters deaf and expected to walk through an automated phone registration system for some program or another?  As my late grandmother used to say, being old ain’t for sissies.

That leads to the last aspect of being stretched.  The model for aging in America will have to change and as we grope our way forward to whatever that new model is going to be, it’s incumbent upon me to figure out how to model an appropriate behavior upon which my own children can draw as they move into adulthood.  My own parents dealt with their parents from a nuclear family’s distance of 225 miles, although one parent had a sibling nearby to her mother.  Until the bitter end, it was managed via phone calls and the occasional visit to handle business and it’s not terribly far removed from the way that many of their peers managed as well.  But the stresses of American society are such that it’s not so operative anymore and it will be better for all involved if the kids are more closely attuned to their parents’ situation, even if they aren’t necessarily living down the street.  How often can I make medical appointments?  How do I honor a parent’s desire for independence and yet assure safety for the parent and others?  What arrangements must I make if I’m responsible yet want to take a week vacation with the family?  How do I manage my own frustrations as ancient issues resurface after decades of living on my own as an adult?  What must I do to prepare so that I can be on good relations and make their own way easier as they eventually move into this role?

I’m a parameters guy.  I don’t believe that there’s any one perfect way of addressing any situation.  You determine the parameters within which you have to work and then figure out a mechanism that’s best for the given set of parameters and even then, it’s not going to be perfect.  But I’m mindful that the parameters within which our country has operated are changing and doing so rapidly and that simply is creating additional pressure because we’re now in the position of not just being sandwiched between generations, but being sandwiched between systems.

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Technology, Fairness and Kids

It’s not fair!  It’s just not fair!

Almost all of us with kids have heard this phrase from their mouths at one time or another, especially if the child has a sibling.  It’s been a chronic complaint for generations of parents as the egocentric kids worry that Sib is getting more than they are, whether it’s a smartphone, an Easy-Bake oven, a Hula hoop or a Dick Tracy detective kit.  And the response of most parents is a sigh or groan and an explanation that the Sib is really not being treated preferentially.  But does this age-old situation taken on a new face?  Has the technology curve changed how we handle the concept of fairness and equity with the kids and how do we manage it?

From talking with my peers over the years, the common recollection was that most parents tried to maintain an almost mechanistic even-handedness in dealing with the kids.  Like my own parents, if one child got a real desk at 10 years of age, then the next child received the same item at the same age.  It was a realistic defense in dealing with the kvetching that comes from kids sensitive to anything that threatens their own perceived place in the world.  And if anything can drive a parent batshit crazy, it’s the constant grousing from one or more of the kids who chronically attempt to prove their point, as pointless as it may be.  My own history was one of the mechanistic even-handed sort.  My older sister got some milestone item at a specific age and when I reached that same age a few years later, I received a like milestone item.  Desk?  check.  Decent bicycle?  check.  With many of my peers, it was a similar situation because typically, a kid didn’t need a specific item until there was actually a perceptible need for it. 

While my wife and I worked with this process through the early years of our children’s lives, it has taken a decidedly different turn in the past several months because of technology, specifically laptops and smartphones.  Until a few years ago, the family line was that there would be one family computer for the kids to share and that device was located in a common area of the house.  None of the kids had laptops that could be removed to bedrooms and there were no smartphones; the word on mobile phones was that when circumstance dictated it, then a child got a cellphone.  When Eldest was fifteen years of age and traveling to a distant city for a week-long event, we got her a cellphone.  As her high school graduation gift, we footed a nice, high-end laptop that would last through college.  Several years after Eldest blazed the way, Middle got a cellphone just before he was eligible to drive.  His laptop however, was earlier since the school decreed that all students would receive free laptops for use and lo and behold, a laptop appeared years before we had planned to foot for one and household guidelines had to be revised accordingly.  When the school district redrew boundary lines for the various schools to rebalance the size of their respective student bodies, we found that Youngest would be attending middle school at the school that was the further away so he got a simple cellphone for use in case or emergency; this was at an age several years younger than his siblings.

But the push has been on for months about upgrading to a better phone and by better, I mean a smartphone.  The repeated requests have been at Youngest’s behest because his simple phone is incapable of handling the communications now used by his peers, all of whom possess one manner of smartphone or another.  As one of his buddies commented, Dude, you should get an Apple…we’re an Apple family!  We’ve found that some of his friends will text with him simply because they’re friends but he’s the only one with whom they text and all else is handled via Instagram; this means that in oversight, there have been multiple events and get-togethers from which he’s been excluded and despite subsequent apologies from his buddies, it still hurts.  This realization has led to more discussion in the household.  Should we let the fact that he’s the only one without the latest and greatest drive a family decision?  What are the new family guidelines on smartphone use?  How fair is it to the older siblings that he’s received earlier access to technology and in some instances, by years?  Because Eldest was home visiting from college over a recent weekend, she responded that it was really irrelevant now.  The communication platforms favored by the youngsters – even younger than the college crowd – has changed significantly from when she was that age less than a decade before and if it was interfering with his capability to have a healthy and active social life with his peers, then it was worth the upgrade.  To be fully equitable however, we also upgraded Middle to a smartphone and as a favor to me, my wife also got me one as well.

So technological change has altered the question of maintaining a degree of fairness amongst the children.  What we’ve seen is that the other factor which makes it more pertinent is the age differential between the various children.  If you have only a few years between the children, then the matter won’t be a potential booby-trap.  But if you’re talking anywhere around the vicinity of five or more years between the kids, then it’s liable to be more of a concern.  There are no right or wrong answers here.  But it’s worthwhile to be aware of the trip hazards as you negotiate the debate.

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Dystopia Comes Home

Teen and young adult dystopian literature has been around for a while but it’s darkly fascinating to see how the notion that something’s just not quite right is percolating through society.  So it was when I was chatting with Youngest one evening about his school day and found that he had an essay due along with the rest of his middle school English class.  The topic was both surprising and more than a little disturbing:  each student was to describe the one skill that they’d most prize should the economy collapse and things go to hell (my term, not his). 

We’ve known for a while that teens are feeling stress as acutely as adults and that their stress is timed to the school year.  The push for good grades and to ascertain what their career goals – not to mention getting into and funding the right school – make their teen years significantly more tense than it probably was two or three generations ago.  But throw in the refrain that a college degree has now supplanted the high school diploma as the baseline paper for some degree of financial success and the understanding that they’re likely to graduate with the equivalent car loan around their neck for a barista’s position, and they get it.  The question that it begs afterwards is how long this condition can last; more importantly, what happens to society afterwards?  So their literature has come to mirror adult literature with authors tapping into the zeitgeist to work through the issues.  Teens have seen their fictional societies ravaged by despotic regimes (Suzanne Collins’ The Hunger Games), aliens (Rick Yancey’s The Fifth Wave), nuclear post-apocolyptic societies (Veronica Roth’s Divergent series), and zombies (James Dashner’s Maze Runner and Charlie Higson’s The Enemy series).  Having seen each of these series come through the household with one child or another, I can only ask myself what else could possibly go wrong? 

But this particular essay assignment doesn’t have the Shakespearean suspend your disbelief quality that all of the previously mentioned series share.  This has an immediacy that touches them deeply.  Youngest’s generation is a group that has seen parents downsized and has seen a suburban school district host clothing drives each year, an event that didn’t exist until just a few years ago.  A nearby city school district has a Friday power-pack program that hands out hundreds of food-filled backpacks to students so that they have food for the weekend and don’t return to school the following Monday suffering from hunger.  This isn’t fiction and this isn’t unbelievable.  For them, this is real.  I don’t know what the teacher’s thought process was behind the assignment and I don’t know if that individual is a closet doomer or just looking to spur thought; I frankly don’t plan to bother finding out.  But it’s still an eye-opening assignment.

So as Youngest and I spoke, I inquired as to what his response was and after sharing it with me, we talked further about it.  My own comments afterwards were to what I myself would consider the most important skill set and not surprisingly, it had to do with the ability to determine what holds value for people and then knowing how to negotiate and barter.  Because if the s*&^ hits the fan as the phrase goes, money will rapidly disappear and we’ll be working on a barter basis.  The conversation ranged to the highly practical – and cynical – view of human nature and that perhaps the family’s stash of alcohol could be divvied into smaller containers for trade or supplemented with airline bottles.  It might even be of benefit to further supplement the stash with a supply of cartons of cigarettes for trade.  Is it an optimal outlook?  No.  But this type of scenario is going to require a pragmatic and clear view of the world around us, very different from what out youngsters have come to expect in their politically correct school cocoons. 

It’s been an interesting thought experiment in the days since that conversation.  If there is an economic collapse – and the constant 24/7 newscycle feeds that fear – what should you expect?  What do you believe that would resemble and more importantly, what is your plan?  How would you plan to handle the first several weeks if there’s a Greek/Cypriot style clampdown on bank ATMs or even a wholesale bank holiday?  Who is in your network of close friends upon whom you rely and in turn rely upon you?  Most importantly, what and how do you teach your children so that they can make their way as self-reliant and capable adults in such a world?  It’s not a theoretical question but goes to the heart of being a parent since our primary job is to raise the children to become self-reliant, productive and moral adults capable of making their way in the world. 

I doubt that my conversation about bartering booze and smokes necessarily fits into the category of moral, but it can help get through the immediate crisis period while we work on the other skills that would serve them better in the long-haul.  And it’s also part of our parental purview to help them determine what those skills are and how to foster them along.  So make an effort to prompt them on their days and their assignments.  The results can be more revealing than another piece of classwork designed solely to get them through the next standardized test.  And a note to myself – get a final copy of Youngest’s essay from his teacher.  It’s going to be an interesting read.

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So, Who Do You Like?

The question about the upcoming presidential primaries for the 2016 nominees has arisen on both end of the spectrums, from one of the kids as well as from my mother, who popped it during a lunch the other day.  So, who do you like?

While it would be a beautiful thing to be able to spit out a response in favor of a singular candidate – because it’s just time for a woman president, that’s why – I find that it’s difficult.  The reality is that the issue overshadowing all else is the control that the uber-wealthy and corporations now have over the legislative and electoral process.  And by uber-wealthy, I mean those who have .01% of the nation’s wealth…welcome back to the age of the Robber Barons. 

So the question arose again the other night where two of the three kids were gathered with us awaiting Middle’s event.  Both my wife and I looked at one another and the statements were identical and concise:  It doesn’t matter.  Taxes will go up regardless of who’s in office and Sanders is the only one with the guts to acknowledge that that’s going to happen.  But if Trump makes his way into office, don’t be surprised if they increase there either since it’s a mathematical certainty that the revenue will only flow if the taxes go up…because God knows we can’t control our spending.  We both elaborated further, knowing that the problems are wholly systemic and metastasized throughout the governmental body.  If you want to know the truth, the ideal candidate is already resigned to the notion that it will be a single term presidency and he/she will lose, if even willing to run for a second term.  Because the system will have to be shaken to the core and if successful, that President will be hated and derided and probably for a generation.  To call it a sobering commentary would be an understatement.

Here’s the thing behind the commentary.  Twain wrote that while history doesn’t repeat itself, it does rhyme and we’re now in a literal nursery rhyme with Andrew Jackson’s clash with Nicholas Biddle’s Second Bank of the United States.  In that instance, Biddle put the screws to the country by betraying its role as the ostensible central bank and withholding funds from smaller banks in order to pressure the Congress to renew their original charter.  This resulted in multiple small bank runs with the resultant ruin of thousands of depositors who lost all of their savings; but it also dramatized the threat that one or a few exceptionally wealthy and powerful individuals could pose to the body politic.  In that instance, Jackson’s response – combative and populist – was to withdraw the government’s deposits from Biddle’s bank, which served as the capital base for all that that bank was supposed to do.  In essence, Jackson allowed the financial system to collapse in order to save the promise of the still very young Constitution.  To do otherwise would have been to allow a single individual to use the power of the pre-eminent financial institution to gain control over the mechanism of government.  If Jackson folded and Biddle won, what else would have happened – or not happened – if it displeased the banker.

And with the Supreme Court’s 2010 Citizens United decision that effectively quashed any campaign finance reform, please feel free to explain to me how this is any different from 180 years ago?

Some years ago, I used to spend considerable time on a wonderful financial/economics site and in the course of an evening’s ongoing commentary with other members of that community, I commented this:  My hope is that when all of this is said and done, we come through everything with some semblance of an intact Constitution.  It sounds melodramatic, which I hate, but it’s not at all far-fetched.  The levers of power have been grabbed by the very wealthiest few and the corporations and they are actively solidifying their hold on said levers.  President Obama’s response in his first term should have been Jacksonian, moving to reform and re-institute meaningful regulation of the financial sector and he failed to do this.  That an Assistant Attorney General was canned and his then-Attorney General later acknowledged that the fear of financial damage to the economy affects decisions on prosecutions indicates the level of power of that sector and the fear that it engenders.  And now that the heads of JPM Chase and Goldman Sachs have both become certifiable billionaires under this arrangement, the financial sector is wholly part and parcel of the cabal.

The threat to the country is no longer economic but now, for all intents and purposes, both Constitutional and existential.  My thinking had been that the key factor to my choice of candidate would be what kind of person they’d likely nominate to the Supreme Court and how that individual would vote on such a decision as Citizens United.  That decision was reached by the narrowest margin of 5 – 4 and the dissenting opinion by Justice Stevens – eminently worthy of the read here – is a good distillation of the ultimate controversy:  with whom does the power reside?  I have become convinced that the trade and monetary policies of the past three decades have been purposefully passed with the understanding that they will ultimately benefit only a relative very few and that, at the cost of the great majority of Americans.  The hemorrhaging of the median family income isn’t a sudden event, but instead only the damage arising from the effects of three decades of cumulative muggings upon the American Middle Class.  Such is the effect of power moving to the control of a very self-interested few. 

My thinking about the candidate that I’d support went to the type of individual that would be nominated to the Supreme Court.  What would be the political persuasion and most importantly, their attitudes about the Constitution?  Strict constructionist?  Liberal?  It does matter because as much as I can appreciate the constructionist viewpoint, the reality is that we have issues today that would make our Founding Fathers’ eyes bleed.  Some things are the same, yet some are simply not.

At the end of the evening, we found out that Justice Antonin Scalia had passed away earlier that day and the narrow majority that ruled in favor of the Citizens United decision was now moot.  I was unaware of Scalia’s age and believed that the decision to nominate a new Supreme Court Justice would wait until the next president but that assumption is now moot.  It is the purview of any sitting President to nominate a person for the Supreme Court and for either side to cry for a delay is politics at its most venal.  But make no mistake, with the average age of the Supreme Court north of 70 years of age, it’s likely that the next President will also have the privilege of nominating a candidate.  If President Obama does nominate someone who would shift that 5 – 4 margin in the direction favorable to overturning the Citizens United decision, it would still be only a razor thin majority.  So that’s what I’m considering as both sides of the political spectrum continue to throw the middle finger at the political class.  Do I have a list of candidates for the Court should Trump, Sanders, Hillary or anybody else take office?  No.  But I’m not stupid either, and what they say – and how much money that they take – is a solid indication of where they’ll go.  And that’s likely to be where I’ll head, too.

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PracticalDad Price Index – February 2016:  Bare-Knuckle Price Fighting…

The pricing for the February 2016 edition of the PracticalDad Price Index is in with deflation in the 47 item grocery market-basket continuing.  As I sat there researching background information to understand something, it occurred that what we’re watching in the retail economy is best described as bare knuckled price fighting.  There was a time when grocery stores were adding upscale coffee kiosks and organic produce sections to entice customers, but that’s now in the past as stores are finding new ways to fight for the disappearing consumer dollar and it’s creating a feedback loop for deflation.  But first, the numbers from this most recent monthly pricing and then some comments both about what I’m seeing on the shelves and how this is impacting the Index.

The Total Index reading on the 47 item PracticalDad Price Index for February 2016 came in at 103.86 (November 2010 = 100), down from January’s 104.54.  The 37 food-stuff components sub-index for February was 104.27 (November 2010 = 100), likewise down almost a full basis point from January’s result of 105.25.  For the Food-only Subindex, this most recent result of 104.27 is fully 70% less than the high-point of that sub-index; it reached a maximum of 115.13 in December 2014 and has declined since that time. 

So there you have it.  More than a half decade of artificially low rates pushing the zero-rate boundary to spur inflation and all of those trillions of dollars of additional liquidity wiped away in the fourteen months since that peak.  Fourteen months and the aggregate pricing is now back at a level unseen since the summer of 2011.  A pound of hamburger and a package of hot dogs are still more expensive than at the outset of the survey in November 2010, as are some other food items, but it’s what has occurred with other items that provide a good explanation of deflation and what’s occurring within the greater economy.

What’s accounting for the ongoing deflation?  Simply put, the grocers are doing everything that they can to fight for the average family’s disappearing dollar – understand that one in seven Americans is now receiving government food assistance – and this consists principally of rolling out new products that cost less to produce, the lowest common denominator approach.  I’ve noticed this within the past year as two of the three surveyed grocers – each part of a separate grocery chain – established new pricing policies that moved towards low prices on store-brand products.  The third grocer is an independent whose store-brand within the past year has been completely replaced by another supplier with an across-the-board reduction in the price of each item surveyed.  But what has happened within the past several months is that one of the grocery chains is now in the process of supplementing its store-brand product line with another line of products that are offered by a grocery industry GPO (Group Purchasing Organization).  The savings on the products are significant; in the case of a can of vegetables, by a full 40% (from $.79/can to $.47/can) and this is being played out among other products within the basket.  It’s also led to a mental debate on whether and how to account for this shifting in the PracticalDad Index.

When the concept for the Index arose in 2010, the pricing was based whenever possible upon the lowest prices for the items and these were, in all instances, the store-brand (generic) lines of products.  Name-brand items were only used when the lower-cost store-brands weren’t available in all of the stores.  These lower priced alternatives to the store-brands simply didn’t exist in the products and it’s only within the past few months that this has fed into multiple products.  Should I account for them or not?  Given that the baseline premise for the survey was a marketbasket of grocery items being purchased by a family with children living within an alloted monthly food budget, I opted to account for the product shift as these items would be purchased by the budget-conscious family in lieu of the now more-expensive store-brand items.  These products aren’t going away and the question that I have, based upon what I’ve seen in one of the chain’s stores, is whether it will actually be the store-brand items going away instead.

I mentioned the term GPO in a previous paragraph and it’s useful to explain what that is.  A Group Purchasing Organization is actually an old concept now brought to the grocery industry.  The first GPO was started in 1910 by the New York Bureau of Hospitals and centralized purchasing of medical items for a number of hospitals in order to maximize buying power and gain price concessions from manufacturers.  This has long since caught on amongst other industries and holds true for the grocery industry as well.  What the Index now reflects is that one of the surveyed grocers now offers the low-end brand created and marketed by a GPO named Topco Associates, LLC.  This GPO is a privately held concern consisting of more than 50 separate grocery retail chains across the country with aggregate revenues in the billions of dollars and the organization uses this buying heft akin to that used by Walmart to gain concessions from food producers.  As I researched the concept of GPO for this article, I came across an online ad touting Do you want to be like Walmart?  The Walmartization of the American economy continues and I wonder where it will end.  As I write this, to my left is an orange can of low-cost coffee now offered by the other grocery chain as a supplemental choice to it’s own store-brand coffee and I surmise that it’s from yet another GPO (as yet to be determined).  And as you’d expect, it’s not good.

And now for the past six months of results.

 

PracticalDad Price Index – February 2016
Month Total Index Food-Only Index Spread
2/16 103.86 104.27 .41
1/16 104.54 105.25 .71
12/15 104.92 106.39 1.47
11/15 104.79 105.97 1.18
10/15 106.17 107.07 .9
9/15 105.21 107.12 1.91
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Driving Up the Cost of Higher Ed:  Globalization and the Knowledge-Based Economy

A short while back, my middle child and eldest son – aka “Middle” – asked me how college costs managed to rise so disproportionately over the past several decades.  The resulting article was a response to his question and looked at five different factors, each of which contributed to the present mess in the cost of a college degree.  The first of these factors was Globalization and this article is the first of a series examining the factors in greater detail.

Globalization wouldn’t be the first thing that springs to mind when you think about why the cost of higher education has risen so dramatically in the past three decades.  It frankly wouldn’t be the second or third thing either, since the effect upon the cost of a college degree isn’t primary.  The impact is derivative instead, yet it’s still important because it helped to pave the road for the persistent annual tuition increases as the institutions of higher education realized that there was now a massive and sustained rise in demand for their product:  a college degree.

Globalization is the economic principle that economic progress and advancement is improved for everyone when there is a free-flow of capital, technology, resources and labor across the globe and unhampered by national borders.  It is supposed to be a sort of rising tide lifts all boats effect as the aforementioned inputs flow to that global region best able to utilize them to produce in the most efficient and effective manner.  It is the linchpin concept behind the fiercely debated North American Free Trade Agreement of 1994 and the World Trade Organization, which was instituted by treaty in 1995.  It’s actually a reasonable concept and one that I didn’t oppose when the debates occurred two decades ago.  But where the issue had an impact on higher education was a subsidiary concept:  the Knowledge-Based Economy.

The Knowledge-Based Economy is of more amorphous origin, but the principle is predicated upon the notion that global resources are allocated where they can be most efficiently used until they can be brought to market as a final good or product.  Since one of the basic variable costs in production is labor, it makes intellectual sense to shift lower-end manufacturing – requiring little education and training – to third world locations where a peasant can be paid a small fraction of what’s earned by an American laborer.  This would continue and the First World nations would be left to utilize their own resources in the conceptual, design and engineering aspects of the production.  Higher-end and technical manufacturing would stay in the First World, at least until such time as the tides had lifted the other nations enough that they also had the intellectual and technical capabilities to support the design and engineering components.  Corollary to the Knowledge-Based Economy was the Service Economy, where American workers would be spending their time providing higher end services to run and support the now-displaced production aspects elsewhere across the globe.  I expect that some corporate visionaries envisioned a society in which the great mass of Americans became mandarin-like technocrats in a great machine that churned out profits enriching the lives of all privileged enough to participate.  But I also now expect that there was another group of corporate visionaries who saw this as the opportunity to offshore all manner of labor costs so that unions could be undercut and profits grown.  Understand one small yet highly significant fact from the early and mid-1980s:  there was a shift in how corporate senior executives were paid and stock packages and options now became even more potentially lucrative than salaries authorized by a Board of Directors.

So now start to think of higher education in terms of supply and demand and this is probably where these principles began to have an impact upon the cost of a college degree.  Preceding generations of young Americans had other alternatives to higher education so that there was less demand for it.  Young males could be drawn off into the military via the demands of the draft and the Cold War.  They also had options in sustainable, living-wage manufacturing and trades that did not require a degree.  Fewer women pursued a college degree since there were fewer, then-socially acceptable career paths available to them.  All of these factors meant that there was lesser demand for college, even though the GI Bill of 1944 had opened the spigot to higher education.  But then changes began.  The draft ended and the military shifted to an all-volunteer basis, followed two decades later by the end of the Cold War.  Women began to achieve greater opportunities for careers and there was a decided societal push for women to obtain an education and then a career.  And through the last three or more decades, the trickling shift of American jobs began and then became a torrent.

It was now here, at the end of the 20th century, that Globalization and the Knowledge-Based Economy became fully enunciated as guiding principles and the offshoring of American manufacturing began wholesale.  The resultant demand for a college degree turned the college marketing and admission process into a literal cattle chute and the colleges and universities realized that they had become – for many Americans hopeful for a future – the only game in town.  Even before this point, parents and guidance counselors pushed their kids to go to college so that they could have a better, more fulfilling future.  Mike Rowe, of Dirty Jobs fame, wrote about this in Popular Mechanics in August, 2013.  He described a conversation with his high school guidance counselor in which the counselor touted the value of a college degree, even to a kid who wasn’t certain of what he wanted except for the understanding that his own skill set might be more technical and practical than intellectual.  I can attest to this type of conversation as well in my own experience.  So there was already a presumptuous mindset about the value of college:   but the increased demand that came from social change and the simple removal of other viable options simply drove everybody to the chutes.

But here’s the thing about cattle chutes.  Some of them lead to slaughter pens.