Tag Archives: Economics

Tad Hopp accumulated $100,000 of college debt, now he wants a taxpayer bailout

Here’s an interesting editorial from a “Christian” left blog. (H/T Acton Institute)

The author, Tad Hopp is graduating a PCUSA seminary – an extremely liberal, left-wing denomination.

He writes:

I graduated college in 2007.

[…] I majored in English, not exactly what most people consider a ‘marketable’ or ‘practical’ degree…

[…]I went to a somewhat expensive private school…

[…]I did what many students in their last year of high school do: I went to the school where I felt I was being called…

[…]I do not regret my four years at my undergraduate institution one bit.

[….]When I graduated college, I owed nearly $50,000 in student loan debt and was unemployed for almost six months before I finally found a low-paying office job.

[…]“Can’t find a job? Well, you should have majored in something more ‘practical’, like economics or business or medicine.” Yeah, that would be great…if those were the subjects where my skills and passions lie. They’re not.

[…]I felt called to go to seminary.

[…]I will graduate seminary with close to six figures worth of student loan debt.

Let’s take stock of what he’s said so far:

  • he studied English, a language that he already spoke, which has one of the lowest employment rates
  • he was warned by people who knew something about earning and saving money not to study English
  • he went to a school he couldn’t afford to go to, and he graduated with $50,000 in debt
  • he went to seminary, another subject that doesn’t pay, and added another $50,000 or so of debt
  • he says that he doesn’t have to study subjects that lead to a career because he isn’t “passionate” about them
  • he “followed his heart” by going to the school that he had mystical, emotional, intuitions about = “calling”

My advice to Tad at this point would be for him to take the Bible seriously when it says this:

2 Thessalonians 3:10:

10 For even when we were with you, we used to give you this order: if anyone is not willing to work, then he is not to eat, either.

And 1 Timothy 5:8:

8 But if anyone does not provide for his own, and especially for those of his household, he has denied the faith and is worse than an unbeliever.

The Bible is giving us the goal of working. So what should we do to be able to reach that goal? Why should anyone hire us? What is working really about? It’s those kinds of questions that should guide what we study in school, and what jobs we pursue.

We know what careers have the highest starting salaries and mid-career salaries:

1. Computer Science

2. Electrical Engineering

3. Mechanical Engineering

4. Chemical Engineering

5. Industrial Engineering

6. Information Technology

7. Civil Engineering

8. Statistics

9. Nursing

10. Management Information Systems

11. Finance

12. Mathematics

13. Biomedical Engineering

14. Accounting

15. Economics

16. Physics

17. Biotechnology

(Source)

Why do some people get paid more than others? The answer is supply and demand. Prices are a way of determining what is most valued by your fellow man. Business owners pay more to people who offer their customers more value. If you really want to serve your neighbor, you have to learn something they really want, but can’t easily obtain. And then you will be paid more. You can’t do what makes you happy. You have to do what makes customers happy. That’s how the free market works – you make money when you provide something of value to others. You make money when you serve others. This is something that is very hard for self-centered, feelings-driven young progressives to grasp. But it’s something older Americans all know.

More Tad:

Is the PCUSA doing anything to address this crisis?

[…]What has our government done to address this issue?

[…]I, like so many in my generation, voted for Obama…

[…]It seems to me that we’ve bought into the lie that student loan debt is brought on by the individual person…

[…]You know what I think might stimulate the economy? Automatically cancelling every single outstanding student loan!

He insists that the results of his own choices aren’t his fault. But didn’t he make the choices about what to study? Didn’t he make the choice to follow his heart? Didn’t he disregard the advice of people who urged him to be practical? Who is to blame, if not he, himself?

Tad needs to push away all his friends who told him to “follow his heart” and stick close by his friends who told him to focus on providing value to others. Don’t look for advice from dreamers, look for advice from doers. Dreamers talk. But doers have demonstrated the ability to create plans that work to achieve results.

By the way, some of you might be wondering how serious this person was about his Christianity. Well, in another post, he comes out as gay. So clearly the Bible is being interpreted in a way where feelings are overturning the plain meanings of words. People who read the Bible closely never come away with the message that they should follow their hearts.

Two black economists explain how to end poverty in America

These days, everyone seems to think that being good to the poor means looking around to see what people are saying is good to the poor, then loudly shouting your agreement with it. People want to look good to others more than they want to help others. Besides, looking good by loud virtue signaling is free. If we really wanted to help people, though, we should tell them to do what will work.

So let’s talk about poverty in America, with help from famous black economist Walter Williams.

First, he says real poverty is not common in America:

There is no material poverty in the U.S. Here are a few facts about people whom the Census Bureau labels as poor. Dr. Robert Rector and Rachel Sheffield, in their study “Understanding Poverty in the United States: Surprising Facts About America’s Poor”, report that 80 percent of poor households have air conditioning; nearly three-quarters have a car or truck, and 31 percent have two or more. Two-thirds have cable or satellite TV. Half have one or more computers. Forty-two percent own their homes. Poor Americans have more living space than the typical non-poor person in Sweden, France or the U.K. What we have in our nation are dependency and poverty of the spirit, with people making unwise choices and leading pathological lives aided and abetted by the welfare state.

Second, the “poverty” is not caused by racism, but by poor choices:

The Census Bureau pegs the poverty rate among blacks at 35 percent and among whites at 13 percent. The illegitimacy rate among blacks is 72 percent, and among whites it’s 30 percent. A statistic that one doesn’t hear much about is that the poverty rate among black married families has been in the single digits for more than two decades, currently at 8 percent. For married white families, it’s 5 percent. Now the politically incorrect questions: Whose fault is it to have children without the benefit of marriage and risk a life of dependency? Do people have free will, or are they governed by instincts?

There may be some pinhead sociologists who blame the weak black family structure on racial discrimination. But why was the black illegitimacy rate only 14 percent in 1940, and why, as Dr. Thomas Sowell reports, do we find that census data “going back a hundred years, when blacks were just one generation out of slavery … showed that a slightly higher percentage of black adults had married than white adults. This fact remained true in every census from 1890 to 1940”? Is anyone willing to advance the argument that the reason the illegitimacy rate among blacks was lower and marriage rates higher in earlier periods was there was less racial discrimination and greater opportunity?

Third, avoiding poverty is the result of good choices:

No one can blame a person if he starts out in life poor, because how one starts out is not his fault.

If he stays poor, he is to blame because it is his fault. Avoiding long-term poverty is not rocket science. First, graduate from high school. Second, get married before you have children, and stay married. Third, work at any kind of job, even one that starts out paying the minimum wage. And finally, avoid engaging in criminal behavior. It turns out that a married couple, each earning the minimum wage, would earn an annual combined income of $30,000. The Census Bureau poverty line for a family of two is $15,500, and for a family of four, it’s $23,000. By the way, no adult who starts out earning the minimum wage does so for very long.

Fourth, what stops people from making good choices is big government:

Since President Lyndon Johnson declared war on poverty, the nation has spent about $18 trillion at the federal, state and local levels of government on programs justified by the “need” to deal with some aspect of poverty. In a column of mine in 1995, I pointed out that at that time, the nation had spent $5.4 trillion on the War on Poverty, and with that princely sum, “you could purchase every U.S. factory, all manufacturing equipment, and every office building. With what’s left over, one could buy every airline, trucking company and our commercial maritime fleet. If you’re still in the shopping mood, you could also buy every television, radio and power company, plus every retail and wholesale store in the entire nation”. Today’s total of $18 trillion spent on poverty means you could purchase everything produced in our country each year and then some.

Regarding those last two points, here is another famous black economist, Thomas Sowell:

Economist Thomas Sowell blames welfare for killing the black family
Economist Thomas Sowell blames welfare for killing the black family

To illustrate this point, here’s a graph with some helpful data taken from the U. S. Census.

In fact, there is a whole video featuring Thomas Sowell to go with this graph:

Black women were more likely to be married before welfare programs
Black women were more likely to be married before welfare programs

And an article to go with it:

If we wanted to be serious about evidence, we might compare where blacks stood a hundred years after the end of slavery with where they stood after 30 years of the liberal welfare state. In other words, we could compare hard evidence on “the legacy of slavery” with hard evidence on the legacy of liberals.

Despite the grand myth that black economic progress began or accelerated with the passage of the civil rights laws and “war on poverty” programs of the 1960s, the cold fact is that the poverty rate among blacks fell from 87 percent in 1940 to 47 percent by 1960. This was before any of those programs began.

Over the next 20 years, the poverty rate among blacks fell another 18 percentage points, compared to the 40-point drop in the previous 20 years. This was the continuation of a previous economic trend, at a slower rate of progress, not the economic grand deliverance proclaimed by liberals and self-serving black “leaders.”

Ending the Jim Crow laws was a landmark achievement. But, despite the great proliferation of black political and other “leaders” that resulted from the laws and policies of the 1960s, nothing comparable happened economically. And there were serious retrogressions socially.

Nearly a hundred years of the supposed “legacy of slavery” found most black children being raised in two-parent families in 1960. But thirty years after the liberal welfare state found the great majority of black children being raised by a single parent.

The rest of the article points out how even crime rates among blacks were caused by the implementation of soft law enforcement policies by progressives. Just look at the big cities if you want to know what it is like for blacks to be ruled by Democrats. It sucks!

If everybody started to read more Thomas Sowell books, we would be much better off as a country! Only good things happen when people stop watching TV and listening to music and watching movies, and instead settle down in a chair with a Thomas Sowell book. I recommended a bunch of them in a previous post.

Is there evidence of systemic racism in the United States?

Systemic racism is the idea that people can’t lift themselves out of poverty by making good decisions, because powerful groups in society that hold the poor down, regardless of their decisions. Do you think that America is a place where no matter what choices you make, you’ll never be able to be more prosperous? That’s what the leaders of Black Lives Matter think.

Here’s what Nikole Hannah-Jones, creator of the 1619 Project, says in the New York Times (a former newspaper):

To summarize, none of the actions we are told black people must take if they want to “lift themselves” out of poverty and gain financial stability — not marrying, not getting educated, not saving more, not owning a home — can mitigate 400 years of racialized plundering.

Got that? It doesn’t matter what individual choices a non-white person takes in America, they’re going to be poor. The “systemic racism” of the powerful whites will always keep them down. Single motherhood doesn’t make people poor, and marriage doesn’t make people wealthier. Dropping out of high school doesn’t make you poor, and getting a Masters degree in computer science won’t make you wealthier.

But let’s take a look at the data from the 2019 Census, and see the evidence:

Income By Ethnicity in America
Income By Ethnicity in America

White people are doing a bad job of keeping non-whites down

Well, it looks like at least SOME people of color are able to do well in America despite all the “systemic racism” that keeps non-whites down. And do you know what those non-white groups at the top have in common? They’ve made good decisions, they’ve worked hard, they haven’t blamed other people when they fail, and they’ve saved their money instead of spending it on shiny junk.

Let’s look at some decisions that the non-whites who are prosperous have made, that those further down have not.

Asians marry before they have children, so the kids have two parentsAsians marry before they have children, so the kids have two parents

Education and marriage

This article is written by the far-left radical Nicholas Kristof, writing in the radically-leftist New York Times (a former newspaper).

Excerpt:

A new scholarly book, “The Asian American Achievement Paradox,” by Jennifer Lee and Min Zhou, notes that Asian-American immigrants in recent decades have started with one advantage: They are highly educated, more so even than the average American. These immigrants are disproportionately doctors, research scientists and other highly educated professionals.

It’s not surprising that the children of Asian-American doctors would flourish in the United States. But Lee and Zhou note that kids of working-class Asian-Americans often also thrive, showing remarkable upward mobility.

[…]There’s also evidence that Americans believe that A’s go to smart kids, while Asians are more likely to think that they go to hard workers… Asian-American kids are allowed no excuse for getting B’s — or even an A-. The joke is that an A- is an “Asian F.”

One reason Asians students do so well is because their parents are usually married:

Strong two-parent families are a factor, too. Divorce rates are much lower for many Asian-American communities than for Americans as a whole, and there’s evidence that two-parent households are less likely to sink into poverty and also have better outcomes for boys in particular.

American blacks have a 73% out-of-wedlock birth rate. A huge difference compared to Asians.

So, when Nikole Hannah-Jones tells you that education and marriage don’t matter, she’s just wrong.

Compound interest

Education and marriage are important, but so is saving your money. The wealthiest people in America are typically the ones who are experts at saving money early, and investing it. They know about the law of compound interest. If you invest money early and leave it alone, then it will grow into a fortune by the time you are read to stop working.

This graph explains compound interest:

Don't trust people with non-STEM degrees to tell you how to get richInvesting $24,000 from age 21 to 41 vs investing $24000 from age 47 to 67

What does Nikole Hannah-Jones say when she looks at that graph? She doesn’t think that saving money makes a difference to having more or less wealth. She thinks skin color determines whether saving money makes you wealthy or not. The graph clearly shows what we should be recommending to young people of color. They need to stop spending money and start saving it, and the earlier the better. It doesn’t matter what your skin color is, saving money early JUST WORKS.

Similarly, when she says that home ownership doesn’t make you more wealthy, this is just terrible advice. It’s always better to pay down your own mortgage (at least when interest rates are low like they are now) than to pay someone else rent. You have to live somewhere, and paying for your own home is better because it costs about the same as rent, and then you get to keep the home when you’re done paying for it.

Communism

Nikole Hannah-Jones does have a “solution” to disparities in wealth. Her solution is communism. She wants to transfer money from those who earn, to those who don’t. But we already have tried that in the 20st century and it resulted in the deaths of over 100 million people. That’s not my opinion, that’s all documented in a book published by Harvard University Press.

Socialism Communism Countries Per Capita GDP Income
Socialism Communism Countries Per Capita GDP Income

You don’t even have to read the book to know the truth – just look at countries that score low on the Index of Economic Freedom, and compare their GDP per capita to countries that score high on the Index of Economic Freedom. The more communist a nation goes, the less wealth there is for the citizens. That’s why people in Venezuela are eating zoo animals and selling their bodies in prostitution for food, while nearby capitalist countries like Panama and Chile prosper. Nikole Hannah-Jones wants to reduce economic freedom, but we know by looking at other countries that this lowers per-capita GDP.

There’s a lot more than could be said here, but the point is that we need to be telling American blacks to make decisions that match the decisions of other successful non-white communities in America. We need to start teaching young people basic economics so they don’t fall prey to charlatans.