Tuesday, November 18, 2008

Simple Gifts

With the stock market meltdown this autumn caused in no small part by greed and overregulation, we see a new paradigm emerging in the consumer ranks... non-consumerism. Rather, could people be saving money? Shocking, I know.

The financial "tsunami" hitting our shores came from an abundance of cheap money: low, low interest rates that encourage spending, not saving. Mortgages, car loans, durable goods, could be had at low or zero percent interest rates (not the mortgages) for anyone with a sliver of credit. Mortgages in particular were marketed and sold to anyone, regardless of the health of their pocketbook or future earnings valuations. Pretty soon everyone slept on a bed, in a home, built with debt.

The government began forcing financial institutions to lend money to credit risky individuals in the seventies under the Carter Administration. Under the Clinton administration those laws grew more teeth courtesy of Janet Reno, by threatening to investigate lenders that did not report enough loans to people in certain classes, demographics, or geographies. By forcing "diversity" lending, the government created a false market, fictional lending. Oh the lending was happening alright, but was based on a footing of sand.

Then comes the greed aspect. CEOs and others beholden to boards of directors and stockholders, having billions of dollars in virtually worthless assets, mortgages that once the rates adjust will become impossible for many people to pay back, found a way to make a buck. Repackaging the mortgages and selling derivatives on how they will do. Basically, betting on which groups will be able to pay those loans back, and trying to pass off the bad paper before too many go bust.

But it didn't work. Over-regulation, by creating that false market, did the inverse of what was intended... it allowed home ownership among persons with lower household incomes but then cruelly steals it away with adjusting interest rates when those payments well exceed incomes.

Many of those borrowers were sold their mortgages easily, without enough, and in some cases any vetting of financial data. Then people consolidated their debt by borrowing against the equity in their homes. Pretty soon homes were overvalued. Then those subprime loans began adjusting and WHAM, foreclosures. Foreclosures affect everyone, because when your neighbor has to short sell his house, the value drops, dragging your house value down with it. Empty houses dimish a neighborhood, bringing down property values. Eventually, all those equate into less money into the tax base and less money for schools, public safety, and other municipal cost centers. And once a few people start losing jobs, the dominoes really start to fall.

And Americans had their own greed too... thirst for a new car every few years, flat screen televisions, newest computers, Blackberries, designer handbags, boots, clothing, power tools, cell phones, video games, etc etc etc.

Americans haven't saved any money in the last ten to thirty years. Really, much longer than that. Our current account deficit is at an all time high and will continue to grow, leaving America more and more in debt to China. Now that alone should be classified a national security threat. We do not make all our own automobiles anymore, our own televisions, our own anything, except perhaps food. And why?

Part of the problem are labor unions that look at their employers almost voraciously, preferring to eat an organization alive by adding obscenely to overhead costs while ignoring the big picture. Why have cheap healthcare and big raises, when it means layoffs or possibly closing a facility? There was a time and a place for unions, still is in some cases, but too many use their power abusively and ultimately contribute to the demise of a company, or even an industry. The high cost of labor in the US has entirely undermined the manufacturing might of this country, putting so much in jeopardy, that today nearly every company left in America is looking for a handout. What happened to asking for a 'hand-up?'

During World War II, with so many men at war, women ran the military-industrial complex. Women were on the front lines of building atomic weapons. Families sacrificed, kids collected aluminum foil, women went without pantyhose, for such materials were needed in construction in order to help our boys fighting enemies abroad.

What have Americans been asked to do to help this war? Spend.

Spend your money, buy a tv, here's a stimulous check - go ahead, spend it all in one place. No one has had to sacrifice anything, few have become directly involved in the war effort, with the exception of those families with soldiers serving abroad. There is no connection between the American people and the effort to win the war in Iraq. There is no sense of common purpose, no sense of strength, no sense of doing the right thing, even if it is hard.

So, to American I propose, it is time to simplify. its time to stop chasing the Joneses, time to stop coveting our neighbor's property (like his BMW or his flat screen tv), and start living simply. As the Shaker song says:

Tis a Gift to be Simple
Tis a Gift to be Free
Tis a Gift to Come Down
Where you ought to be
And when you find yourself in a place just right
It will be in the valley of love and delight.

When true simplicity is gained
To bow and to bend we shan't be ashamed
To turn, turn will be our delight
Till by turning, turning we come round right.

I want a flat screen tv too. But I also want my kids to stop watching television and play with their toys more, run outside, and read. Should I buy that tv or pitch the old one I have with the green blotch on the left side of the screen?

The more things we own, the more things own us. Its true. That snowmobile, boat, rv, motorcycle, you-name-it purchased to make life easier, make it more relaxing, just adds stress. Stress to make payments, stress to maintain the machine, stress to store it, start it, use it enough to make it worthwhile. Pretty soon you're spending weekens in the fall putting away the boat, rv, jetski, instead of spending that time with your family or actually relaxing.

I think simplifying is the way to go. My house has minute closets, and by minute I mean microscopic. My daughter's bedroom doesn't even have a closet. I can't own too many clothes, because I just don't have enough room for them. Forces me to only own a few pair of jeans, and replace them when they are worn out. I own a few nice sweaters, jackets, dresses, and about 6 pairs of shoes, almost enough to get me by.

Finding the right balance is hard between all the committments we have in our day to day lives. So we have to reprioritize. Is it better to give our kids everytoy, game, machine or gadget when those things will ultimately take time away from our family? Every year we take our children to the toy store to go Christmas shopping for needy children. The money spent on those children is not spent on my kids, and they know it. But they get such a kick out of doing something good and thinking about someone else. Isn't it simpler to help another than to find more time to maintain the crap you bought for yourself?

So, while I say all this, I will also add that my iPod is charging. Yes, I have one, I love it. But its also simplified my life. No more CDs falling all over the car when I turn. I can take my music everywhere, and clear out some clutter in the process. So, I'm not saying deprive yourself of something useful and possibly transformative, but choose wisely. Make decisions deliberately, live deliberately, and simplify.

This is obviously too long a blog entry and really, too late at night to be writing it. more on simplification in the future. Join the movement, and simplify!

Friday, March 07, 2008

Profiting from Five Year olds?

Having attended School Committee and Selectmen meetings in recent weeks listening to the recommendations of the Financial Plan Task Force I must express some amazement at how enthusiastic and robust the town’s support for athletics remains. With a recommendation from the FPTF to consider self-funding high school athletics, coaches, parents and even a student or two spoke out against such an abomination.

Too bad these folks were so quiet when the School Committee and School Department were forced to cut teachers, library aides, textbooks, maintenance budgets, and so much more over the last six years. Where were so many of these residents when education was being cut in town?

The town is facing a major budget deficit for FY2009 alone, $5.3 million. The town will not receive any one- time monies from a middle school reimbursement, no teacher salary deferrals on the horizon, no discernable way to magically forge a balanced budget. There are two ways to close that gap. Either raise taxes or cut spending. Or both.

Looking at the budget, I had some questions about the logic and philosophy employed and I asked Scott Consaul and Mike Sitar about their positions, particularly their stands to preserve athletics in the high school . We recently learned that the town pays $475,000 for high school athletics. In order to self-fund athletics, some athletes would face exorbitant fees. Hockey players would have to pay $1300, and still buy much of their own equipment. As it stands, students pay a $100 athletics/activity fee per sport or co-curricular activity such as Drama or National Honor Society.

So, if we only charge $100 per sport, how do we justify charging $4000 for full day kindergarten?

I asked Consaul this question because I really thought I was missing something. I was told that full day kindergarten is a service the school department identified that parents want. True and they have made that service available only to those parents that can afford it. One argument I’ve heard is that many parents that opt for the full day option have paid between $10,000 to $15,000 for daycare up until kindergarten, so the $4000 option is a significant savings. Consaul even told me that the program is self- funding. Well, ok.

If it’s acceptable to make full day kindergarten self-funding at $4000 a pop, how can we only charge $100 per sport? Turning the school department’s argument on its head, most athletes playing varsity or junior varsity sports have been playing that sport for years. In many cases, parents are already paying hundreds or thousands of dollars for their children to play through the town or in club leagues. So, by the School Committee’s own reasoning, $1300 for hockey would still be a bargain.

In response, Consaul told me that he sees athletics as part of the high school curriculum.

But participation in athletics is not a requirement for graduation, so its really not part of the curriculum, despite the obvious benefits athletics provides.

“For many students, athletics is a cost effective way to keep them engaged in school, to keep them out of trouble,” said Consaul.

Half a million dollar cost effective? I’m not so sure I buy that explanation.

But what he said next is absolutely right.

“Whether athletics, music, art, extra-curricular or co-curricular activities, all make a well-rounded student. If we try to make any of the programs self-funding our students would suffer as a result.”

Apparently, self-funded full day kindergarten is acceptable suffering. Those parents that cannot afford it will find that their children are behind in first grade. Full day kindergarten is not half a day of curriculum and half a day of babysitting. It’s twice the amount of time to cover the same amount of material.

I’ve talked to kindergarten teachers in town and third grade teachers, whose current students were the experimental crop of kindergarteners that lost their mid-day bus to save half a million dollars. I’ve had teachers volunteer to me that the choppy kindergarten program is having lasting effects on our kids. To protest that full day kindergarten provides no advantage over two and a half days a week negates the entire purpose of offering full day kindergarten. It MUST have an advantage. Why else would parents pay $4000 for it?

I asked Mike Sitar, a vocal and strong proponent of athletics, how he responds to parents concerned that the schools have effectively cut reading drastically at the elementary level while only charging $100 athletic/activity fee.

The schools have cut reading specialists that aid struggling readers in early grades. The schools have cut librarians and library aides so much that kids take out library books once or twice a month. There are no spelling programs in the elementary schools anymore either; instead, teachers make their own word lists. The entire reading program at the elementary level is so old it’s out of print, though funding is in the new budget to buy a new series. And now the School Department wants to hire MCAS support positions to replace laid off reading specialists? That does not make sense to me. If we teach our children to read well, for meaning and with accuracy, won’t the MCAS abilities come on their own? Perhaps not, but no amount of MCAS support will teach a struggling reader how to read.

Sitar told me that he believes the town must provide an overall education for a child, of which athletics is a part. He did acknowledge there are some problems with the system.
I understand Sitar’s point, but I don’t accept it. Yes Tewksbury must provide a well rounded education and yes, athletics is a big part of that, but the first thing we must do is ensure that academics at all levels of education are sound, that we are not neglecting the needs of our youngest in order for older students to act in plays, throw footballs, and design yearbooks.

When I went to school all our activities were paid for by the town. I started numerous organizations at my large high school, some which flourish today. Athletics were something entire towns rallied around, especially high school basketball tournaments. In fact, we were not allowed to raise money outside school.

But times are different now. Costs have risen exponentially. Tewksbury needs answers.

Sitar also expressed a need to keep athletics in order to prevent more students from leaving the schools. Good students, he said. I’ve heard this argument before too. We have to keep athletics in order to keep kids in town, and particularly to lower our increasing obligation to the Shawsheen Tech. But we still have athletics and we are already losing students to the Tech and private schools. So, students aren’t leaving because we have athletics. Students are leaving because they do not feel they can get the academics and programs they need here in town.

If we make athletics and activities self-funding, will applications increase to the tech? Probably, but I do not see anything to stem the already increasing tide of students wanting out. If we work to improve our academic offerings, a rich selection of courses, more Advanced Placement courses, and even a few technical courses, we might be surprised at the results.

I amnot advocating the entire self-funding of athletics and activities but I do question where our priorities are as a town. We must be responsible stewards of the revenue we have to spend and the way in which we need to spend it. I cannot see how, failing an override, the school department can justify keeping athletics so inexpensive when we’re charging so much for kindergarten and cutting so much from elementary education.

I propose that the schools partially fund athletics and activities based on a sliding scale. Create two or three tiers of activities, the most expensive, like hockey or band in a higher bracket than soccer and National Honor Society. Instead of $1300 in self funding, a family could pay $650. A lower bracket might charge $100. Families may also be able to create a mix of activities for one higher fee, such as $1500 for unlimited activities, paid monthly. These numbers are simply placeholders, but in this way we can still offer athletics and activities, still at a reduced rate compared to town and club requirements for some sports, without further damaging academic programs.

The School Committee has a tough task ahead of them and I don’t envy them their decisions. We all must speak up about what we want our town and schools to look like. We all need to engage in the process with these departments because we are not out of the woods yet.

Monday, February 25, 2008

The Do-Nothing Congress or Roger Clemens' butt

Appeared in print February 20, 2008

Sometimes you have to wonder how the hell Congress spends its time and our money. Last week, Congress dispelled all mystery with a spectacular display of Congressional irresponsibility by arguing the finer points of Roger Clemens’ tush.

The hearing was a pitiful display of misplaced power, an example of a Congress run amok. Massachusetts even had a representative on the subcommittee hosting the hearing, Rep. Stephen Lynch. He spent his five minutes talking exclusively about Clemens’s buttocks. In particular, an abscess Clemens allegedly developed after McNamee improperly injected a steroid intramuscularly. I have to wonder how much time the honorable Representative spent on that stirring line of questioning.

On and on about Roger Clemens’ butt. Wednesday’s Congressional circus/witch hunt was more for congressional representatives to showboat than about trying to determine who was lying: Clemens, with his bleeding caboose and lack of memory, or McNamee with his changing memory and slimy ways.

At the end of the day, McNamee turned out to be a dweeb, made something by the caliber of men he served rather than honoring the tradition of his former career as a police officer. He was a pusher, a supplier, a purveyor of drugs that gave his clients the all-important edge, at the cost of his soul or at least his mail order Ph.D.

Clemens, for his portion of the dog and pony show, looked like a moron. He, and anyone who did not advise him to avoid a Congressional hearing at all costs, did a great disservice by appearing on Capitol Hill. He looked like a doof, saying McNamee and his good friend Andy Pettitte, “misremembered” their conversations. His dear friends “misheard” his comments during the period in question. In fact, Clemens’ really brought back a sort of Clintonian nausea stopping short of defining the meaning of ‘is.’

And then there is Arlen Specter, the senior senator from Pennsylvania, making a mad grab for power by trying to bring down the almighty Patriots. He wants to investigate the NFL investigation into the Patriots taping scandal.

Congress needs to solve real problems instead of going after these made-up ones. We are at war, the economy is sinking into a recession, a presidential election looms and looky here, we’re stuck with the Do-Nothing-Congress. Wasn’t this Congress elected with a mandate to get out of the war in Iraq? Wasn’t this Congress going to finally start funding education? Aren’t we all supposed to be better off now?

Tell that to those facing foreclosure, those who lost their homes, seniors with property taxes outpacing cost of living increases in their social security, parents that fight tooth and nail to obtain an education for a disabled child. The Democrats rule the legislature, so why can’t they get anything done?

This presidential election, on the Democrat side, is all about CHANGE. Change for what, of what? Change back to the “blame other people” politics of the Clintons? Or Barack Obama, a freshman Senator, spending more time on the campaign trail than voting on the floor. I wonder how the residents of the great state of Illinois feel about their AWOL representation. According to CNN, Obama has made less than a quarter of Senate votes. How can you change anything if you do not vote?

And therein lays the rub. Obama may not be voting, but voters are turning out in record numbers. In Tewksbury and Wilmington nearly 50 percent of voters showed up for the primary election, an enormously impressive number, particularly in light of recent years.

Anyone that has followed this column for the last couple of years knows how I loathe the apathetic voter. The demands on our time in this hectic world pull our collective attention away from the spending practices of school departments, the financial position of the town, and crumbling infrastructure. We are all content to leave it up to Superintendents, Assessors, Selectmen, and so on to watch over the business that so intricately affects our children, wallets, and property values, so we can practice our baser voyeurism following the Britneys, the Lindsays, and the other train wrecks of America’s youth. Or Roger Clemens’ bloody derriere.

We need to demand some accountability. Let us start with our Federal delegation. Other than the recently elected Representative Tsongas, who just visited the district two weeks ago in her Congress on your Corner program, I think some of these folks could stand to hear from you. Below find the district phone numbers for our elected officials. Give them a jingle and tell their staff what you really think. They pay attention, especially if enough people hold their feet to the fire.

Senator Edward Kennedy: (617) 565-3170;
Senator John Kerry: (617) 565-8519
Representative John Tierney: (978) 469-1942
Representative Niki Tsongas: (978) 459-0101

The White House Comment Line: (202)-456-1111