What Does A Parent Tell An 18 Year Old?
Readers suggested a topic on family and planning for the future. “So…….what does a parent tell an 18 year old about what she should do to get ready for the future? I have no idea what to tell her. An education is a major investment, and if the present trends continue, a total crap shoot on whether that investment will break even, much less give her any kind of advantage over some $10/day guy in Bangalore or Harbin. Especially when she doesn’t have any idea on what to major in.”
“And knowing her, college will be a waste of time/money if she goes, and doesn’t find a subject/career path that interests her. And doing math and science just for the sake of taking them, is not a great motivator for her. Her mom, an RN, is pushing the nursing route. She isn’t that interested, and it seems to me that that’s what everybody and their brother is working towards. In 5 years, we are going to be overrun by ‘health care professionals.’”
“Depression set in this week, when she saw all her friends heading off to college (blissfully unaware on how hard it is going to be to pay back $80-100K in student loans). That, and working two shifts at the ‘casual eating establishment’ and taking home exactly 30 bucks.”
“I never had the remote possibility of going to college, so I have no idea what to tell her. I see this country going into Banana Republic mode, if present trends continue (and no evidence to indicate that they are)…….maybe that’s just the natural order of things. To me, there’s a lot to be said for staying out of hock, and living in a bunker for the next ten years, until the dust settles.”
A reply, “She’s 18 years old. I don’t think she has to decide right now what to do with the rest of her life. The fact that she’s working is a good sign, even if it’s not a great job. Not many 18-year-olds have great jobs, nor should they. Not many people start out at the top. Ultimately, I think many more young people are going to going to go to college part-time while holding a job. Makes a lot more sense financially than starting out adulthood deep in debt.”
Another said, “I had 56 different jobs by age 26, at which time I sold my newer RX-7 sports car, abandoned my lease on a house on the boardwalk in Newport Beach, CA, and got serious about education. Some of us need time to explore. Result of AA, BA, MBA and two successful careers. And huge loans that took years to pay off. Retired at 53.”
“Worked out just fine. In this economy, student loans seem very, very risky. Guess I got lucky, but I was 5-10 years late in being employable anywhere that included a pension.”
Capital Media Services . “Most of Arizona’s metropolitan areas lagged behind the rest of the country in income growth between 2009 and 2010, a report from the Bureau of Economic Analysis showed. But particularly telling is that the earnings component — the amount of change due solely to what people were bringing home in their paychecks — was far below the rest of the nation.”
“Dennis Hoffman of the W.P. Carey School of Business at Arizona State University said most troubling is the attitude of consumers. ‘We’ve got confidence wounded and barely breathing,’ he said. And that was before the nation’s credit rating was downgraded and the markets took a beating. ‘Now we’re just taking a stick and just jabbing it,’ Hoffman said. ‘It’s worrisome.’”
“Marshall Vest of the Eller College of Management at the University of Arizona, said he also had hoped that the 2010 figures would be the bottom, with recovery beginning late in the year. ‘Clearly, the odds of recession have increased,’ he said.”
“Hoffman zeroed in on the poor earnings numbers. ‘Part of those lost earnings could be people that just left,’ he said, especially undocumented workers. He acknowledged that the report reflects what might be called ‘old news which confirms what everybody knew’ about the state’s economy for the last two years. ‘The real interesting thing is going to be what this is going to look like 12 months from today,’ Hoffman continued.”
“‘Any reasonable economic forecast had some improvement baked in the cake in 2011 and accelerating in 2012 and accelerating (again) in 2013,’ he explained. But he said the news of the last three to four weeks makes him doubt that. ‘I fear that we’ve stalled out here,’ Hoffman said.”
The Coeur d’Alene Press. “Living situations could be improving for Kootenai County families, according to numbers reported by a national data collection organization. But they’re probably getting worse, based on indicators from local nonprofits and agencies. Emily Simnitt, spokeswoman for the Idaho Department of Health and Welfare, said the number of folks on food stamps statewide has increased every year since 2008.”
“There were 20,507 individuals on food stamps in Kootenai County at the beginning of this year, Simnitt said, adding that about half of that tends to be children. ‘We know that many people who have been coming in for food stamps in the last few years have never been receiving assistance before, which is directly related to the economic downturn,’ she said.”
The LA Times. “To shield its economy from the fallout of the 2008 financial crisis, Beijing orchestrated a massive economic stimulus. It invested billions in infrastructure projects and encouraged banks to open the credit spigot to fund construction of apartments, office towers and retail centers. The strategy catapulted China past Japan to become the world’s second-largest economy; its growth helped keep the global slump from deepening.”
“But like taking steroids, there were side effects. The burst of credit has fueled inflation, which is proving painful for average Chinese. Soaring prices for pork, vegetables and other staples have authorities worried about the potential for social unrest. So has a property bubble that has put home ownership out of reach of millions, exacerbating the gulf between rich and poor.”
“Meanwhile, the nation’s debt levels have reached new heights. A national audit released in June found outstanding loans to local governments, among the biggest players in the building binge, amounted to $1.65 trillion, or nearly a third of China’s GDP.”
“The big concern inside and outside of China is a so-called hard landing. If Europe and the U.S. fall back into recession and demand for Chinese-made goods declines, Beijing won’t be able to juice its economy like it did the last time around. ‘It’s a lesson on the limits of stimulus. The more you do it, the less and less you’ll get out of it,’ said Patrick Chovanec, a professor at Tsinghua University’s School of Economics and Management in Beijing. ‘You’ve already tapped all the good investments out there. A second time, you’d just be shoveling money out the door…. It will just compound their problems.’”
“The best solution for China, analysts said, is to turn its own citizens into shoppers whose buying power can drive the economy forward. Personal consumption accounts for about 40% of GDP in China, compared with about 70% in the U.S. China’s per capita annual income of $7,600 ranks below Angola and Albania. Although disposable income is rising, most households remain obsessed with saving because the social safety net is so flimsy. Individuals must shoulder most of the expense for their own healthcare, education and retirement.”
“A migrant from central Henan province, Cheng earns $300 a month. He admired the styles on display in the window of the Gap store. But he shops in flea markets instead. ‘The clothes over there cost a tenth of my monthly salary,’ said Cheng, a 22-year-old cellphone salesman, nodding at the multi-story Gap. ‘After I paid for rent and food, I’d have nothing left if I bought something there.’”
From Asia News. “Due to over-production in the auto industry, at the end of this year there will be an excess of 10 million vehicles in China. This is more than the auto production in Japan in the year 2009. Another big problem is the surplus of real estate investment in China, which has reached a 30% bubble. There are 64.5 million vacant apartment units, enough to house 200 million people.”
“In China, an estimated 1,300 people control more than $1 trillion of assets. According to a survey by Western financial institutions, 1.5 percent of Chinese own 45% of bank deposits and 67% of assets. China’s state-owned enterprises enjoy more than 75% of the investment by the country, with more than 2/3 of the country’s fixed assets. During the 2008-2010 global financial and economic crisis, state-owned enterprises obtained more than 90% of the state funds to stimulate the economy. Nevertheless, 80% of China’s corporate profits come from 120,000 private SMEs, and less than 12 of large state-owned enterprises. Only under the conditions of monopoly are several state-owned giants such as Sinopec able to gain huge profits.”
“The Gini coefficient (which measures income inequality) has reached 0.57. In the 1980s, it was only 0.25; in the 1990s, it was 0.39. Now, this coefficient is much higher than the 0.43 of the United States, and 0.37 of India. In China, the people who have average living expenses on the absolute poverty scale of less than $2/day have reached more than half of the entire population of more than 1.3 billion.”
“The most severe problem is the more than three trillion U.S. dollars foreign exchange reserves China has. During the recession, the government should apply a policy of collecting domestic currency in an effort to restrain inflation. The specific approach is very simple: allow converting foreign currency freely on the one hand and on the other hand raise the currency exchange rate. In this way the circulation of the domestic currency on the market will be reduced, and the inflation will naturally decline. But why does the Chinese government continue its stand, and not take such a simple measure? It is due to the difference between bureaucrat-capitalism and democratic politics.”
“From the viewpoint of bureaucratic politics, eliminating inflation is not beneficial for them to continue to earn excess profits. An appreciation of the RMB would make the current expensive housing market in China even more unable to find buyers. The collapse of the housing market in China would be a direct harm to the interests of bureaucratic capitalism. It would be absolutely unacceptable to the bureaucratic capitalist clique in China that is controlling Chinese politics now of course, the Chinese Communist regime that is relying on the support of the capitalists would not accept it either. Politics has become the politics for the capitalists, and already very far from the interests of the average Chinese. This is the root reason that the economic and social problems in China are not solved.”
“The view from the national interest and the Chinese people is completely reversed. Opening the free exchange of currency, and improving the RMB exchange rate, coupled with opening of a fair import market, will control inflation within six months. But, this would make the businessmen with black hearts making money from high prices lose profit. More importantly, the real estate tycoons in China who made a lot of money along with the bureaucratic businessmen in China by forced demolition and relocation of the Chinese citizens, may have to go bankrupt. As a result, China will lose half of its billionaires.”
‘Meanwhile the lowered house prices from the bankruptcy auctions will reduce the number of people who are facing housing hardship to half. In this round of interests confrontation, we can clearly see which kind of government the Chinese Communist Party regime is. It is a political power of the bureaucratic capitalist standing against the people.”
