3 Things 10-18

10/18/2021 Although MAS is a financial services company, not everything published herein will be about numbers or investing. But no matter the topic, we hope for three things: 1) That you find the time you spend engaged worthwhile. 2) That you’ll reach out to us for help in any of our areas of expertise if something we discuss creates an urging in you to do so. 3) That you’ll share this with somebody new each time you read it. Thing One The Cure For High Prices In Education Do you know anybody who just had a kid? If so, the odds are, at this point anyway, that the proud parents would like to see that child go to college. There’s a big problem though. Depending on the source you pick, the average annual increase in tuition for college is anywhere from 6.5% to 8%. That means by the time junior is ready to go to college eighteen years from now tuition will be: $150,000 at a private school $42,000 at public school (in-state tuition) $108,000 at a public school (out-of-state tuition) (see chart for today’s rates) Please note that these amounts are annual and do not include room and board. So, just the tuition costs to send a child to a public school for four years to an in-state school would be $168,000. There’s a saying in the commodities business, “the cure for high prices is high prices”. In that realm, the cure usually works because the high prices attract more producers which increases the supply and causes the prices to fall. It hasn’t worked in education (yet) because the government has subsidized buyers (students) with loans that allow the prices to stay high. As the projected tuition amounts above suggest, that is not sustainable. And, despite the politically popular idea of making college free, unless the teachers, administrators, and all other employees at the school work for free and the utility companies all donate their services, etc., the costs will remain. So what will be called free by politicians will have to be paid for by all of us – and we just won’t be able to afford it. Something has to give and it will, eventually. What will it be? Who knows, but the education model is ripe for some creative destruction. It hasn’t changed in hundreds of years despite the fact that the sum total of the knowledge of mankind can be accessed by a 6-year-old without ever having to get out of bed and without ever having to pick up a book.



Thing Two Let Them Have It If They Want It You’ve likely heard of the push to make Critical Race Theory a curricular standard in America’s public schools. And you've also likely heard about certain school districts either deciding or proposing to do away with standardized testing of their students for placement and advancement in favor of selection methods that create a more ethnically diverse student body. This is all supposedly being done with the idea of creating a more fair and equitable society. Well, At the risk of being labeled domestic terrorists by an alarming number of politicians and bureaucrats, some parents are pushing back on the idea of CRT being taught to their children and on the idea that individual achievement as measured by standardized tests should be de-emphasized. But there are apparently large numbers of parents that are amenable to the idea of having their kids taught, as CRT holds, that America is, now and forever, racist at its core and that descendants of slaves can never overcome the conditions which oppressed their ancestors. Many of those parents are also okay with doing away with objective measures of educational performance. Why not let both sets of parents have their way? Allow the parents who want the more traditional educational approach – the one where the focus is on the three Rs and individual achievement is encouraged – to send their kids to schools so designed and allow the parents who want their child’s education to have a racial fixation and a bias towards relative social equity to choose that model. But explain to each set of parents, and their children to the extent that they are able to understand, the differences in the two approaches and make it clear to them that they will have to live with the results of the choice they make. And if that disclaimer causes blank stares, clarify it by saying that one method will likely create protesters while the other will create producers. The ones that aren’t offended by that simplification will probably not surprise you in the choice they make. For that matter, neither will the ones who are.


Thing Three Just A Thought “I would rather sit on a pumpkin, and have it all to myself than be crowded on a velvet cushion.” ― Henry David Thoreau