Our financial system is crumbling this week.

[Freed Roger]

The new face of poverty, as some things get really cheap while other things get more expensive:

http://www.slate.com/blogs/moneybox/201 ... _long.html

Not surprising - but still - wow.

[sighyoung]

College is awful. Even textbook prices are awful. I give serious thought to textbook choice because of those prices.

[IMADreamer]

College is awful. Even textbook prices are awful. I give serious thought to textbook choice because of those prices.

It's nice to hear professors do that. Most of my Meteorology professors used text books they had written and they also were around $150 each. By my second year I had made friends and three of us shared one text book for every Met, Math, and Physics class through the rest of college. Saved a freaking fortune.

[IMADreamer]

The new face of poverty, as some things get really cheap while other things get more expensive:

[SHOW]

http://www.slate.com/blogs/moneybox/201 ... _long.html

No surprise. Make the things to keep the poor occupied and content cheaper, while making the things that can make them less poor more expensive. Seems like a great plan if you want to ensure you stay in control.

[pioneer98]

That graph is pretty mind-blowing. It is well-documented why health care costs are rising. That's not a surprise. But college costs continue to amaze. I understand kids want to have a great college experience and that college is really important...but on the other hand, kids have a million choices about where to go to college. You'd think that would put more price pressure on it than it has. Some people think that the high price of college makes it seem even more valuable than it really is. A "cheap" college seems like it would not be as valuable, even though you probably learn the same stuff.

Also: food? Why is food getting more expensive? We subsidize it, and we also have a million choices on food as well.

Why does capitalism work so well to lower prices on TVs and cell phones, but not food or vehicle maintenance?

[heyzeus]

That graph is pretty mind-blowing. It is well-documented why health care costs are rising. That's not a surprise. But college costs continue to amaze. I understand kids want to have a great college experience and that college is really important...but on the other hand, kids have a million choices about where to go to college. You'd think that would put more price pressure on it than it has. Some people think that the high price of college makes it seem even more valuable than it really is. A "cheap" college seems like it would not be as valuable, even though you probably learn the same stuff.

My alma mater is a good school, ranked pretty well by US News. It was always in the top 5 for "value" rankings for private colleges; tuition was near $13k a year when I graduated in 2001. But it's a small school in Houston and the school's market research showed that name recognition wasn't as high as its rivals - Notre Dame, Emory, Duke, Vandy, etc. The research showed that because it cost so much less than its rivals, people perceived the school as a discount school, and therefore of lower quality.

So they fixed that problem. Oh, not the perception problem. They tripled the price. Tuition today is about $35k a year. I wouldn't go there today, and I'm not sure I'd want my kids to. $200k for an undergrad degree isn't a good use of an insane amount of money.

[sighyoung]

My university has sustained state budget cuts now in 14 of the last 15 years, yet we're called upon to be an "elite metropolitan university," whatever the hell that means. So they keep raising tuition. I've seen a raise twice in that time, so the cash isn't going to me. In fact, we keep losing good faculty to other schools because we won't give raises to people who publish regularly, are great teachers, and give generously of their time to colleagues and students. In fact, we're typically near the bottom of our peer institutions in terms of salary.

So, to free up money, the university is paying senior faculty money to retire early, then hiring either part-time faculty at $3,000 a course with no benefits, or junior faculty who will make roughly half what full professors make. They've gutted my department--out of roughly thirty-five faculty, eight are retiring this year, and two others took more lucrative offers at other schools. And all the saved money will simply go to the provost's office and president's office. We have no idea how much of that money will return to the department, or how much will be stuffed under the sofa cushions of central administration. It's pretty demoralizing.

[sighyoung]

My alma mater is a good school, ranked pretty well by US News. It was always in the top 5 for "value" rankings for private colleges; tuition was near $13k a year when I graduated in 2001. But it's a small school in Houston and the school's market research showed that name recognition wasn't as high as its rivals - Notre Dame, Emory, Duke, Vandy, etc. The research showed that because it cost so much less than its rivals, people perceived the school as a discount school, and therefore of lower quality.

So they fixed that problem. Oh, not the perception problem. They tripled the price. Tuition today is about $35k a year. I wouldn't go there today, and I'm not sure I'd want my kids to. $200k for an undergrad degree isn't a good use of an insane amount of money.

My alma mater is the same way. No way I could afford to go there now. So I've got a choice--my son can attend my school (which is decent, if you are a serious student and get the most out of your education), or see who will give the most aid, which will likely be a pittance. I'm thinking he'll attend here, because it's ridiculous to go into debt for six figures on an undergraduate degree.

[Mary1966]

I ended up with about $50,000 in student loans for six years of college (bachelor's and master's degrees) and when I got fired from my last full time job for having a nervous breakdown, I went into default and then applied to have the loans forgiven due to having a permanent disability. So now I owe nothing. But I can see how crippling student loan debt is.

Recently, I heard about some kids from my high school that were doing some work with the poor, and when they saw a flat screen TV in the living room, they didn't understand why poor people had a fancy TV. This graph explains why that would be the case. Paying for cable on the other hand, is very expensive and you can't get any channels without it in my apartment complex.

[AdmiralKird]

Why does capitalism work so well to lower prices on TVs and cell phones, but not food or vehicle maintenance?

Well lets break down the list:

RISING:

College and Tuition is a U.S. service. Most businesses won't hire for paying jobs you can afford to live comfortably on (and afford your kids tuition later !) without a degree, regardless of whether its actually necessary.

Health Care is a U.S. service. (Mo' meds, mo' problems, mo' solutions, mo' $)

Food is grown in the U.S. (and would probably drop in price if not for this French/Spanish company in St. Louis called 'Monsatano). But there are other factors such as farming being heavily reliant on mobile machinery dependent on oil prices.

Vehicle Maintenance is in the U.S. (cars are getting more complex).



FALLING:

Housing - Subprime mortgage dropped the market. The baby boomer population bubble is going away, increasing the supply with older homes becoming available for habitation. Younger people living at home longer, etc.

Clothing - Made in Malaysia.

Cell Phone Service - I have no flipping phone idea where they get that cell service is dropping in price, because all the providers are finding new ways to charge you more (if you have a smartphone you MUST have a data plan, removing old data plans, add'l random charges, raising upgrade fees, etc.)

Toys - Made in China.

Phones, etc - Made in China.

PC's - Components made in Asia.

TV's - Made in Asia.


----

So the short answer is that its not so much capitalism, its that your TVs and Cell Phones are made under neoslavery.

The real irony with education costs is that at no point in human history has such a vast catalog of free and easily accessible information been available to the public, yet the price that institutions can charge to regurgitate and certify is rising at ridiculous levels.