Buying American?

[Richard]

Satire...but is it really...???

http://www.youtube.com/watch?v=Vq8wb...5%208252932.02

And so it goes...

Richard

[nmap]

Let us suppose we have a community of three people.

One mows lawns. One cleans houses. One grooms dogs.

So the three people have a small economy, mowing each others' lawns, cleaning each others' houses, and grooming each others' dogs.

Each is a pro, and charges handsome fees for their services. They each make a great income.

So why are they all grindingly poor? No one makes anything.

And what is the U.S. doing? We are sending our manufacturing base to China. Now, we're sending our office work to India. We are running a trade deficit every year.

This will continue until U.S. wages match wages elsewhere around the world - unless and until we replace our commitment to free trade with a commitment to fair trade.

By the way - who said fair trade was the best choice? Where did it come from? A fellow named David Ricardo, who retired from stock brokerage to become an amateur economist. Has the world, and hence the value of comparative advantage changed in nearly 2 centuries? I wonder.

Originally Posted by nmap

This will continue until U.S. wages match wages elsewhere around the world - .

.

So I should be happy with a buck eighty five an hour? Like other 3rd world countries?

[nmap]

Originally Posted by armymom1228

So I should be happy with a buck eighty five an hour? Like other 3rd world countries?

Happy? No. But, unless policy changes, you might wish to plan for it.

By the way - $1.85 per hour may be a tad optimistic.

Originally Posted by nmap

Happy? No. But, unless policy changes, you might wish to plan for it.

By the way - $1.85 per hour may be a tad optimistic.

As long as everything else is scaled back I could probably live with it. But do you realy think a landlord is going to scale back from $500/month to $50? I don't think so.
The entire economy would have to be dialed back.

[Paslode]

Originally Posted by armymom1228

As long as everything else is scaled back I could probably live with it. But do you realy think a landlord is going to scale back from $500/month to $50? I don't think so.
The entire economy would have to be dialed back.

As individual income declines, landlords are likely to be forced to lower rent or face a glut of vacant units.

[The Reaper]

As far as rents go, let's assume I have a rental house in Fayetteville.

The rental income is $750 per month.

At least once every year or so, something major breaks or needs to be replaced. I replaced the siding a few years ago, then redid the kitchen and bathrooms. That was a big year, probably spent close to $10,000. The interior runs almost $1,000 to have painted. The current tenant wants new carpet, which was replaced three years ago before she moved in. We are holding her off for now. Nevertheless, I can reliably count on at least $1,000 per year in repairs and expenses. It can be as much as ten times that.

Taxes are now up to $856 per year. Insurance is another $200 or so. Neither of those numbers is going to go down.

The house has sat unrented, on occasions past, for as much as six months, during which the power has to be left on and the water. Assume it only takes one month to find a new tenant.

The mortgage payments have to continue, regardless, until the loan is paid off.

In the best case, I might take in $9,000 in rent per year, and owe at least $2,000 or so in fixed expenses, even if it continually rented. That leaves $7,000 to pay the mortgage. No problem.

Average year, house is unrented for a month, same bills, now you have $6,250 to pay the mortgage. Still doable.

Bad year. Six months, no rent. $10,000 to update/repair property, still paying the same property taxes and insurance, plus 1/2 year of mimimum utilities. $4,500 income, less $12,000 in expenses. You lost $7,500 out of pocket, and still have to pay the mortgage.

Cut the rent? I don't think so. Sell it or give it back to the bank.

I am keeping it for the tax deductions, but I am already considering selling the house. If the taxes go up any more, or the real estate market recovers sufficiently, I will probably get rid of it. Too many headaches and too much potential downside.

TR

[Pete]

Originally Posted by Paslode

As individual income declines, landlords are likely to be forced to lower rent or face a glut of vacant units.

How low can you go?

In addition to trying to make a profit property owners have to make enough to pay the bills and TAXES.

Government is not going to cut back - look for government workers to do OK - on the backs of others.

Edited to add - As TR noted

[Ret10Echo]

Originally Posted by Pete

How low can you go?

In addition to trying to make a profit property owners have to make enough to pay the bills and TAXES.

Government is not going to cut back - look for government workers to do OK - on the backs of others.

Edited to add - As TR noted

One observation I have made while looking at city and town statistics (as I dream of escaping the D.C. Metro one day). Take a look at towns in areas generally considered to be economically depressed. The number one employer in these areas is usually Government (at some level) followed shortly thereafter by the local hospital. I believe that to be an indicator. Government doesn't "make" anything, so this plays directly into the theme here.

Too bad you can't send THAT to India.

[Paslode]

Originally Posted by Pete

How low can you go?

That is a good question and one many property owners are pondering.

Lower the price, you'll be full with little profit. You keep your prices high, you have more vacancies and you can't met the bills.

It looks like a losing battle to me.

[Pete]

Originally Posted by Ret10Echo

....... The number one employer in these areas is usually Government (at some level) followed shortly thereafter by the local hospital. ...........

What is government in the typical county away from big cities? Just who is a local government employee?

City and County workers downtown in the offices is what most people think of but you also have County Social Serves, Health Services, Fire, Police, Trash, the guys at the land fill, county jail, Public Transport workers to include maintenance, and the big cat in the bird cage - the school system plus many, many more.

Those numbers are very easy to turn out for elections getting who they want in office.

And I'll bet most country and city politicians don't have an exact count of thier employees. They know a chunk of money goes here - another one there - but numbers?

For example the Cumberland County school system states it has 6,952 employees - but does that include the SRO? SROs and crossing guards are from the county sheriff's office. The county has 78 schools.

An interesting note about the school system. It has 53,162 students or 1 employee per every 7.64 students.

Back when my kids started school in 1995 it was around 51,000. It has varied a little each year since then but the number of employees grows each year. The Hoke and Harnett school systems have exploded.

Just think about that number. Almost 7,000 people work for the schools in Cumberland county.

[The Reaper]

When I was in a county vocational ed high school in the dark ages, the only adults in the 800 student high school were the principal, vice prinicpal, secretary, two janitors, and the six ladies in the cafeteria.

Everyone else taught, to include the coaches, bus coordinator, etc.

I cannot believe that we have less than 1:8 staff student ratio and 1:30 classes.

That is hellaciously bad tooth to tail ratio.

Guess a powerful union helps.

TR

[GratefulCitizen]

Originally Posted by The Reaper

When I was in a county vocation ed high school in the dark ages, the only adults in the 800 student high school were the principal, vice prinicpal, secretary, two janitors, and the six ladies in the cafeteria.

Everyone else taught, to include the coaches, bus coordinator, etc.

I cannot believe that we have less than 1:8 staff student ratio and 1:30 classes.

That is hellaciously bad tooth to tail ratio.

Guess a powerful union helps.

TR

Can't remember where I saw the study, it was back in the early '90s.
IIRC, it indicated that a given "school" (elementary w/1 principal, jr. high w/1 principal, etc.) suffered from diseconomies of scale once the student body exceeded 400.

What are the arguments for having schools with more than 400 students?

[Sigaba]

Guess a powerful union helps.

If only some unions learned the difference between power and effectiveness. The L.A. teachers' union is up in arms again. Source is here. Video is there.

LAUSD Paid $200M on Unnecessary Salaries: Audit
By JOEL GROVER and MATT GOLDBERG
Updated 11:09 AM PST, Tue, Jan 12, 2010

A bombshell internal investigation by the LAUSD reveals the school district wasted $200 million of taxpayer money last year on unnecessary salaries.

NBCLA obtained the audit, done by LAUSD's Inspector General.

The audit said there are some 1,700 employees on the district's payroll who shouldn’t be there. These are employees who were hired for temporary jobs, but stayed on after the funding for their jobs expired, and continued to get paid by the district.

"I'd like to know what they're doing? They're getting paid. What are they producing?" said A.J. Duffy, president of United Teachers of L.A.

The internal audit said the district last year employed 1,358 teachers, and another 348 non-teaching employees, whose jobs were "unfunded and expired," costing the District $200-million in 2009 alone. LAUSD's Inspector General said this waste of money has put LAUSD at an “unacceptable high level” of financial risk.

LAUSD Superintendent Ramon Cortines would not speak with NBCLA on camera about the audit's embarrassing findings. But in an emailed statement, Cortines said he was aware of of this problem revealed by the audit, and has already worked "to address this issue."

The superintendent said he agrees with most findings of the audit, but "disagrees with the cost cited in the report" regarding the amount of money.

The revelation that LAUSD is once again wasting a large amount of money comes at a bad time. The district is asking teachers to take a pay cut and accept furloughs.

"My teachers are going to be angry," said Duffy.

IMO, A.J. Duffy is the last guy in L.A. who should be talking about holding others accountable.

The on-line edition of the L.A. Times story is here.

L.A. schools paid $200 million more in salaries than budgeted
The payments occurred despite the layoffs of 2,000 teachers and hundreds of other employees. Auditors say they have found no wrongdoing, but officials are puzzled.

By Howard Blume

January 14, 2010

The Los Angeles school district paid $200 million more in salaries than it budgeted last year even as it laid off 2,000 teachers and hundreds of other employees, according to an internal audit.

Auditors so far have unearthed no wrongdoing, but officials are puzzled, concerned and perhaps even a little embarrassed.

"We've been in the process of cleaning it up," said L.A. schools Supt. Ramon C. Cortines, who said his staff is verifying the size of the discrepancy and will, over time, determine how much relates to incomplete accounting and how much to something more serious.

The issue emerged in an audit, completed in December, on the arcane subject of "position control."

It looked at how well the Los Angeles Unified School District keeps track of salaried positions.

Not well, concluded auditors working for the district's inspector general.

"The system is broken," said Inspector General Jerry Thornton.

"We really don't have adequate position control and we don't know where our funding comes from for all these positions," Thornton said.

He added: "There's no suggestion of impropriety or fraud. We didn't see people being paid who aren't working or who aren't there."

Last year, the district listed 76,860 full-time positions, which were supposed to cost $4.7 billion. Instead, the district spent $4.9 billion.

Auditors have yet to identify where the bulk of the difference came from or to whom it went.

In some cases, unfunded or expired positions remained on the payroll. In others, jobs that persisted on the payroll turned out to be vacant. Problems turned up with about 3,000 positions.

The audit results are the latest painful addendum to a payroll debacle that resulted in thousands of employees being under- or overpaid starting in January 2007.

In this instance, the high-tech but poorly configured new payroll system was supposed to catch salary irregularities, but that feature was never installed.

Some of the latest problems emerged as the cash-strapped district was determining which employees to lay off, based on job duties and seniority.

On June 20, 2009, the budget services division identified more than 900 unfunded positions that accounted for about $30 million of unbudgeted money that had been spent.

[Richard]

RE: Schools, non-teaching employees, teachers, and students - remember that well meaning legislation by state and federal legislatures have had a huge synergistic impact on mandated curriculum, personnel requirements, and teacher:student ratios - most notably under the publicly endorsed, federally mandated, and [mostly] locally funded No Child Left Behind legislation and its spin-offs.

As far as teachers go - at my school - early duty personnel opened the school at 0700 (and there were always kids already there waiting); breakfast was from 0700-0800; mandatory tutoring was scheduled 4 days/week for all teachers (minus coaches who were engaged in athletics before or after school) from 0730-0800 and 1530-1600; first bell was at 0810 with mandatory advisory 0815-0830; 7 class-period day from 0835-1520 and teachers had 5 class periods (many schools mandate 6 class periods), one plan period, 30 minute lunch, one department level plan period for cross-curriclar planning/evaluating/curriculum development and parent conferencing; and extra-curricular sponsorship + grade-level week-long class trips (e.g., all Jrs went to DC for a week). And then there were the evening and week-end functions, athletics, plays, concerts, fairs and art exhibitions, field trips, professional training, etc.

And then there are the increasing operaiting costs (e.g., elec, water, maintenance, IT support, etc), materials costs (books, testing, sports equipment, IT, etc), organizational fees (e.g., honor societies, sports league fees, AP/IB, etc), declining tax revenues...usw...

Combine all that with the seemingly inherent ineptitude of large bureaucratic systems commonly found in urban school districts, state and federal education agencies, government and teacher unions, and...

Personally - I am enjoying having a bit of time to myself for a change - don't miss the bureaucracy...but sure miss the kids and faculty.

It's a bit more complicated than many realize...and so it goes...

Richard's $.02