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The lunar crater Einstein
At last, an astrophoto, after a nearly 2-month hiatus!
The crater-within-a-crater at the top center is named Einstein.
It's in a libration zone and is not always visible from Earth.
This is actually an infrared image — the air is steadier in infrared
than in visible light, and with this winter's weather, we need all the help
we can get. Best 1500 of about 2200 video frames captured with my Celestron 5.
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A striking case of the fallacy of sunk costs
The fallacy of sunk costs is the mistaken belief that, if you have invested
a lot of effort or money in something, you must stick with it, regardless of its
future prospects.
I heard a striking case of it on a financial call-in radio show recently.
A young couple had gone to college and gotten education degrees — from
some strange kind of college that only qualified them to teach in (some kind of)
Christian private schools,
not public schools.
The schools where they could teach did not pay them very well. They were in deep
financial trouble. What to do?
The host, Dave Ramsey, wisely prodded them to realize that they didn't have to teach
school at all. Presumably, a person with an education degree is intelligent enough to do
a lot of other things, especially jobs that require a good bit of reading and writing, or
involve delivering some kind of training. You don't have to do the exact thing you were
trained for. Do something else if there's more need for it.
I give the same advice to graduate students regularly.
Indeed, I think one thing keeping the unemployment rate high is that too many people have
not yet ceased to be auto workers or construction workers — but we are never going
to need as many of those as we used to.
This also raises another concern: I'm in favor of Christian education, but let's not let
it become a racket. It's one thing to want a good grounding in the faith. It's another thing
entirely to be scared of secular schools because you think you or your children
will be "exposed to" something evil there.
Some parents overspend on Christian private schools that they can't afford;
college students take out unwise
loans to go to Christian colleges; and bad things happen, all because of fear.
Worst of all — as apparently happened to this couple — schools labeled "Christian"
sometimes get away with delivering inferior results.
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What Dave Ramsey doesn't know about higher education
While I'm tackling the Dave Ramsey show, let me supply some information about higher education
that Mr. Ramsey doesn't seem to have come across. That is forgivable, of course, because I'm
a postgraduate-level educator and he's a businessman.
(1) Specialized graduate study is funded through assistantships. Mr. Ramsey quite
properly advises people not to borrow money to get doctorates in things like music history.
That is wise advice. But what seems to have escaped him is that (at least in my part of the world)
that kind of study is supported by assistantships anyway.
An assistantship is a 1/3-time job that covers your fees and living expenses.
I would advise all prospective Ph.D.
students that if you can't get an assistantship or fellowship, you can't get the degree.
Only the rich spend their own money on degrees to prepare them for college teaching or other
low-income fields.
This means, typically, applying to several graduate schools to see where you get the best offer.
It may also affect your choice of
department: if the same research topic can be studied as English or Comparative Literature, you
might see which department has more assistantships. (Typically English because they have to teach
the freshman composition courses — but ask.)
But above all, don't borrow money for a degree that only qualifies you to be a college
teacher, because although you're preparing for a fascinating career, it will
not be a high-paying one.
And this brings up another point...
(2) Don't go to a college you can barely get into. You don't want to be the weakest student there.
If you're a graduate student, you don't want to be the one who doesn't get an assistantship, of course.
And, more importantly, you don't want to risk flunking out. Although I'm not dead-set against student loans,
note that a student loan plus an unfinished degree can be a disaster — all the expense and none of the
remuneration.
I'm on the admissions committee for a graduate degree program
right now. What applicants don't realize is that
we're not vetting them for an exclusive club, we're genuinely trying to figure out
whether they'll pass their courses.
If the committee isn't sure whether to admit you, it's because they're not sure you can
complete the degree. Don't beg them to give you a chance if they're hesitant.
And above all, don't try to trick them — if you convince them you're better than you
really are, you may be heading into disaster.
(3) As Mr. Ramsey points out, where you go to school normally matters only at the Ph.D. level,
and even then, it's not as critical as you think.
Over the years, I've had a good look at great universities, middling ones, and weak ones.
It looks to me as if the best students are about the same everywhere. What is different
is what the weak students are like. The weakest students at Yale are not very different from
the best ones. The weakest students at Podunk State (that's a made-up name) are weak indeed.
But if a Yale-type student goes to Podunk State, he can almost certainly squeeze a nearly-Yale-level
education out of them.
What I really worry about are the people who borrow money to go to what I call boutique colleges,
the private colleges that are not Yale or Harvard or Duke or Emory, but cost as much as if
they were. If you can afford them, they can give you a great experience. But if you can't, please
don't go into debt. It's not worth it.
(4) Everybody needs to apply for financial aid.
I heard Mr. Ramsey say to someone, "You can't get financial aid, you're too well off. Apply for merit
scholarships instead."
That was good advice in 1970, but today, all scholarships are called "financial aid."
If you happen to qualify for a long-forgotten scholarship for red-haired
descendants of Jason Q. Quaggleshire IV, the financial aid
office is who is responsible for handling it.
There's another reason to apply for financial aid. Some private colleges give financial aid to nearly
everybody. That is, nobody poorer than Bill Gates pays list price. If you don't ask, you'll think
you can't afford it. Fill out a FAFSA (financial statement) and send in the application!
One last note. As part of the FAFSA process, you will be awarded federal loans and possibly other loans,
but you don't have to accept them. Simply leave them unchecked when you accept the various parts of your
financial aid at the beginning of every semester. Don't try to avoid being considered for them.
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When is it wrong to borrow money?
While I'm writing about economic topics, here's another one.
A hot issue in financial counseling, especially Christian financial counseling, is whether and when
a person can rightly borrow money.
Obviously, a lot of borrowing is foolish.
But beyond realizing that, advisers disagree and often become muddled.
I want to propose a simple, clear approach to the question.
I do not think borrowing money is inherently wrong (although some people quote half of a
Bible verse, or occasionally half of a different Bible verse, to say that it is).
I think all borrowing needs to pass two tests:
- The moral test: Are you practically certain you can pay the loan back?
- The economic test: Are the added costs of borrowing justified by the benefits of
having the money now rather than later?
Of course, the hard part is working out what these tests imply.
It is wrong to borrow if you don't have a practical certainty of being able to pay the debt.
But what is "practical certainty"? Absolute certainty never exists in this world.
But a vague hope that you will have more money in the future is certainly not enough.
Nor is the expectation — reasonable during the inflation of the 1970s but not today —
that your paycheck will consist of more dollars in the future, even if those dollars are less valuable.
Here morality encounters all the complexity of financial management. Risks can be quantified.
I like to think in terms of the worst reasonably likely scenario.
That is, what is the worst scenario that does not involve rare, freakish, or unforeseeable
developments? (And, for that matter, can you eliminate the rare and freakish risks by
buying insurance? That's what it's for.)
From this perspective, we see that, for instance, borrowing to invest in the stock market is
imprudent. It is certainly not rare or freakish for the market to go down.
Then there's the economic test. The way I see it, there are two costs associated
with every loan. One is the interest that you pay. The other is the loss of flexibility
(and that, I think, is the real point of Proverbs 22:7b).
If you have bills to pay, you are not at liberty to divert money to something else, or divert energy
to something less lucrative than your present job.
That's why I don't approve of the American dream of buying everything with "easy monthly payments."
Again, a good manager will try to quantify both of these costs and will consider all reasonably
likely scenarios.
I don't have time or space to go into more detail, but I hope I've provided a useful framework.
I think this at least gives us a way to pull together and compare
the seemingly disparate advice that a number of
different people are giving.
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