When I attended college, I worked hard in the classroom and held several jobs to support myself. Blessed as I was to have parents who willingly gave me the chance to attend the university of my choosing as long as I worked hard and got the grades, I wanted to do everything I could to pay for my non-school living expenses. As I now watch my children go through college, I marvel at how times have changed and costs have shifted around. I spent most of my non-school/room-and-board money on long distance phone bills to friends and long-distance relationships. I could easily rack up a $100 to $200 bill in a month. I spent a ton of time in the computer lab working on projects and papers, which I could have done in my dorm room if I had the $2,500 to $4,000 to buy a personal computer to perform basic word processing and spreadsheet functions (with a $400 program) as well as manage some basic encyclopedia functions from a $300 encyclopedia program. Not long after, when I started my first job, I had to buy a camera for about $100, and then film for it at about $0.10 an exposure, then an additional $0.15 to $0.20 per exposure to process the prints - all without a guarantee of success. For a cool $400, I could get a new portable CD player and then each CD for about $1 per song (except for the time I joined the CD of the month club...which as it turns out, was not so much of a deal, but at the time I thought it was amazing!). Totaling that all up, I would spend anywhere from about $4,000 to $5,000 up front and $200 to $300 a month...
....for what I can now get through my smartphone for $900 up front and about $50 a month.
Even without adjusting for inflation (that $4,000 would be $7,500 today and the $200 a month more like $370 in today's dollars), I get all the same value and service - and then some - for far less. And the kicker....someone makes a boatload of money doing it. In fact, the company that does it has one of the largest piles of cash reserves of any company in the world. So someone lowered my costs, added more value, and created a profit for themselves. This exemplifies capitalism delivering value to consumers, and as time goes on, the people possessing these technologies will have less and less risk associated with their decline in value. Switching to a new version, or improved service, will cost less and open markets to more and more people. We have started to see this trend seep into parts of the economy like transportation (with ride-share services and driverless electric vehicles) that could drive the per-mile cost of personal transportation down to levels once thought unreachable.
Contrast that with a different side of the economy: real estate. In 1990, you could buy a nice home in a neighborhood with good schools for around $100,000. Nowadays, that climbs well over $150,000, and for some of the best school districts, upwards of $500,000. Making money in real estate requires high demand, low supply and ultimately, convincing someone that what they buy will get more valuable over time. Ultimately, however, someone will get left holding something that has less value than the day they bought it.
This is the "hot potato" economy.
We see this in the purchase of stocks as well, and although the players have joined that market knowing the risks with a willingness to "play the game", the results impact the lives of pensioners and 401k holders whose end-of-life quality depends on not holding a worthless portfolio when the time comes to cash out. Similarly, we see this same type of economy affecting education. The cost of a quality education that will provide opportunities for our children to provide for their future has risen dramatically in the past four decades, and yet, the value of that education has not kept up, leaving a whole generation holding the bag. When we figure out how to fix it, and ultimately settle on a more European style "free education for all" model, those who finish right before that time will be caught holding the "hot potato", and will pay for it for no reason other than bad luck of the timing of their birth.
If we want to fight for an economy that delivers justly to all consumers, we need to focus our efforts on rooting out these "hot potato"-based parts of the system and end the speculative practices that sort winners from losers in areas associated with basic needs. We cannot allow luck, timing, savvy, or - at the most extreme - ruthlessness determine the financial fortunes of people when it comes to shelter, education, or health. We have already figured this out when it comes to food, access to information, entertainment, and transportation, and we know what the result looks like. If we do not solve it, we will find ourselves dealing with "bubbles" over and over again: tech bubbles, housing bubbles, carbon bubbles, etc. that ruin the financial health and ultimately the physical health of whole segments of the population. To end this, we need to start with a promise to stop thinking of life as something on which to speculate, stop treating our fellow people across the globe as marks on which to prey for financial gain, and stop rewarding those who find the greater fool...
to leave stuck with the hot potato.
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