The Business Model and Today’s Economy – A Warning to Universities and Investors

As spring is upon us, this is the time deans and higher education vice presidents across the land embark on their yearly budget exercise. Given the rosy economic scenario painted by improving wages, job reports and corporate profits, it would not be out-of-place to start dreaming of expanding their own little circles and propose larger budgets and increased hiring for their respective units – what Warren Buffett has dubbed the institutional imperative. My warning: beware!

As an academician, I have often heard high-ranking officials espouse how public universities should be run using a business model. My own university president is a strong proponent of the idea. The problem is that universities are saddled with challenges most companies don’t have to deal with. For example, let us suppose that demand for your company’s product goes down. To keep your company viable and responsible to stockholders you will cut down on production. Fewer sales means less personnel will be needed leading to workforce reductions. Despite lower revenue, the bottom line is kept steady by lowering expenses for materials and personnel.

Let’s look at what happens at a university. Let’s suppose demand for your product, classes, goes down – i.e., fewer students are enrolled. The cost of materials to run a class is minimal as compared to personnel and physical plant costs. You can’t shut down buildings so your only recourse is personnel reductions. Here is a problem corporations don’t have. They never have a case where the few remaining clients demand that the company put out as much product as before the reduction in demand. But if you have a class of 40 reduced to 30 or even 20 students the university cannot cancel it. These students registered for the class well in advance, before the semester even began. Their schedules and even graduation are predicated on it. If the class does not make, students will be in an uproar and in this day and age they have no trouble letting the world know – online. As the news become viral, the university will gain a bad reputation. It will affect future enrollment. Any whisper of lower enrollment sends chills down high administrator’s backs.

Here is another difference between corporations and higher education providers. Corporation hires are more fungible. If you let go someone all you need is several weeks’ notice. Not so for academia. You may let go of staff personnel that way but instructors are on an academic year contract. University administrators may decide not to renew a contract for a non-tenured instructor after the academic year but they cannot terminate during. That means hiring and budget decisions have to be made well in advance.

Back in 2007 I was in the middle of this dilemma. I was the founder and Chair of the Idaho State University Budget Committee. Our mandate, as I saw it, was to keep abreast of economic developments so we could best advise administrators of “hiccups” leading to reductions in state allocations to higher education. Once those came about, we would provide advice on budget allocations to programs and hiring. Academic hires have to be done months ahead of time so timely input meant looking ahead at least six months. It was within that time frame I warned our higher administration of the coming economic slowdown and real estate problems at the epicenter of the Financial Crisis. That message went unheeded at the time so, for the next couple of years, our committee was saddled with helping the administration muddle through ever diminishing budgets.

The unemployment rate at the time of my warning in 2007 was 4.4%, wages increased by 0.3% for the month and 4.4% for the year, and S&P 500 profits were up 16% for the year. GDP growth was pegged at 3%. Sound familiar? There was plenty of reason to be optimistic and yet, the future did not play out that way. The same will happen this year, although the main factors behind the economic stall will be different.

There is a financial storm developing. This time around, the low-pressure front will be due to demographic forces resulting in a decrease in spending from the 46-50 age group, a group dubbed the peak spenders. There will be a prolonged and marked decrease in consumer spending that will lead to a protracted economic downturn starting this year and lasting as long as 2023.

State general accounts will dwindle as sales tax revenues drop and a rise in unemployment leads to lower personal tax revenues. These are the two main pillars filling state coffers. The two others are real estate and corporate taxes. While real estate tax revenue will remain steady, corporate tax revenue will mirror plummeting corporate profits. The bottom line is that state support for public universities will take a cut and once again these institutions will have the difficult task of managing their budgets by reducing personnel. This is, therefore, no time to be dreaming about expanding departments, but instead, a time of planning for retrenchment.

Administrators should shun the temptation to pass down the buck and use university reserves to meet the immediate challenge. Next year will be no better. In fact, this downhill process will continue to get worse, and as I mentioned above, will last until 2023. University officials will be forced to face the music at some point in time so they might as well brainstorm and come up with a 5- or 6-year plan to deal with the malaise.

The warning goes double for those invested in the stock market. The same forces at work within state finances will also hobble our economy and wreak havoc on corporate profits and prices. Stock portfolios will take a substantial hit. My advice is to heed the current stock market warning. We just went through a correction, but these are only birth pangs of the financial storm ahead. The wise will use any uptick as an opportunity to whittle down stock holdings. There will be many who will mock me now, but when the brunt of the tempest comes you will want to be totally out of the stock market.

That Higher Plateau

When nobody listens in a time where temperatures keep rising and tempers flare shows that mankind is no where near capable of healing the wounds inflicted by mortal men. Today, the world is ruled by the unquenchable thirst for power, control, and wealth by those who are blinded by their own greed. When on one listens to reasoning or logic, when no one responds with compassion in times of crisis, and when no one who could make a difference in so many lives through acts of kindness, benevolence and humanity, is the reality of our times.

The constant evolving of technologies that could be used for the betterment of man still is to often delayed, cost prohibitive, hoarded, and otherwise used for the destructive side of man. The greed of some knows no bounds. Through-out history mankind has been both the beneficiaries of innovative technologies and have been casualties of the way man has misused those technologies. Great inventions that have changed the shape of the world and other inventions that have been used not for the greater good of mankind but to inflame the world for selfish gain.

Someone once said that everyone at some point in their life has something so profound to say, write or create that would astound the world. Their ability to convey thoughts and expressions that would elevate all of mankind to a higher plateau are so often not seen, read or heard. Fallen on the deaf ears and blind eyes of those who stand to loose their tight grip on the status-quo is much the reality of today. Too often people are caught in the whirlwind of everyday existence while the power players purposely keep those who shown an authority to improve the status-quo from ever reaching the public. And, the public’s fixation that only people with wealth or in positions of power are the only ones capable of such profound works continues to prevent humanity from reaching that higher plateau.

Sadly, today the world is being denied the instruments in which our lives and livelihoods would be enriched. Purposely denied by a power elite that cares not for the public’s welfare. For years it has been their overwhelming desire to reap more power, control and wealth that has scuttled any attempt by those persons who through their own volition created that something and if given the chance would benefit all of mankind.

Today, so few are listening or seeing the ways in which humanity can rise to that higher plateau. This, when we have a media and too many in government unwilling and incapable of seeing just what certain people are trying to do. And, if only we had access or been able to listen to those individuals who have created the means to enrich our lives our world would be a much better place had we been able to do so.

As it stands today with the world filled with chaos too much of our attention is focused not on those individuals who have that something so important and relevant but on the trivialities of meaningless legislation, aka the boarder wall or some other government policy that supercedes any endeavor that would allow more of the public to be informed that there really is a better way for us all to reach that higher plateau.

Sensitive Information About Essaycapital Review Only the Pros Know Exist

The moment you log on the site, there are quite a lot of characteristics which vary from files to your live box that may steer you get through the process of ordering an essay. As a consequence, in the event you purchase a whole lot more pages, you’re likely to acquire greater special discounts. You can discover optimum values from the rate checklist as demonstrated in a tabular form taking a peek at three factors on our site page.

Naturally, the notion isn’t new. What makes theme copy work is the personal details that might just be written by a particular staff at a particular school during a particular calendar year. To start with, you’re likely to observe why stories are vital to the success of your business.

In different states, it’s actually an attempt to boost the writing skills of the students. https://grademinersreview.com/ There is zero need for you to stress out due to a close deadline or a complicated undertaking. Order a global esl students often require an argumentative paper for.

The ordering process is as simple as it gets, so there isn’t any point in wasting more time. As a consequence, you will get a work of superior quality for sure. It is possible to certainly learn the most appropriate pricing from cost checklist as demonstrated in a table taking a peek at three factors on the site.

Thus, in case you order more article pages, you are going to receive elevated savings. Thus, in case you purchase even more article pages, you’ll undoubtedly get greater discounted rates. Hence, in case you pay for much more written pages, you will certainly secure great cost savings.

The price tags of the provider’s offerings are in reality considerably low in comparison to some other on-line businesses of the specialised niche. It’s possible to be aware of the agreeable pricing from the purchase price section as shown in a table focusing on three major factors on the internet page. It is easy to figure out the ideal prices through the purchase price checklist as provided in a tabular taking into consideration several criteria on the site.

So, in the event you cover for much more paper pages, you will probably get greater price discounts. Therefore, if you purchase more article pages, you’ll receive elevated discount prices. Consequently, in case you acquire extra paper pages, you will get superior discount prices.

What the In-Crowd Won’t Tell You About Essaycapital Review

Right here are the item reviews that will recommend that you decide on writing piece via the net from Essaycapital.com. It’s here that writing service reviews arrive in handy. Essaycapital review 2018 proves it’s a skilled essay writing or extensive dissertations our website and get your fantasy job.

Whispered Essaycapital Review Secrets

The internet page has made the services and products listed in various categories. It has made the products and services listed in a variety of classes. The online page has made the expert services listed in an assortment of areas.

The online page has made the skilled services visual in a lot of classes. The web site has made the new services able to be viewed in a number of categories. The internet site has made the skilled services observable in quite a few categorizations.

If you’ve got a lot of numbers that you wish to look up, it is a terrific idea to opt for the unlimited search program. As there are lots of companies providing writing and editing services nowadays, it’s reasonable to regard different offers too. In addition to that, at any moment you add an original clientele to Essay-capital.

A superb writing service organization is the one that is going to strive to create quality content in any respect times through its talented pool of writers. The prices of their site’s offerings are usually reasonably lower in contrast with various different agencies in the field of expertise. The selling prices of the organization’s products are usually moderately small as compared with the majority of other firms of the identical field of expertise.