As a current student at George Washington University (a.k.a., most expensive four-year institution in the United States), this is something I heard plenty about and still hear plenty from my friends in high school. I grew up in a fairly affluent area, but I know some students who turned down Ivy League schools last year because they could not afford them. It's a real shame -- they had worked their butts off in high school, achieved so much, gotten into these elite schools, but were then forced to search for alternatives. I don't mean to sound spoiled -- they're happy where they are -- but it was a difficult process for them.

By the way, Marty, the Democrats have been very vocally against the alternative minimum tax, which may affect many more families much worse than the top marginal tax rates.

The most important tale of America over the last 25 years has been her rise in wealth (as well as the growing disparity in wealth).

Prices of items whose supply cannot/does not expand (sports teams, universities, enviable cities) have outpaced inflation.

For example, the number of colleges has actually exploded, but I guess there's only 1 Harvard. Although the number of institutions considered 'elite' has probably grown over the last 25 years, it has not nearly kept pace with rising wealth and demand.

Marty,

There were times yesterday I couldn't connect at all to TNR--"server could not be found."  Morever, I can no longer cannot to TNR using Mac's key browser Firefox.  This is ridiculous.

This is absurd.  Upper middle class families are "pinched" because they buy bigger houses, more expensive cars, take nicer trips, and eat out at more expensive restaurants than people further down the scale. Oh, and they send their children to more expensive colleges. They also save more money for retirement, and retire earlier.

In this regard, things are not different than they used to be, they're exactly the same.

Molly,

Yes, I am having the same problem. In an odd way, I am encouraged that you're experiencing the same problem because rules out my Vast Spine Wing Conspiracy theory...

as for the post, it is encouraging to know that Harvard is willing to use some of that endowment for students. Who knows, perhaps my kids may, with the help of these kinds of efforts, be the first in our family to attend an Ivy.

My sense is that if you're a family living on under 200K, your economic interests are best served by the Democratic Party. If you're one of those top 1%, then it seems that the GOP is your best bet...

While it's true that a large number of "legacy" applicants are turned down by the Ivies, it seems equally obvious that children of potential super-donors, legacy or otherwise, are favored, and the Ivy administrators don't hide this use of the price mechanism to allocate scarce (academic) goods. In fact, this pay-for-play principle has entered into judicial decisions, IIUC, and no one batted an eye.

What Harvard etc don't realize, or maybe do but don't want to face squarely, is that at some point the actual quality of the product has to keep up with the brand's snob appeal and the luxury price. When your luxury Jaguar super-vehicle costs well over 6 figures, it damned well bettter have few defects per 100 and perform like a top-- in any case, be vastly superior to a Honda Accord.

I'm not sure whether this is true of Harvard-Jag vs Berkeley/Michigan-Accord. Larry Summers told the (unwelcome) truth when he admitted that many Harvard College grads, all of whom are graded on the Lake Wobegon curve, are badly educated: can't tell a gene from a chromosome, don't know foreign languages etc.

Cookie, your kids may well get a better education at Berkeley than they could at Harvard, where they'll likely never or only rarely get quality time with a prof in their first two years. I

f Harvard were a traded stock, I'd short it. I'd be going long in the public university stars like UCSD, Chapel Hill, U-Texas etc

twalker: It's not such an easy explanation as that.  True, they're pinched because they choose to live in expensive homes.  But there may not be an alternative.  The high paying jobs all require you to live in high rent areas.

I work on Wall Street and I pay $2300/month in rent.  True, I could live in a shithole in Washington Heights for probably $600 but the impact it would have on my commute (not to mention my psyche or physical well-being) would not be good.  So you can say, I choose to live in Manhattan and am being pinched for my choices.

The other thing that other people fail to recognize is that while the upper middle class make more, their stress level (not to mention their output value) is higher than that of someone working in a grocery store.  They need the trips to relax and an occasional dinner at a restaurant.

Of course, the exception are the couple bunches of rats working at my firm who do nothing, produce no income for the company, show up to work 30% of the time and make $400K/year.  Eventually, however, it catches up to them and they get tossed out on the street.

The upper middle class need the trips to relax! As well as the occasional dinner at a restaurant, just to relax! Unlike the stress-free grocery store employee! Apartments in New York City cost either $2300/month or $600! Commuting is hard on your psyche!

If  Being Rich Ain't What it Used to Be you should try poverty sometime. It is the same as it always was. My brother in law and sister live in DC metro area, earn that kind of income and have two kids in college, one of whom they sent to Fork Union military academy for high school. They do more than fine, with a nice house in a great neighborhood. I think they can do fine with a slightly higher marginal rate. If you earn close to 200k and don't have any catastrophic illness or have 10 children and claim you feel pinched, then frankly you are an idiot who needs to rein in your spending.

jwl, wow. really. wow. I weep for you. God forbid you live with the animals in Washington Heights, or worse go to a place called New Jersey. They do have a thing called trains, and it will take you straight to Penn Station, but since it is New Jersey with Places like Palisades Park or Hoboken with their rents at half that rate is far too downscale for working class heroes such as yourself so I understand you can not imagine moving there, so you have to trudge through living in Manhattan. Truly I weep for you.

Yeah, f**k that grocery store clerk, what stress could she possibly have?

Blackton stole my thunder.

"Being Rich Ain't What it Used to Be."  MP

No, but being poor is as bad as ever.  I am talking about the kind of poverty where you go without secure shelter, your own clothing, and where you have to choose between medicine and victuals.

"The other thing that other people fail to recognize is that while the upper middle class make more, their stress level (not to mention their output value) is higher than that of someone working in a grocery store.  They need the trips to relax and an occasional dinner at a restaurant."

Sorry, jwl, I can't feel sorry for you. Poor people have more stresses than the middle class well off. They are as a consequence more susceptible to many life shortening illnesses, like hear disease and diabetes.

thejauntyboulevardier  

No one's interests are best served by the Democratic party unless you're in one of those special interest groups that they cater to: a) welfare recipients who can but don't want to work b) union leaders and members c) grievance mongers d) trial lawyers e)al-qaeda.

Face it, even the few accomplishments that are credited to the Democratic party 1) Race 2) Social Security are an illusion.  Lincoln was a Republican.  Social Security fails because it forces the current generation to support the elder generation as opposed to creating pools of cash that are invested and then distributed to those who actually put the money in.  Each year, people should be contributing to an annual fund ("2008 fund") that is then used to pay future benefits of ONLY those people who worked in 2008 and in a ratio to their contribution.

No one's asking for any of you to cry for me Argentina.  At the same time, you ain't doing my job and paying my bills so you have no right to begrudge me my income or that of any other person in that income level.  The truth is, if you can handle that job, why don't you??? What we're doing is not rocket-science.  But at the same time, not everyone can do it.

Marty's right.  $180k isn't what it used to be after paying tax, rent, 2 kids, a wife.  How much of disposable income is that afterwards? None? I'm not saying that people in this strata are starving.  Far from it.  But it also doesn't go as far as you might think, and that's what Marty's main statement is.

(Do you know how much a Subway footlong sub costs in Manhattan? $8.00.  We're not in Kansas anymore Dorothy. )

Jacksondyer:

Don't think  I don't know it.  I'm extremely fortunate and thank God for my station every day and at every opportunity.  I just think that it's never a good idea to pass judgment on anyone else's lot.  We all have our difficulties.  The richest man may be afflicted with some sort of genetic disease for which he'd trade his entire fortune to cure.  The poorest peasant may have a loving family and kids and feel richer than the wealthiest man.  

I sense a great deal of resentment on this discussion towards those who are in Marty's stated range.

I think it's a huge error to covet.

As for the grocery clerk, did she go through a full 22 years of education, dutifully taking notes and doing well, knowing full well that education is a catalyst for doing well later on?  To put it in an analogy: I understand that my paying $1 (educational effort) to get $100 (reward) is a better deal than hers which was probably paying $0.50 to get $30.  But everyone should know this by now.  Hey, even heaven is probably not socialist.  I mean, if I ever get there, I'm sure that Mary would be held in much higher esteem than me, as well she should.

It's true that some areas in the country cost a great deal to live in, compared to others.  But $150K + is a lost of money in most of the country.  If you are on that kind of salary track, and haven't saved enough, or can't cut expenses enough, to afford a good college, you've spent too much somewhere.

Where?  Not sure.  But I've put 100K miles on a 13 year old Honda Civic that I paid for $6000 for  5 years ago when I bought it used, with minimal repair expenses along the way.  The person who parks next me to in almost any suburban lot is highly likely to be parking a $30,000+ SUV that he or she bought new.  I live in (and raised a family) in a 1000 sq ft house that is 70 years old; the average middle class dwelling is at least twice that size, and new.   I don't buy stuff I can't use, and when I do, I buy stuff that lasts.  This is easy, because I go into a mall maybe once a year.  I buy all my clothes on off-season sales.

The result.  I can save 20% of my salary yearly, and will have paid next to full tuition for my two kids and wife to get degrees at an Ivy, a top-tier little Ivy and a top-ranked 4-year liberal arts institution by the time the last one finishes in two years (2 are done).

And while my salary is very good, it's never been close to $200K/yr.

I figure that for the most part, people pay for the things they value.

Genetic disease? Poorest peasant? $8 subs? The imaginary grocery store employee is named Mary? This is great stuff, jwl - keep it coming!

How do the 97% of American households that make less than $180,000 even get by? Good thing they don't need those fancy vacations and restaurant meals to help them de-stress.

sdemuth - where do you live, if I may ask?

"Face it, even the few accomplishments that are credited to the Democratic party 1) Race 2) Social Security are an illusion."

An illusion to 50% of the elderly who don't have to live in poverty?

Civil Rights? An illusion to those black people who can now share a fountain and attend law school (or business school)?

Mighty powerful illusions those.

By the way, I also went through all that schooling, (and have a very nice job, thank you very much), it was no big deal. Maybe our grocery clerk didn't have that opportunity? That ever dawn on you?

Although I don't doubt for a second that I could do your job, I probably wouldn't want it, would probably bore me.

"Don't think  I don't know it.  I'm extremely fortunate and thank God for my station every day and at every opportunity.  I just think that it's never a good idea to pass judgment on anyone else's lot."

I didn't pass judgment on your lot,  but It is you,who made us all aware of your economic success which I celebrate. May you become a second Soros, minus his politics, of course.

Still, it is ludicrous to compare you lot to that of some man or woman who lives from paycheck to paycheck without any financial security.

Viva Al Queda!

tep -

Caught red-handed.  I live in Iowa - so I have certainly spent a good deal less on housing than if I lived in a major economic center.

I don't claim by the way that I haven't been lucky.  I have been very lucky - I was born smart to parents who taught the value of education, and have been the beneficiary of quite a few breaks where my mistakes did not derail me as they certainly could have.  Nor do aver that any of this is necessarily easy.  Just that spending choices  do reveal what you value most, and for a lot of people, that puts cars and houses and clothes and restaurant dining ahead of education for their kids.

And, to state the obvious, I'm talking about the solidly middle class here.  If you're trying to raise a family on $30-$50,000 a year ANYWHERE, you're going to need some serious help with the education expenses.

"As for the grocery clerk, did she go through a full 22 years of education, dutifully taking notes and doing well, knowing full well that education is a catalyst for doing well later on? "

Now to the meat and potatoes of your post, jwl.

I don’t care if a grocery clerk had the no schooling or the same amount of schooling. It might be that they are not mentally equipped to go through the higher education system (even the dumbed-down version). Still no working person deserves to live in poverty, jwl.

mmathog said:  "Viva Al Queda!"

You are ass, mathog.

mmathog said:  "Viva Al Queda!"

You are an ass, mathog!

C'mon Jackson, that dude jwl said the Democratic Party 'serves the interests of Al Queda,' and I'm an ass?

I just realized something, we're getting moral hazard lectures from a dude working on Wall St.

'Hey Bernanke, we made a whole buncha bad investments, where's the helicopter?! We need cash!'

JWL- Historical evidence has shown greater GDP growth and stock market returns when the President is a Democrat; thus, you may want to reconsider your political preferences.

I've been rich for years, but can't get rich.  Taxes, are one reason.  

Then there is the double taxation of Los Angeles public schools, which are for the most part unusable.  Which means you have to send your children to increasingly expensive private schools.  The tuition for which is not deductible.

then there is the very large cost of insurance--life, health, home, car.  All of which are necessary to protect what you've earned, none of which are deductible.

And finally, there is simply the very high cost of living in the coastal urban areas of the U.S.  Incomes that sound large (even to me) aren't really anymore if you're raising a typical family of four.  

I'm not asking for anyone's sympathy.  That I don't deserve.  But, appearances to the contrary, I ain't rich.  

If Harvard and other private colleges are too expensive for the middle-class (broadly-defined), then the sensible alternative is to send kids to public universities. A private under-graduate education is little better than that found at good public colleges. And it's hard to see the payoff from private schools in the job market, whether for accountants, engineers, or bare-foot philosophers. Unfortunately, the striving American middle class, especially on the East Coast, has been sold on spurious out-moded values having mostly to do with snobbery. Self-respect and success in life comes from competence in one's chosen fields, not from an Ivy diploma or the opinions of other snobby people.

hey Channy, are you healthy, is your family healthy, do you have health insurance and a job that meets your bills plus a little extra for retirement and enjoyment? If yes, you are rich. Or do you measure you wealth by square footage and name brands? if you do, you will never be rich enough. so appearances to the contrary, you are indeed rich.

blackie, the only people are wealthy are those who work for a hobby or personal expression.

If a disability would lead to your eventual ruin, you are not wealthy.  If disability would mean that your children would be deprived of a decent education, you are not wealthy.

You may be living well on your income, you may have nice toys.  But, you ain't wealthy

amidut, if the object of a college education is to get an education, you are absolutely correct.  Most undergraduates, even very talented ones, can get an excellent education at a public university.

But, an Ivy League education is about whom you meet there for your future network.  And the nearly guaranteed employment and prosperity that a Harvard or Yale degree bestows.

It is for the connections that parents are willing to pay the Harvard piper.  It's decent of Harvrd, with it's immense endowment, to now consider helping out the upper middle classes.  Which in many cases are spending their retirement security to send their kids to the Ivy Leagues.